Up-selling & Cross-selling: How to Increase Average Dollar Sale

Up-selling and cross-selling allow you to generate extra sales revenue by encouraging your existing customer base to purchase more or to make more frequent purchases.

Up-selling and cross-selling are two techniques that you can easily implement into your small business that, if used effectively, will increase average dollar sale and make a big difference to your bottom line.

Whilst the terms are often used synonymously, there are differences between the two in practice.

Up-Selling to Increase Average Dollar Sale

Up-selling is when your salesperson is concerned with selling your customer a higher-end version of the product or service than the consumer originally intended to buy.

An example of up-selling is, from the fast food industry looks something like:

'Would you like to super-size your order?'.

The customer pays a little more, and gets a greater quantity or a better version of the product. Another example is when you're looking to purchase a television and the salesperson encourages you to buy a more expensive model with extra features. If you want to learn new techniques on how to up-sell, read our 5 Sales Up-selling Techniques article.

Cross-Selling to Increase Average Dollar Sale

Cross selling is when you have more than one product that would be beneficial for your customer.

As an example of cross-selling, again a fast food industry favourite...

'Would you like fries with that?'.

The customer buys a product and then adds another product that compliments the first.

Another example is like buying a printer and then the salesperson suggests you buy ink and paper to use with the printer.

The two approaches are similar in so much as they both offer the customer better value.

Usually up-selling provides higher quality while cross-selling provides additional quality and value.

Up-selling builds value into the product or service and cross-selling offers extra items in which you might already have a genuine interest or need.

How to Up Sell

When you're up-selling, you want to have the same product or service with a variety of different options and/or quality.

If selling televisions, for example, you may sell small inexpensive TVs with a few basic features, right the way through to home theatre TVs with the latest technological features. The key is to have multiple versions of essentially the same product or service, or at least similar comparable products or services that fit different price points.

Getting Ready to Cross-Sell

To be ready to cross-sell, you need to have a range of products or services that compliment each other.

For example when you walk into a computer store, they'll often also sell you peripherals - cables, headphones, keyboards, plug adapters, screen protects, covers, bags and a whole list of other things.

Usually when you cross-sell, the additional items you have on offer are cheaper than the main product the customer is buying. (But often, they are also carry a higher profit margin.)

Increase Your Average Dollar Sale

The benefit of up-selling or cross-selling in your sales process is that you're creating an opportunity to increase your average dollar sale. That often means being able to increase the amount each customer spends with you in a single transaction.

This leads to an increase in revenue without having to increase your cost of sale.

It also means you're ultimately creating bigger profits in your business and in the case of cross-selling; a higher volume of products out the door.

You might be mistaken for thinking that you need a some elaborate strategy for increasing your average dollar sale with new marketing efforts and lots of process re-engineering.

In reality you can make up-selling and cross-selling a part of your sales process as easily as they do it in the fast food industry - just get your salespeople to ask if your customers want that extra something that's going to make their life easier and more enjoyable.

With your team armed with the right questions and a list of optional products or services for them to add into the sale, you could literally increase your average dollar sale overnight.

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How could you introduce Up-selling and Cross-selling and increase average dollar sale in your business?

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What's Next?

You've learnt how to Up-sell and Cross-sell. Are you already measuring your sales funnel success? If you want to grow you must learn to measure your success and improve. Here are key metrics, a simple useable formula and an online sales funnel calculator!