Upselling, Downselling and Cross-Selling — WTF?

If you’re not super interested in marketing or you’re just getting started, you may not have heard the terms “upsell,” “downsell” or “cross-sell” yet. You may be wondering what on earth these words mean and why you should care.

One word: profit.

When done correctly, implementing upsells, cross-sells and downsells into your checkout process can triple your profits. I’ll bet your attention is peaked now.

What IS a Cross-Sell?

cross-sell is when a customer comes to you to buy one of your products and you sell them additional products related to that initial product. For example, the customer wants to buy a phone and you sell them insurance, headphones and a phone case in addition to the phone.

What About an Upsell?

An upsell is when a customer comes to you to buy one of your products and you sell them a higher-end, more expensive version of that initial product. For example, someone comes to you to buy a Prius and they walk away with a Lamborghini (do you need a job? I think we can work something out with those skills, ha!).

And a Downsell? What the Hell is That?

And finally, a downsell is when a customer ends up NOT purchasing your product, so you offer them a similar product at a lower price. For example, you tried to sell someone a top-of-the-line oven and after they shoot you down, you offer them a toaster instead.

The purpose of a downsell is to get one last shot at getting the customer to spend ANY money with you. A dollar is still better than nothing.

Quick Correction of Popular Terms

There are a few terms that are very, very popularly misused. I’d like to make you aware of it now to save you from some possible confusion later down the road.

In the world of online marketing and ecommerce, people often say “upsell” when they really mean “cross-sell.”

Why Does That Matter? What’s the Difference?

Here’s the difference: when you’re selling someone some headphones to go with their brand-new phone, that’s a cross-sell. When that same customer is eyeballing a cheap phone and you talk them into buying the most expensive phone in the store, that’s a (very successful) upsell.

The headphones are a nice add-on, but they are not the same type of product at a higher price, they’re a different type of product completely.

When you go to your cellphone carrier’s store and they throw in a tablet for a good deal when you purchase a phone, that’s a cross-sell, even though some people will refer to that as an “upsell.”

One more example: you’re trying to buy a car. You walk in wanting a 2004 Dodge Charger. You walk out with a 2010 Dodge Charger (upsell) and a bunch of car air fresheners (cross-sell).

One more, just to be very sure you understand the difference: you’re trying to buy real estate. You tell the real estate agent that you want a two-bedroom condo. You end up buying a three-bedroom house (upsell) and ten pounds of sand to cover your backyard in because you actually wanted a beach house (cross-sell).

What About Upsell Funnels and Marketing/Sales Funnels?

Another incredibly popular confusion between terms amongst the Internet crowd: upsell funnels and marketing/sales funnels.

A sales funnel/marketing funnel/conversion funnel is the entire process of taking a prospective buyer from the very first time they hear about you or your brand all the way through them making repeat purchases from you.

An upsell funnel is the process in which you would “funnel” the buyers through a series of upsells, downsells and cross-sells while they’re checking out to attempt to get them to purchase more products.

These terms are frequently confused and you’ll often hear people talk about a sales funnel when they’re really talking about an upsell funnel, which can get incredibly confusing, but now you know.

Think of the two this way…

A “sales funnel” is funneling the buyer through the sales process, from falling in love at first sight all the up through them basically single-handedly supporting you from all the purchases they make.

An “upsell funnel” is funneling the buyer through a series of upsells, downsells or cross-sells while they’re checking out.

Explained a different way, a sales funnel is the entire process of first interacting with a person all the way through them buying your products and then continually nurturing them to keep buying your products.

Upsell Funnel

An upsell funnel is when you go to make a purchase, such as on Amazon, and as you’re checking out, they offer you suggestions of other things to add to your order.

Upsell funnels include upsells, downsells and cross-sells. It’s the entire “funnel” the customer goes through at checkout when they’re presented with an upsell offer, maybe a downsell offer, some cross-sells, etc. All of those together make up one upsell funnel. The upsell funnel is simply used during their purchase to convince them to spend more money.

Sales Funnel

The sales funnel is the entire customer experience. It’s basically a sales person’s entire job description. It’s the “funnel” the customer goes through from the moment they hear about you through getting them to know, like, and trust you, to having them actually buy something from you, to nurturing them into continuing to buy things from you.

That entire user experience/process from the point of first contact through repeat buying is the sales funnel.

Can I Have a Real World Example, Please?

As an example, let’s say you really want to buy a new phone. Super bad. So the sales funnel is when you enter the door to their store, the reps greet you, you go through the questions and decision process, and finally you buy the phone. That entire experience was you moving through a sales funnel (aka the “marketing funnel/conversion funnel/buying process”).

Now, when you go to pay for your phone and they offer you a last chance to buy a better phone, or they sell you headphones, a phone case, etc. The experience of having them offer you all of these extra things to buy is you moving through an upsell funnel.

See? Easy. MOVING ON…

Cool, Why Do I Care?

Why should you care about these processes and terms? Because you can make a lot of extra money by implementing these concepts into your business, that’s why.

Imagine if cell phone companies didn’t offer you a bunch of add-ons and extra goodies to protect and accessorize your new phone after you make a purchase? They would miss out on SO MUCH additional revenue, it would be insane. And chances are, you may be missing out on a nice chunk, too.

Sounds intriguing, right? So how can you get in on the action and set up your own upsells, downsells and cross-sells in your business? Stay tuned for our next article… dun dun duuunnn…