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The main differences between cross-selling and upselling

20 Jan, 2022

It might be more expensive to acquire new customers than to retain already existing ones. What is more? A loyal client will buy from you more frequently than a new prospect. This is especially so in the hotel industry. People tend to stick to hotels and hotel managers they trust and whom they’ve had satisfactory experiences in the past. Therefore, cross-selling and upselling to your existing clients is a strategy that cannot be ignored as it creates excellent opportunities to enhance your profits.

Upselling and cross-selling are absolute winners when it gets to boosting sales for any hotel. By practicing the strategies correctly, you end up with loyal customers and an improved bottom line. Nonetheless, it would be best to act wisely to avoid ending up with clients who are blind to your promotions. Keep reading to find out more about these sales techniques and how they can benefit your hotel business.

What is Upselling ?

Upselling can be seen as a sales technique where customers are encouraged to purchase any item that works towards making their initial buy even better. It is similar to upgrading an existing purchase. Usually, marketers use this strategy during their campaigns to boost their sales.

Additionally, upselling offers your customers value since by paying a little extra, they get a better quality product, making the technique mutually beneficial.

You have probably come across upselling numerous times, maybe even without realising it. For example, as you purchase a big latte from a barista, you might have spent more on vanilla syrup and chocolate crisps. Consequently, you receive better coffee, and the daily receipts of the barista also improve. 

Upselling presents hoteliers and hotel managers a myriad of opportunities to push more products and services to their clients. It also offers a chance to make more profits while providing their customers with a more fulfilling experience. 

For instance, by offering rooms with better views, faster Wi-Fi, and a wider array of cuisine choices on the menu, you can charge your clients more while giving them memorable indulgences.  

One of the significant benefits that upselling offers are that you give customers a chance to choose superior services or products. Multiple studies such as this PWC report have shown that customers are willing to pay higher for better experiences. 

Therefore, upselling can correspondingly act as a marketing tool that puts your hotel ahead of competitors and gives it a competitive edge. This will also earn you a more loyal following, thus increasing customer retention. 

It is evident that upselling can be practical as well as advantageous for both the customers and hoteliers. Hotels get to enhance their average order value (AOV), as the customers end up with high-end services and products.

What is a Cross-Sell Campaign ?

Cross-selling is an excellent means of encouraging people to purchase more. Here is how this approach works:

You show a client an array of items that can complement what they need. For example, a customer wants to buy a pillow. Products related to the pillow are pillowcases and sheets. Usually, marketers will suggest the products a client is probably also looking to buy, just at the right place and time. 

Cross-selling is applied every time in e-commerce, and you get to see complementary products on product pages, in your shopping cart, or as you checkout. In addition, you might sometimes receive emails with a list of extra products likely to suit you. 

So how can this strategy work with hotels? Take this example: there’s a customer looking for a hotel to spend a couple of vacation days. When implementing the cross-selling technique, this begs the question; what else could the customer be looking for? Perhaps they want more than a hotel and could use an experience such as a taste of the local cultural cuisines. 

By organising such events at your hotel, you can use cross-selling to showcase these related products to the client. This prompts them to consider these new products and add them to their package. 

Both the techniques considerably generate repeated purchases, maintain current customers, and boost revenues.

Cross-Selling Strategies

Cross-selling and upselling tactics are pretty similar. Both strategies increase the seller’s profits through different means. Upselling enhances the revenue by promising a better-level product. Cross-selling, on the other hand, will grow your revenue by suggesting additional products for the client to buy. 

The techniques differ in their customer’s intentions. For example, when a buyer is cross-sold extra products, they do not have any prior intentions of getting the product. Following the suggestion, the client might consider including the products as they fit the original order. 

The appeal of upselling is on a customer’s desire to purchase an item. Merchants propose that they consider better quality products.


Benefits of Cross-Selling and Upselling

The primary purpose of cross-selling and upselling is to boost the hotel’s revenue. However, it is not all about profits, as it also includes offering real value to customers and giving them a reason to stay loyal. 

Below we highlight how else these tactics can be beneficial to your hotel and its brand: 

  • Adding a personal touch
  • Optimising sales value
  • Building trust between clients and your hotel
  • Enhancing the lifetime value of a customer

What is Direct Selling?

Direct selling involves the selling of merchandise to consumers directly in a non-retail setup. Sales instead are conducted at home, from the office, or online without a physical store location.


20 Jan, 2022