Up-sell, Down-sell and Cross-sell: Do You Know What They Mean?

This article is guest posted by Daniel Scocco.

Many marketers swear that real profits are not in the first sale, but rather in the up-sell, cross-sell or down-sell. In fact these techniques are as old as marketing itself, and most mainstream businesses employ them in one way or another. But do you know what each of these terms mean? No? Well, don’t worry. We’ll explain everything below.

First of all you need to understand that these techniques take place after the customer is sold. That is, the customer must already have explicitly agreed to buy your product or service before you up-sell, cross-sell or down-sell. Now let’s talk about each of them individually.

1. Up-sell

Also called up-selling, this technique involves selling a more expensive product to the customer (instead of the one he wanted to purchase), or selling a complement to the product the customer has chosen, increasing the overall profit margin of the sale.

Example: Have you ever been to McDonald’s and ordered a 300ml Coke, only to hear that for 30 cents more you could get a 500ml Coke instead? That is up-selling. What about when you order a cheeseburger and they ask if you want some fries along with it? Up-selling too.

2. Cross-sell

Also called cross-selling, this technique involves selling new products or services to the customer that are not related to the first one the purchased from one. Usually this technique is employed to increase the profits, but it can also be used to solidity the relationship with the client.

Example: Suppose you sell web design services. Many clients will not know how to promote or search engine optimize their websites, so you could cross-sell these consulting services (either by providing them yourself, or by creating a partnership with a company that will provide them for you).

3. Down-sell

Also called down-selling, this technique is used when the customer, for some reason, decides to back down from the purchase. In this case you can offer him a cheaper product, which has higher chances of being accepted. The goal here is to acquire a customer, even if you will not profit as much as possible right away.

Example: Car dealers down-sell all the time. If you enter a dealership looking for a BMW and get scared with the price, the salesman will certainly bring up many other options that cost a lot less. That is down-selling.

If you are not up-selling, cross-selling or down-selling, you are probably leaving money on the table, so it might be the time to review your marketing strategy!

Daniel started working on the Internet back in 2005. His latest project, HowToMakeAWebsite.net, is a step-by-step tutorial for those who want to make their first websites.