Cross-selling and up-selling are very similar in different ways. Most important, both strategies offer the clients extra options for their booking and are important for a functioning customer relationship. Tour operators must truly understand their customers, to place the right advertisement ads on websites or send informative emails. Offers made to the customers mainly depend on the customers’ interests, needs and wants. Amazon, for example, sells 35% of their revenue from cross-selling. (Carlson, 2013)
According to Ed Peelen (2013) “cross-selling is the sale of products to current customers who are already purchasing one or more products from the supplying company.” It is specified to current customers as data has already been collected on those clients and the company can target them better. If new clients are targeted the advertisement ads are usually based upon the buying behavior of existing customers and gives a wide variety of products. Those cross-selling ads on websites are usually very visible to the client and is found after a booking. To increase the interest of the clients, the online tour operator connects the ads with the previous booking searches. (Kenny, 2016) This way the customer has the feeling to be taken care of and being remembered by the company from a previous booking.
Up-selling, on the other hand, is a kind of upgrade to the client. With an example of the online tour operator “booking.com” it can be shown that up-selling is also done less obvious to the clients: By comparing different options on the same page with various information, the client starts to compare the initial desire with better options and might upgrade themselves. Next to the different hotels, rooms and other options are shown to choose from as well. With up-sales customers often gain the feeling that they win something, which makes them longer lasting for the company and forms a bond. Accordingly, “upselling isn’t just a sales tactic; it’s a customer happiness tactic” and plays an important role in the customer lifetime value, if the up-selling is done right. (Markidan, 2014)
Cross-selling and up-selling focus mainly on existing customers, as it can cost four times as much to sell to a new customer as it does to sell to an existing one. By cross-selling and up-selling to clients already on the client roster, companies can sell more products and services, reduce the cost of sales, enhance customer loyalty and drive revenue. (Kenny, 2016) But cross-selling and up-selling are not only good for the tour operators but also for the clients, as it is made sure of, that the customer picks the right product for them and that they have everything to use that product. (Lazazzera, 2015)
In conclusion it can be said, that customers are willing to spend more money if they have the feeling of getting value for their money (Huddleston, 2016) and that it is very important to provide the clients with maximum value for full satisfaction. Accordingly, cross-selling and up-selling are very important to keep and engage existing and new clients and to advise them, even if it’s not personal.
Carlson, K. (2013, October 14). Cross-sell & up-sell: If you like this blog post, you may also like… Retrieved October 01, 2016, from The Future of Customer Engagement and Commerce: http://www.the-future-of-commerce.com/2013/10/14/ecommerce-cross-sell-up-sell/
Huddleston, J. (2016, June 22). Customer Expansion Revenue Strategies: Expert Cross-sell and Upsell Tips. Retrieved October 01, 2016, from Service Source: http://www.servicesource.com/blog/customer-expansion-revenue-strategies-expert-cross-sell-and-upsell-tips
Kenny, E. (2016, February 9). How to master up-selling and cross-selling in Travel. Retrieved September 30, 2016, from Boxever: http://www.boxever.com/how-to-master-up-selling-and-cross-selling-in-travel
Lazazzera, R. (2015, March 05). Would You Like Fries With That? How to Increase Revenue, Improve the Customer Experience with Upselling. Retrieved October 01, 2016, from Shopify: https://www.shopify.com/blog/17579484-how-to-increase-revenue-and-improve-the-customer-experience-with-upselling-and-cross-selling
Markidan, L. (2014, October 7). How to Use Upselling to Increase Customer Happiness, Retention and Revenue. Retrieved September 30, 2016, from Groove: https://www.groovehq.com/support/upsells
Peelen, E., & Beltman, R. (2013). Customer Relationship Management (Vol. 2). Boston: Pearson Education Limited. Retrieved September 30, 2016
The Editors. (2016, January 01). How to Cross Sell and Up Sell. Retrieved October 01, 2016, from dun&bradstreet: http://www.dnb.com/perspectives/marketing-sales/how-to-cross-sell-up-sell.html