How to Upsell and Cross Sell In eCommerce
All of us in eCommerce are looking for ways to boost our sales without increasing our costs. One of the easiest ways to do this is by implementing upselling and cross selling.
The basis for the success of these techniques is that you’re dealing with a customer that’s already in the process of buying rather than trying to entice a purchase in the first place.
So, what’s the difference between upselling and cross selling in eCommerce and how can you make it work for your website? Below, you’ll find out.
Introduction: What Are Upsells and Cross Sells?
eCommerce is an extension of brick and mortar retailing – with many more possibilities.
But it helps to look at the techniques of upselling and cross-selling that occur in brick and mortar environments, which can be used to radically boost sales online as well.
Probably the most iconic example of the brick and mortar upsells happens in fast food restaurants thousands of times a day.
Rather than simply selling the burger, fries, and drink the customer requested, they are always offered a larger size for a nominal fee.
For a fraction of the price of the original order, the customer is given more food and a better deal.
Note that the customer was already standing in line and ready to make their purchase. All it took was a simple suggestion to boost the quantity of food sold and the amount of money going into the cash register.
It’s also important to note that the suggestion was completely in line with the customer’s expectations but provided them with better value.
Rather than feeling exploited, the customer feels that you’ve added value and helped them make a better decision. Win, win, right?
Here is an example of an upsell from Elegant Themes where they showcase the more expensive plan as the best option and detail the financial benefits that users will gain from choosing the higher priced but one-time payment with lifetime support.
Continuing with the fast food restaurant example, a cross sell occurs when the customer is made aware of something different from their original order, but which they might be interested in, nonetheless.
A popular example of cross-selling in the fast-food industry is when a customer orders a hamburger and is automatically asked if they would like fries to go along with it.
As opposed to upselling where they would be asked if they’d like a bigger or better burger, they’re offered something different that’s meant to complement the original order. Again, as with upselling, the customer is already predisposed to making a purchase, but they’ve been prompted to ask themselves if adding to that purchase would be of benefit.
When cross-selling it’s still important to ensure that the customer isn’t jarred out of their expectations of the original transaction.
Offering them something completely unrelated, such as a power tool or a bar of soap – as extreme examples – will make the customer question the intuition and motives of the seller and could scare off further purchases.
In the example below, after a user selects a laptop to purchase with Best Buy, there are shown popular Microsoft software and options for additional warranty coverage to add to their purchase.
Why Use Upsells and Cross Sells For eCommerce?
The main reason for using upsells and cross sells for eCommerce is that they benefit both parties involved in the transaction.
The primary benefit to the seller is that revenue is increased. The average order value (AOV) grows with very little effort involved. Rather than closing a transaction at the earliest instance possible, a slight tweak in the sales process causes a customer to rethink, which results in more income for the seller.
Build Better Relationships with Customers
The benefits aren’t limited to the seller. The customer also gains. Upsells provide them with more and/or better quality products at a cheaper price per unit.
Cross sells provide related products that complement the original purchase that may or may not have been thought of by the customer in the first place.
A combination of strategic upsells and cross sells can result in deeper customer satisfaction. Upsells and cross sells concentrate on existing customers and build upon the current relationship.
Increase Customer Retention
Customer retention depends on loyal customers. When a customer feels that they’ve been properly served, listened to, and treated with respect, a sense of trust and loyalty is created.
By giving your customers what they want, need, and expect through the use of upsells and cross sells, it’s possible to increase customer retention and boost your sales.
How to Successfully Upsell and Cross Sell
Successful upselling and cross selling require some tweaking of your eCommerce website.
You want to add upsell and cross-sell opportunities at the appropriate steps in the checkout process.
This can be done through coding or implementing pre-coded apps.
Check around the eCommerce platform that you use to see what options you have available to add upsell and cross sell opportunities to your checkout process.
Determine Best Products to Upsell
When trying to determine the best products to upsell, it’s important to not seem more interested in a sale than the customer experience.
For this reason, choosing your upsells carefully will reduce the chances of alienating or irritating your customers with what could be perceived as gratuitous cash grabs or flat-out incompetence.
You want to ensure that your upsell is relevant to the purchase that the customer is making.
Mistakenly offering your customer a mobile phone with extra storage capacity when they’re buying a kayak is not going to instill confidence in their eCommerce experience.
It’s also important to show your customers why the upsell is in their best interest.
For example, you can demonstrate the savings they would achieve by accepting the upsell offer. Your upsell should also convince the customer that you’re paying attention to their shopping activity by presenting personalized recommendations.
Using their name and reflecting their viewing and purchase histories in your upsell pitch is more likely to result in a conversion than something less personalized.
There are different ways to upsell if they aren’t obvious upgrades to the product you’re selling. Using methods such as awarding a discount on multiple sales, offering free shipping for meeting a specific price point, or providing an extended warranty are just a few ways to add value to a purchase. Creativity can pay off huge dividends when determining the best products to upsell.
Run Your Offer And A/B Test
Once you’ve been able to come up with a list of potential upsell pairings, it’s time to run your offer and A/B test.
This will give you valuable feedback on what works and what doesn’t.
You’ll need to give yourself enough time during the testing period to allow the most popular options to make themselves known.
The amount of time needed for A/B testing will depend on how much traffic you get.
You’ll want a large enough volume of consumer decisions being made to give you a clear picture of which option has the better conversion rate.
Start with what you think should be the most popular option and let it run until you start to see results. Then compare the conversion results with a different option and see if there’s an appreciable change in customer behaviour.
You can test the products you’re offering, the price points you’re using, the ad copy describing the benefits, the page graphics, the layout of the upsell, etc. The possibilities are almost endless.
The important thing to remember when running these experiments is to only change a single variable with each test. This allows you to pinpoint exactly what’s causing different outcomes.
Measure and Optimize
Once you’ve run your tests, it’s time to measure and optimize for the best results.
Ideally, this analysis will allow you to identify an upsell or cross-sell technique that works better than others.
Several online tools can help rank the top-selling price points, layouts, ad copy, links, etc.
There are even tools that can show you where on the page that people are clicking even if a link isn’t featured (if this occurs, it’s a sign you should be adding a link,) or how much time they’re spending on each page.
You should optimize your pages according to the results of your tests. This means implementing the things that result in more conversions and avoiding or removing those that don’t.
Boost Conversions With 1-Click Upsells
After getting a potential customer to your website, one of the most difficult areas to get them to pass through is the checkout screen.
This is where customers have to enter their payment information and begin to think about the pros and cons of making the purchase.
However, once they’ve made it through this process you have a chance to utilize what’s known as the 1-click upsell to boost your average revenue per sale.
The beauty of the 1-click upsell is there’s no need for the customer to re-enter their information and they’re not forced to go back to the home or shopping page. A single click will result in more revenue for you and a more relevant product for them.
You see this happen on eCommerce sites all the time where you can add additional items to your order through calls to action, such as “Recommended Items,” “People Also Bought,” and “1-Click Checkout.”
Making it as easy as possible to make an impulse purchase is what 1-click upsells are all about.
Again, think back to the fast-food prototype of asking if you want the bigger size drink for a few cents more. All you have to do is say, “Yes,” and you’ve just taken part in a brick and mortar 1-click upsell.
Here is an example of 1-click upsell that also uses personalization:
Effective Upselling and Cross Selling Strategies To Increase eCommerce Revenue
As we’ve hinted at throughout this article, upselling and cross selling are good ways to increase your AOV but applying these strategies without offering value and personalized service can work against you.
Effective upselling and cross-selling strategies to increase eCommerce revenue always ensure that the customer is treated as a valued individual and not simply as a source of cash.
To help instill this feeling while encouraging repeat business, the following approaches are starting points for creating a loyal and appreciative customer base.
Product Bundling Techniques
Using product bundling techniques is a well-proven way to increase revenue and sell more goods or services.
The archetypal fast food example of product bundling is the value meal. Rather than selling a lone hamburger, the value meal includes fries and a drink for a price that’s less than what it would cost to buy all three items separately.
The customer benefits by getting more value for their money by being allowed to buy a group of inherently related products for a lower price.
Leveraging User Generated Content
Sharing your customers’ experiences of your service is a way to promote trust in potential customers who are still weighing up their decision.
Leveraging user-generated content, such as product reviews, customer ratings, or user testimonials can allay fears in hesitant purchasers.
It’s only natural to trust other people’s opinions rather than heavy sales pitches and marketing campaigns. Provide a platform for your satisfied customers to tell their stories about your product to potential customers who are still wary.
As you can see in this example from Amazon, they show the number of product ratings in their upsell offer:
Segmenting Your Customer Base
For upselling and cross selling to be effective, it needs to be appropriately targeted.
To do this correctly requires segmenting your customer base according to their wants, needs, behaviours, and defining characteristics.
How you segment your customer base will ultimately depend on the characteristics of the customers themselves.
However, establishing categories based on qualities such as demographics, purchase history, page views, etc. will allow you to offer relevant and appropriate opportunities more precisely.
Remember that offering tailor-made solutions to their problems is a proven way to create customer loyalty and repeat business. Customer segmentation will improve the accuracy of your personalization efforts.
Suggesting Premium Products
A guaranteed way to increase your revenue is to sell higher priced items. That said, not everyone is convinced that spending more is necessarily worth it.
Your job is to change that mindset.
When suggesting premium products, it’s important to provide the customer with information that allows them to justify the extra expense.
You can do this by presenting side-by-side product comparisons and allowing the customer to make the decision.
Spelling out the benefits of the premium product and reducing any doubt the customer might feel about the higher price is what you should be trying to accomplish.
Ultimately you need to make the customer believe that the added value is worth more than the price differential.
Utilizing incentive programs is another way to boost your AOV and overall eCommerce revenue.
There are different types of incentive programs, each with its advantages. As an experienced internet marketing company, there are several types we recommend as mentioned below:
If the customer is already primed to buy a product, an incentive program can be used to expedite the conversion and/or increase the size of the order.
- Time-sensitive discounts are one way to encourage the customer to complete the sale.
- Putting an expiration date on a deal can create a sense of urgency and motivate the customer to act.
- Establishing an order threshold will inspire the customer to spend a specific amount or buy a certain number of products in return for a bonus such as free shipping or a discount.
- A product extension provides the customer with a free add-on that complements the original sale. The extension acts as an incentive for the customer to buy in the first place.
- Trial versions or samples allow the customer to test the product to see if it’s right for them.
- If you have a product that you know people will love if they only tried it, a trial or sample should eventually lead to a full conversion.
Upsells and cross sells are an easy way to supercharge your existing sales base. Offering improvements and related products to your customer at opportune moments can increase your AOV while simultaneously improving customer satisfaction. Used correctly, upsells and cross sells will benefit both you and your customer’s long term. If you have any questions about how to use upselling or cross selling in eCommerce for your business, feel free to send us a message at [email protected]