If you don’t cross-sell or upsell on your e-commerce store, you are losing money. Product recommendations drive about a quarter of sales, simplify navigation, and contribute to personalization (which is expected by over 75% of the shoppers).
Moreover, product recommendations create a better customer experience by adding value to the initial purchase. Do you see why marketers shouldn’t miss out on this opportunity?
Whether you are an experienced e-commerce marketer or a savvy entrepreneur, our guide will give you a few ideas on how to take your sales to the next level and keep your customers happy using cross-selling. Let’s roll!
Are upselling and cross-selling the same thing?
Prior to everything else, let’s get to the bottom of what’s the difference between upselling and cross-selling. In essence, both techniques serve as means for increasing sales and getting a customer to buy more. Although they are often synonymously used as interchangeable terms, there are several key distinctions.
Upselling is all about convincing a shopper to purchase an advanced version of a product or some additional extras. Perhaps one of the simplest examples that you could have come across are offers to switch to an enhanced “package” or to upgrade a service you use.
For instance, companies that focus on B2C sales, primarily software or some services, can use upselling by suggesting buyers invest in a plan upgrade. Say, choose in favor of an extended package instead of the one that’s currently used. An example of that could be moving from the “Mini Business Web Hosting” plan to “Plus” as shown in the following screenshot. The client can thus benefit from extended storage, complimentary backup, and other perks.
Cross-selling means suggesting a complementary product to the client’s purchase. Such additional items extend the functionality of the final purchase and add value to it. These can be items that go well together as a combination. The famous “Would you like fries with that?” is a perfect example of relevant cross-selling.
Below you can see an example of a “You May Also Like” section on the Bright Star Kids online store. It is a progressive web application that was built using the Magento 2 PWA Studio. The pitched products could make a good addition to the order since a shopper can add a lunch bag and water bottle to the backpack to make a neat combo.
The power of cross-selling
Why is cross-selling so useful? This technique is indeed effective as it allows a business to gain in multiple ways. There are several reasons behind the success of cross-selling in online retail stores.
1. The first is impulse buying.
It is a well-known consumer behavior of buying an unplanned product spontaneously. From mints and chocolates in the supermarket to cars and home appliances, impulse buying is a strong psychological factor.
Cross-selling sections of an online store can serve as such “product shelves” by the checkout counter. They highlight complementary products or something extra worth buying. The tactic allows you to increase the customer’s cart, thus expanding the average check size.
2. The second reason is consumer surplus.
It is the gap between the amount of money that the customer is willing to pay and the actual product price. Cross-selling helps minimize this gap by giving customers a chance to spend more and receive more value.
Let’s say your customer is buying jogging pants. A matching hoodie or sneakers can make the outfit complete as shown on the screenshot that was taken on the Armani Exchange online store.
Perhaps the client doesn’t really need this extra item. But you may encourage them to add the product or accessory in many ways, say, by offering the chance to receive free shipping if the order exceeds the X sum. So, by adding the item to the order, the client can get free shipping and a complete look. This brings value and satisfaction to the customer.
3. The third is an undeniable boost in income.
In fact, statistics show that online retail businesses can expect an up to 20% income growth if they implement cross-selling and upselling wisely. This sales and marketing strategy may bring a deal of return on investment.
Therefore, some of the major overall benefits of cross-selling for online stores are:
- growth in revenue,
- increased client retention,
- improved customer experience,
- deeper insights into customer behavior.
Where are cross-selling sections suitable?
Ready to learn about the applications of cross-selling? Here are some ideas.
1. Recommendations on the website
One of the most beloved tactics used by e-commerce marketers is adding “Other customers also bought” or a similar section on the product page, just as in the example from Tommy Hilfiger below.
Shoppers trust other shoppers and love honest testimonials. So once a customer sees real reviews and recommendations, they are more likely to buy this product.
This is an awesome and simple marketing strategy that you can take note of. Obviously, as an e-commerce store, you’ll need to put in some effort in picking and matching items to pitch in these sections. If you don’t have the opportunity to add on extensions to your e-commerce platform that would automatically collect and display such data, then you’ll need to do it manually.
2. E-mail marketing
Because emails remain a powerful marketing tool, marketers actively use them to cross-sell. Such emails serve as a follow-up that is sent after the purchase is completed. They inform the user about the possible additional products that would go along with the bought item and can be sent either manually or automatically.
3. Personalized suggestions
There is no need to remind about the importance of personalization and users’ expectations towards it. That’s why the “Recommended for you” sections work so well.
Being unique and tailored for an individual user, these sections perform exceptionally well in terms of cross-selling. You could also try implementing personalized product recommendations into your store.
Even better, if the recommendation is targeted at the two eyes looking at the screen, this can become a trigger to check out the product. Below we can see a screenshot taken on the official Guess online store. The products in the “Our Suggestions for You” cross-selling section are of similar styles and colors that may appeal to the shopper.
Marketers and online store owners should also bear in mind proper pay-per-click ads and retargeting. As such, Facebook allows you to create relevant ads that would show your customers recommended products in accordance with their behavior in your store.
There is one more remaining question: when should you cross-sell? Is it at the beginning of a shopping process or after its completion? You can actually do both.
The first option is to cross-sell when the customer is in the cart. While the user has not paid yet, you may convince them to toss in something extra to their shopping cart. Check out how Tom Tailor uses this method. Once a user adds an item to their cart, a pop-up with additional items appears. It is shown prior to checkout or cart area view.
The second option is to cross-sell after the purchase is completed for engagement purposes. You may gently hint at the recommended products via a follow-up email or a website pop-up.
Using upselling in e-commerce
Upselling is all about offering a similar product but at a higher price. Unlike cross-selling, upselling does not offer any complementary products and adds value by suggesting a more expensive option. As shortly described before, a premium subscription is one of the most popular upselling examples.
Surprisingly, upselling is responsible for 4% of total sales, as per Econsultancy, while cross-selling drives in 0.2% only. Of course, the numbers may vary depending on the type of online business and the sold products or services.
Upselling is incredibly efficient, yet, there is an important question to consider: how would a customer win from the upgrade? This is a primary thing to keep in mind when planning an upselling strategy. You need to clearly show how a customer would benefit from purchasing an upgrade without feeling ripped off.
Effective upselling ideas
Here are some ideas for efficient upselling:
- Upgrade: if the customer uses a free (or paid) subscription plan, you may offer to upgrade for a more expensive option. Don’t forget to list all the benefits!
- Personalization: once the customer chooses an item, offer an option to customize it.
- Quantity: ask whether the customer wishes to purchase a few items at once.
- Discount offer: upgrades that come with discounts work amazingly well. When the customer is offered a more expensive item that comes with a discount, he will most likely buy it and feel grateful and happy!
As shown on the following screenshot from the Banana Republic website, the user can browse entire outfits with accessories to complement the browsed item. This is a far better experience than what you can get from the standard “You may also like” sections shown in the previous examples, agree?
Which parts of the online store can benefit from upselling?
Now let’s move on to the areas where you can implement upselling.
1. Shopping cart
Before the customer pays for the product, you may offer a more expensive option right in the cart, in the form of a recommendation, or as a part of the dropdown list.
When upselling in the cart, it’s important to emphasize the upgrade value and little difference in prices. Justify why the customer should change their mind with clear benefits and ensure the price does not differ drastically.
A tip: side-by-side product comparisons work great. A customer is more willing to make a decision when all the data for consideration is organized in an easy-to-consume manner. Here’s an example of the Verizon Unlimited plans comparison. We see highlighted perks, features, and other major takeaways in one table format.
2. Live Interaction
Strike the iron while it’s hot! Upsell when the customer openly speaks about his struggles or issues.
If you have a live chat in your store or app, it may be a perfect chance to upsell. While speaking with the customer, you may learn about their current needs and grab the opportunity to offer a solution.
But be careful in forming your proposal. Don’t start with “Can I offer you X?” Instead, try something like: “I see that you have concerns about X. Maybe you’d be interested in learning about Y?”
If a customer has stayed with you for a significant amount of time and purchases products on a regular basis, try upselling. But first, thank them for staying loyal to your brand.
In this case, you can offer a discount to go with your upgrade. It would complement the customer’s milestone nicely. You can do it via email or a pop-up.
Taking the extra mile to offer your customers something special can be very beneficial for your business. Various selections of products that a client might find to their taste can help them choose the perfect item or even help them add several ones to their shopping cart. An e-commerce store can gain over a quarter of revenue if it gives cross-selling and upselling the due attention. Hopefully, the best practices, tips, and examples can serve as inspiration!