Cross-selling and up-selling are familiar strategies to anyone who’s ever been involved in sales and marketing. This has been true as long as there has been commerce but today, in the virtual world, there are unprecedented opportunities allowing retailers to leverage technology and take cross-selling and up-selling to a whole new level. Maximizing the value of a single transaction and boosting customer lifetime value are greatly enhanced by a thorough understanding of the techniques surrounding these powerful sales strategies.
Think you know all there is to know about these fundamental concepts of sales and marketing tactics? Think again!
Cross-selling is about offering additional products that complement the item or service already purchased (for example, a case offered on the phone product page). It’s mainly about getting the customer to spend more money during the purchase process. Think about all the effort, cost and strategizing you went through just to get this customer to visit your store and make a purchase – doesn’t it make sense to try to maximize the value of what could be their only transaction on your site?
Cross-selling is more than just putting up suggestions and hoping for an impulse buy, like gum and candy at a supermarket checkout. It can also be a key part of the customer experience, making them aware of products and options they may not have known about and sometimes reminding them of add-ons to their main purchase that they may have forgotten in the buying process.
In other words, you can’t just think of cross-selling in terms of what it does for your bottom line. Cross-selling is about addressing the needs of the customer.
From the technical side, this can consist of creating sets/shopping lists in which products complement each other and displaying boxes of similar, complementary products, follow-up models of a certain series, etc.
There are many ways to implement cross-selling displays on your page, only patience and testing can tell you which is the most effective.
Cross-selling can be implemented on the product page in the form of product slides showing complementary products, or as recommendations of products selected by other users – which is particularly effective during the checkout process. If the products are used up within a certain period of time (e.g. nutritional supplements, beauty products) and the customer has given their consent to receive marketing content, it is worth reminding them about the new products in the email and encouraging them to make another purchase.
Remember that every click, every page view and every “Add to my list” is another data point that allows you to create a more personalized and effective display. Even if an “Other customers bought…” suggestion based on an item in a cart doesn’t result in a sale, it can still help you craft a more tailored experience in the future based on what gets viewed and what doesn’t.
It is worth noting that well-executed cross-selling doesn’t really have a downside. If it doesn’t work, no harm is done. Customers are very unlikely to see product suggestions as intrusive since they are part of every online shopping experience. As long as you’re not overly aggressive with, for example, pop-ups or some other distracting element that focuses too much on cross-selling suggestions, no one will hold the attempt against you. Yet, there is a good chance that the customer will decide to purchase supplementary products.
By highlighting the role of complementary products, you can:
- Show the customer that your offer is broader than he may have realized (promote less popular goods).
- Maximize the profit from each customer.
- Remind the user that he may need your product soon, increasing the benefits of ordering it now to save on shipping costs or later inconvenience.
A customer who is shopping may be guided by a number of criteria – the appearance of the product, price, brand, color or anything else on a long list of possibilities. Introducing them to options they may not have considered when they entered your site is the foundation of upselling. This includes offering both different brands and price points as well as the originally-searched product but with certain upgrades or additional features.
In an online store, upselling features are typically implemented at the product sub-page level, where the user who is researching the selected product can be encouraged to upgrade. Think of the familiar comparison-based graphics that allow the customer to easily see their current choice matched up against similar products available at a slightly higher price point, with all the relevant features and benefits of each highlighted.
Smart upselling techniques will offer gradual jumps in terms of upgrades and cost increases:
- A slightly more expensive option is a good as a simple reminder that the customer has much more to choose from than perhaps they originally thought.
- Another option with an even greater price differential can emphasize key differences in feature & benefits, quality, or other factors like warranty conditions, total cost of ownership, brand value, etc.
- There’s nothing wrong with adding a “moon shot” option, usually at the far right end of the comparison chart. This is where the high-value, high-margin choice goes – the best, most impressive option you have in this product category, complete with expanded information to demonstrate its value in relation to its price tag. While it may have the lowest chance of conversion, making it available as an option is cost-free and – who knows? – just might work with the right customer. Adding a “moon shot” option also demonstrates the wide selection available in your store, which is a key factor in staying top-of-mind when it’s time for customers to go back online in search of their next purchase.
In practice, this looks essentially the same no matter what product we’re talking about. Instead of an entry-level laptop, you offer another model from the same manufacturer with more memory or a better processor and another model that is far superior in every way. Instead of a basic, almost disposable grill, you feature one more likely to last beyond this summer and another with features for a pro cook, and so on.
Give customers choices and let their own curiosity, budget and interests take over. Again, just as with cross-selling, you’re pursuing this out of your own interest in maximizing the value of the sale but in doing so you’re providing a welcome service at the same time.
Up-selling won't work in every industry, but many stores use it very effectively. Especially if you offer products of varying quality across a fairly wide price range – think McDonald’s kiosks offering a quick upgrade from a single sandwich to a full meal, game publishers offering add-ons (action figures, posters, or other collectibles) to a limited collector’s edition or enhanced vehicle versions.
Up-selling is all around us, which is exactly why customers won’t resent it when they encounter it on your site – again, within reason.
Tips for cross-selling, up-selling and just selling
- Offer your customers multiple purchase options (upgrades and add-ons to a product) to maximize profits and increase the product’s competitiveness on the market, i.e., combine multiple products into packages or offer something like an extended warranty.
- Display only related products. In particular, it is worth following the main principle of cross-selling, i.e. show complementary goods to those already placed, for example, in a shopping cart. Someone who just spent thirty minutes browsing laptops and related accessories is going to be a little confused about why you’re suggesting a frying pan or shampoo at the checkout page. Also, suggest only a few products at a time!
- Collect data about your customer—we cannot stress this enough. Choose a tool that suggests goods that are interesting to the user based on their purchase, view and click histories. Avoid randomness at all costs.
- Stay in the customer’s spotlight. What should you do when a customer wants to buy something you don't have? You can inform them of extended delivery times, or ask them to provide an email address to which a notification will be sent that the product is currently on sale. Or, even better - offer other goods whose parameters are most similar to the one the user is interested in. This way, you won’t lose a customer, and they won’t have to wait until the goods they want are on sale.
- Be bold. Always combine products of the same type, but with more benefits. This solution is also perfect for digital goods, for example, to show in the form of tables what is included in a particular subscription, but also what is withheld from cheaper options.
There is no “right time” to use cross-selling and up-selling, because it should be used all the time. The only variable here is the degree to which you apply the techniques. As we mentioned, the passive approach is best. Make your visual display of cross-selling and up-selling options as attractive and informative as possible and let customers make up their own minds. Intrusive and irritating reminders about these products will only push them towards the exit.
The details will vary according to the layout of your site, but experimenting with the placement and appearance of cross-selling and up-selling displays is the only way to optimise their performance.
It’s no secret that driving traffic to your site is a complex and costly process. Getting the most out of every visitor and every transaction is key to your profitability reaching sales and conversion goals. Although they’re not new and exciting trends in ecommerce, cross-selling and up-selling are part of the foundation of any successful sales strategy so be sure that you’re always taking advantage of the opportunities they create.