How do you generate more sales and improve the customer experience with cross-selling and upselling?
Upselling and cross-selling is the art and science of introducing better or additional products to customers they are interested in at that moment. Offline retailers have been doing this for decades (such as “Want fries with that?” at McDonalds). And there are a lot of benefits for both the customer and the retailer. In fact, according to a study by a Forrester analyst, product recommendations such as upsells and cross-sells are responsible for 10-30% of e-commerce sales.
In this article, you will learn why product upsells and cross-sells are so important, what you should offer, and how to do it.
The difference between upselling and cross-selling
Upselling and cross-selling are often used interchangeably, but there is a difference. Before we get into the details of cross-selling and upselling, let’s have a look at the difference between the two first.
Suppose a visitor is looking for an Apple laptop of approximately 1200 euros.
Upsell: After selecting the laptop, the customer is immediately presented different options for upgrading the processor. In this case, the retailer is trying to sell the customer a more powerful (and more expensive) computer (upsell). In fact, they are trying to convince the customer to spend more on the same product or product type they are viewing at that moment.
Cross-sell: After the customer has selected the more powerful processor, they proceed to the next screen, where they are offered the option to also add a printer to their order. A printer is a logical accessory for many consumers because it is related to the original product the customer is interested in. This is considered a cross-sell.
Why is upselling and cross-selling important?
Well-executed upsell and cross-sell techniques can increase sales by selling more to the same customer, but this is not all one-sided, because the customer also enjoys the benefits.
By effectively upselling and cross-selling, you can ensure the customer chooses the right product and has everything they need to use that product.
For example: batteries are a perfect cross-sell product for products that are sold without batteries in the package. This not only increases the total shopping cart value, but also prevents the customer from receiving a product they cannot use immediately.
Should you focus on upselling or cross-selling?
It is a common dilemma. Taking into account the limited area on screen and the need not to overwhelm or bombard customers, what sort of recommendations should you focus on? Should you upsell by showing more expensive but similar products, or should you cross-sell by presenting related and complementary products?
According to research by Smart Focus, upselling performs 20 times better than cross-selling when it comes to product pages.
The chart below shows that upselling accounts for more than 4% of the total online sales, compared to only 0.2% of the sales being driven by the cross-selling tactic.
However, it should be noted that cross-selling is much more effective when presented on the checkout pages instead of the product pages. In this case, customers of Smart Focus show that cross-selling can lead to 3% additional sales.
What should you upsell and cross-sell?
Ultimately, the goal of upselling and cross-selling fades with many retailers. Focusing on more sales and increasing the average shopping cart volume is not always the best or right strategy. Instead you should focus on the customer experience.
Think about what is actually useful to show your customers at which points in the purchasing cycle. If you suggest or show non-relevant products, you will achieve poor click through and conversion and you will not improve your customer’s purchasing experience or your sales.
There are two other factors you should consider when promoting upsells and cross-sell opportunities with your visitors:
If you want to show upsell and cross-sell products, try not to suggest products that increase the overall order value by more than 25%. For instance, if the original product the visitor is looking for costs 100 euros, avoid showing them cross-sells and upsells that cost more than 25 euros.
If you introduce visitors and customers to products they are not familiar with, this only leads to confusion. The more familiar your customer is with the additional product, the more likely they are to purchase it.
Do not exaggerate
Finally, if you are considering what you are going to upsell and cross-sell to your customers, always be tactful about this. If you bombard your customer with the same product over and over, this will adversely affect the customer perception of your brand and even the total conversion.
Although your motives will always revolve around higher sales and a greater average order size, it is important to also consider the experience from the customer perspective. If you offer your customers seemingly random products, this will not help you and may confuse customers. Carefully look at the many products you offer and consider what is most useful to offer the customer and when, and you will be well on your way to increasing your sales by selling more to the same customers while providing a better customer experience.