The potential of deriving revenue from customers continues as they are filling up their carts, are just about to check out, and even after a sale has been made. There are many ways of subtly influencing customers’ purchasing patterns and choices. If you are willing to get creative, then cross-selling and upselling can go a long way in helping you increase profits.
According to Forrester Research, 10-30% of ecommerce purchases are based on personalized recommendations displayed on multiple pages that a customer typically visits while shopping. There’s no reason why cross-selling and upselling will not work for your business.
Amazon reports that nearly 35% of its revenue is achieved through these techniques, then what’s holding you back?
Decoding upselling, and cross-selling
To put it plainly, cross-selling and upselling are cousins in an extended family of sales techniques.
It is called upselling when you offer products that add value to the buyer’s original purchase. For example, you sell burgers, and the customer checks out with a basic one. You ask them if they’d like to add an extra patty, cheese slice, or any condiment. They get a more premium version of the burger, and you get more green bills than you’d have gotten otherwise.
In contrast, cross-selling encourages buyers to purchase items that complement their original order. For example, you sell burgers. You ask the customer if they want fries and a drink to go with it as a “meal.” This way, you sell more by building on the existing order.
Let’s take another example. If you sell customized apparel and a customer is in the process of checking out with a basic version of a hoodie, you can try and pitch a more premium/organic version, where they get the same design but in better quality. This helps upsell your product and increases the average order value. In this case, you can cross-sell matching phone cases and other accessories to form a complete set.
You may be thinking – this isn’t anything new, then why haven’t I heard of the terms before? Because the terms such as bundle deals, add-ons, and upgrades are often used interchangeably for these concepts. Subtle, right?
Benefits of upselling and cross-selling
Both of these sales strategies help increase the “average value per transaction” and motivate consumers to spend more money. When executed correctly, they are incredibly beneficial.
Apart from the apparent increase in sales and revenue, here’s what cross-selling and upselling could mean for your business:
Increased retention rate
Customers are looking to buy your products because they want their needs met. However, they may need to be made aware of the best solution that can meet their requirements. When you correctly deploy these techniques, it helps buyers find more value in your brand and business. Subsequently, it develops customer loyalty and recurring orders meaning an improved retention rate.
Increases revenue per order and lifetime value
Lifetime value derived by one customer means the total amount they spend over a definite period. If you offer good enough value, the buyer will tend to return and make many purchases. This will make your business more money when compared to customers that make one odd purchase and never return.
Chances are you have already spent a reasonable budget on marketing that got the customer to your store. Now, all you need to do is maximize their order value to boost ROI.
It doesn’t require an additional marketing budget
For small business owners, the biggest challenge is to pull in new customers. Traffic generation is getting more challenging by the day. It makes better sense to build on existing customers and their orders than spend additional dollars trying to get the fleeting attention of potential buyers.
Some argue that these techniques are a sleazy and unethical way of extracting more money from the buyer, but we obviously say otherwise. Think of it like this – if you are a buyer in the market for a laptop. You decide on one and are about to buy it when a better version catches your eye. Now, this model will suit your requirements better and seems like it would be worth splurging extra for. Wouldn’t you want to be made aware of what’s available in the market?
Would you consider this suggestion tacky?
When a business genuinely tries to help its customers make an informed purchase and get the best deal, it creates a sense of confidence and trust in the brand.
How to easily design multiple products
Don't worry, creating new products for cross-selling and upselling doesn't need to take too much time! With our product expansion features, you can quickly add bestselling designs to new products, or drag and drop your design files to add to new products.
Proven techniques for effectively upselling and cross-selling
If you are hitting a dead-end on deploying these strategies, here are some proven tips:
One of the best ways to upsell is to offer free shipping after the buyers have crossed a certain threshold. If you need help setting up promos in your Etsy or Shopify store, click here for a detailed guide.
Focus on recommending products that truly complement what your customer is purchasing or has already purchased. A random product selection will not help matters. Try introducing a “you might also like” or “you forgot these!” section at the checkout and product page. Never be too aggressive or offer confusing choices.
Encourage customers to go for a more premium choice. If you sell apparel, then nudge the buyer toward an organic or higher-quality version.
Remember to display customer reviews emphasizing why a more premium version is a better choice.
After the customer has made their purchase, try to offer them a discount for the next order.
Show an upgrade when the buyer is viewing or checking out the basic version of the product.
Personalization helps immensely. Know your customers and how they think. The better you know their habits, the better you can pitch products according to their tastes.
Pull in the stats to assist you. Use historical sales and insights to analyze purchase trends and behavior.
Employ an effective email marketing strategy to keep in touch with the buyer and inform them about new drops, offers, and offer valuable content. You also use this tactic to pull in abandoned carts and remind customers about the products they are interested in.
Successful upselling and cross-selling can be tricky to master. However, your seller’s intuition, consumer statistics, and creative thinking can go a long way in mastering these techniques. Once you do, it could boost your revenues, evoke customer loyalty, and increase your retention rate.
Check out our catalog and get started on applying these sales techniques!