Upselling and cross-selling is the art and science of introducing customers to better or complementary products to what they are currently interested in. Offline retailers have been doing this for decades (Would you like fries with that?) and there’s a lot of advantages for both the customer and the merchant. In fact, according to one Forrester research analyst, product recommendations like upsells and cross-sells are responsible for an average of 10-30% of ecommerce revenues.
In this post, you’ll learn why product upsells and cross-sells are so important, what you should be offering and how to do it.
Let's jump into it.
The Difference between Upselling and Cross-Selling
Upselling and cross-selling are commonly confused and the terms are many times used interchangeably, however, there's a difference. Before we go into more details about cross-selling and upselling, let’s first take a look at the difference between the two.
Let’s say a visitor is looking at purchasing a 13” mid-range laptop for $1,200.
Upsell: After selecting a laptop, the customer is immediately presented with several options for upgrading the processor. In this case, the merchant is trying to upsell the customer to a more powerful (and expensive) computer. Essentially they are trying to get the customer to to spend more on the same product or product type that they are currently looking at.
Cross-Sell: After the customer selects the processor upgrade, they proceed to the next screen where they are presented with the option to also add a printer to their order. A printer is a logical accessory for many computer consumers and since it’s related to the original product that the customer was interested in, it's considered a cross-sell.
Why is Upselling and Cross-Selling Important?
Well-executed upselling and cross-selling techniques can lead to a boost in revenues by selling more to the same customer, however, it's not all one-sided and the benefits extend to the customer's experience as well.
By effectively upselling and cross-selling you can make sure that the customer chooses the right product for them, and that they have everything they need to use that product.
As an example, batteries are a perfect cross-sell item for products that don't come with their own batteries. Not only would this increase the total cart value but it also prevents the customer from receiving an item they can't use immediately.
Should You Focus on Upselling or Cross-Selling?
It’s a common dilemma. With limited real-estate and the need to not overwhelm or bombard visitors and customers, what type of recommendations should you focus on? Should you upsell to show more expensive but similar products, or should you cross-sell by presenting related and complimentary items?
According to research from Predictive Intent, upselling performs 20 times better than cross-selling when it comes to product pages.
The graph below shows that upselling drives over 4% of total online sales, versus just 0.2% of sales driven by cross-selling tactics.
It should be noted however that cross-selling was shown to be much more effective when presented on the checkout pages versus the product pages. In this case, data from PredictiveIntent’s clients, showed that cross-selling can drive sales by 3%.
What Should You Upsell and Cross-Sell?
Ultimately, the purpose of upselling and cross selling gets lost on many merchants. Focusing on selling more and increasing average customer cart size isn’t always the best or right strategy. Instead, you should focus on the customer experience.
Consider what makes actually makes sense to show your customers at at which point in the purchase lifecycle. If you’re not suggesting and showing relevant products, you're going to have poor click through and conversions and ultimately not enhance the customers purchase experience, or your revenues.
There are two other factors you should consider when promoting upsells and cross-sell opportunities to your visitors:
When choosing upsell and cross sell products to display, avoid suggesting products that increase the overall order by more than 25 per cent. For example, if the original product the visitor is looking at is $100, you want to avoid showing customers cross-sells and upsells that are greater that a $25 increase on the original product.
Introducing visitors and customers to products unfamiliar with them may only serve to confuse them. The greater familiarity your customer has with the add-on item, the more likely they are to buy.
Don’t Overdo It
Finally, when you’re considering what to upsell and cross-sell your customers on, always be tactful about it. Hitting your customers over the head again and again, page after page is only going to damage the customers perception of your brand and may even hurt overall conversions by overwhelming them.
Consider this piece written on the Econsultancy blog about the overdone upsell and cross-sell opportunities of GoDaddy.
Upsell and Cross-Sell Apps
There are a lot of ways you can use upsell and cross-sell to enhance your customers purchase experience while increasing your average order size as well.
Below we have featured some ways for your to consider in which you can up and cross sell your visitors and customers as well as apps to help you achieve the desired results.
Product Upsell ($9.99-$59.99/month) - Product Upsell from Bold Apps is one of the most popular apps in the Shopify App store with over 500 reviews. Loaded with features, this app will allow you to create and display relevant upsell offers and add-on products for customers based on shopping cart content, total cart value or even a combination.
Nosto (1-4% of revenue generated through the App) - Nosto uses powerful algorithms to automatically and in real time recommend the most relevant items for each individual customer throughout the entire shopping journey. Nosto comes with a default recommendation setup including up- and cross-sell recommendations, toplists, browsing history recommendations and much more placed on the most appropriate page types to boost sales.
Reccomendify ($9.95-$49.95/month) - Reccomendify provides several options for helping you upsell by providing product or cart page recommendations using their algorithm to automatically display related products or by allowing you to manually select the recommended up and cross-sells for each product.
Sellout ($20/month + $0.005/per customer) - Sellout sends out automatic emails with cross-sell product recommendations based on your customers, their past purchases and the products available in the store.
Receiptful (Free) - Use your email receipts (one of the most opened customer emails) to provide your customers with additional value and introduce them to new products and product categories. Receiptful allow you to easily customize your email receipts so you can increase your customer lifetime value.
The Motivator ($4.99/month) from Bold Apps or Nudge ($2.99/month) is slightly different from the other methods we have discussed. Instead of showing better or related products, it achieves upselling by encouraging visitors to spend more to reach certain spending goals you have set out. For example, free shipping on orders over $100 or Spend $50 and receive a free gift.
Although your motives are always going to be increased sales and average order size, it's important to also consider the experience from a customer perspective. Offering customers seemingly random products wont cut it and can just leave customers more confused. Carefully look at the array of products you offer and consider what makes the most sense to offer the customer and at which point and you'll be well on your way to increasing your revenues by selling more to the same customers while providing a better experience.
About The Author
Richard Lazazzera is a an ecommerce entrepreneur and Content Strategist at Shopify. Get more from Richard on Twitter.