When To Cross-Sell vs Upsell in the Customer Journey
If you’re searching for ways to increase your average order value (AOV), the average total of every order placed over a set period of time, cross-selling and upselling are two very effective ways in accomplishing that goal. In fact, both cross-selling and upselling are responsible for 10-30% of e-commerce revenue.
There are many eCommerce marketing opportunities during the customer journey to cross-sell and upsell and when done properly, your revenue and your customer’s experience will increase quite a bit.
Cross-selling invites customers to buy related or complementary items that can be executed during checkout or after a purchase, by including personalized prompts at a specific stage in the process. It’s all about discovering new solutions that increase how useful existing ones are in the consumer’s eyes.
Good copy is important when cross-selling, so using phrases like, “You May Also Like,” or “Others Also Bought” entice customers to purchase something they may not have seen earlier or something that goes well with what they already purchased. Cross-selling messages can help you jump on the opportunity of post-purchase excitement and turn that excitement into another sale.
Here are some statistics about the importance of eCommerce product recommendations.
- Statistics show that shoppers who clicked on product recommendations are 4.5 times likely to add that product to their carts
- Purchases, where a recommendation was clicked, saw a 10% higher AOV and 5 times higher per-visit as compared to purchases where a recommendation was not clicked
- 37% of shoppers that clicked a recommendation during their first visit returned, compared to just 19% of shoppers that didn’t click a recommendation during their first visit.
What’s an Example of Cross-Selling?
After ordering from Nordstrom Rack, you’ll receive shipping updates via email. Within this email, it shows you what will be in the package you ordered and when you scroll down, it offers you additional deals on clothing based on what you purchased.
Hmmmm. “I didn’t see those workout pants when I was ordering and wow, look at the sale price!” This drip email strategy incentivizes the customer to add them to her cart and create a new order in a very easy way. The customer experience is one that feels personal and nurturing. It appears like Nordstrom rack knows the customer and what she likes to wear based on her previous purchases. This example of cross-selling is in the post-purchase stage and even though a few days to a week has gone by, with the power of cross-selling, Nordstrom Rack can still gain the customer’s attention.
Upselling is a great way to improve your marketing strategy because it’s easy and makes sense to the existing customer. An upselling strategy is when you persuade customers to buy a more expensive or upgraded version of items or add-ons to make a bigger sale.
Take an airline seat. When you book your ticket, you’ll often be asked if you want a seat with more room. In 2014, upselling was projected to net JetBlue an additional $190 million in revenue. WOW! That’s an upselling success.
When an existing customer doesn’t have to go through another buying cycle, yet sees something attractive that’s better than what they came to purchase, upselling is a win-win for everyone because it’s easy. People like easy.
Here are some powerful statistics regarding upselling:
- Nearly 35% of companies offer a free version of their featured product or service, as shown in the example below
- 82% of companies agree that customer retention is cheaper than acquisition
- 65% of a company’s business comes from existing customers
What’s an Example of Upselling?
WeTransfer is a great tool for sending large files. The best part is there’s a free option. Right next to what the free option offers are their Pro account. For a small monthly fee, you get a lot more goodies than you can with the free account. This is a great example of an upsell offer as it shows the value of upgrading to a Pro account. There are more bullet points on the Pro side so to the eye, it’s more attractive and advantageous to the consumer.
Why Are Cross-Selling and Upselling Important?
These strategies not only bring in more revenue for you, but they also create value and incentives for the customer to spend more. Cross-selling and upselling can be used in multiple stages of a sale so there are multiple opportunities for the fish to bite. There are so many ways to use these strategies at any stage of a sale. For example, strengthen each strategy by trying out an email drip campaign. Aside from the time of sale, these techniques can be effective post-purchase as well. We’ll learn more about that later on.
Cross-sells and upsells are based on your customers’ likes, so it’s delivering what you know they’re interested in and what makes sense for their spending habits. You wouldn’t want to recommend and cross-sell a $1,000 purse to a customer who bought clothes totaling $150. Does the purse work with the outfit? Absolutely, but perhaps showing them a purse that’s closer to their price range would have a better chance of doing the trick. Positioning it as, “Complete Your Look,” is a nice strategy along with a more realistic price compared to what they already spent.
When these strategies are made easy for the consumer, they’re more likely to click, since they don’t need to go through the search process again. They see, they click, they purchase. Voila.
ManyChat makes it easy to use Messenger and SMS Marketing and creates sequences for these actions by adding email triggers when a customer places an order in your Shopify store. When they receive their follow-up thank you message, it’s a perfect opportunity to show items they should also consider buying based on their original purchase. This method also keeps them coming back again for future purchases and can help prevent shopping cart abandonment
An example of incentivizing customers to follow through on a cross-sell or upsell purchase might be a coupon for future purchases, an invitation to a customer loyalty program, and more. Did you know the number of people who use digital coupons is expected to hit 145.3 million users by 2021?
Product recommendations can be highly personalized in Facebook chatbots by combining everything you’ve learned about your current customer. From quizzes, conversations, and other interactions, with actions like purchase history and engagement.
Here’s an example of utilizing a Messenger bot via ManyChat to share coupon information with customers, driving them to your eCommerce site. You can use this same strategy for thanking your customer for their purchase, as mentioned, by offering them a coupon for future purchases or cross-selling with a featured product related to their original purchase.
What’s a Cross-Sell and Upsell Strategy?
Now that you have a good idea of what cross-selling and upselling are, it’s important to note that there should be a strategy or rather a method to your madness. If not, your customers could be turned off and these strategies will lose their magical powers.
- When it comes to the benefits of these methods and AOV success, it’s important to remain customer-centric versus what you as a company can get out of it
- Cross-sell products should be at least 60% cheaper than the product added to cart
- Don’t offer your customers too many choices as it can be overwhelming
- Pay attention to the spending of your customer so you suggest appropriate items that aren’t too far out of their price range and more likely to be taken into consideration
- Bundling related items that are cheaper together than individually is a great incentive
- Offer multiple shipping options that demonstrate variations of delivery speed and cost
- Understand your current customer and what’s of value to them
- Offer something bigger and better for a small upcharge that may be irresistible, such as a television
- Ensure recommended items are related to the purchased item
- Cross-sell and upsell your popular items that typically sell well, so customers can read several positive reviews
- Show how an additional product or an upgrade will make your customer’s life easier, like a warranty
Here’s an example of the bundling technique that Amazon utilizes:
Where Can You Deploy Cross-Selling and Upselling Strategies?
There are several places for customers to see your cross-sell and upsell opportunities without overwhelming them or being too salesy. The good news is if you don’t reach them at one particular point in their customer journey, there are other stages to do so.
- Shopping cart
- Purchase receipts/thank you message
- Shipping confirmations
- Drip marketing campaigns via Messenger and/or email
- Site visits
- Social media
If you’re looking to increase AOV, revenue, sell more products, and show more value to your customers within your business, cross-selling and upselling are what you need to implement in your eCommerce store.
Remember to create a positive customer journey and figure out the best strategies to do so. Your loyal customers will enjoy the shopping process with you, feel appreciated, and want to share their customer experience with others.