A Guide to Upsell and Cross-sell (Includes 5 tips to improve sales & more)

A simple technique to improve sales…

…and to keep customers happy.

This method works on all categories.

Wondering what these are?

Here we go…

You have an ecommerce site.

You have a lot of categories on it.

Then you have your biggest assets – your products.

And you have customers visiting your product pages –  and buying it.

That’s good, right?

It is, yes – kudos to you on achieving this feat.

But here are two opportunities for you to

1.Influence your customers to buy a BETTER version of the product they have selected.

2.Make your customers aware of the accessories of the products they have or are about to add to cart.

This is where we come to the concepts of Upselling and Cross-selling.

We will cover both of these concepts and more in this post.

So what is Upselling?

Upselling is the process of encouraging customers to purchase a higher end of the product that they have already selected or are in the process of doing so.

Here is an  example of Upselling on Flipkart

Example of Upselling

If you scroll down, you will see a horizontal scroll of similar products

Upselling example on a mobile product

These are alternatives to the main product on the page.

Check the products.

You will see that the price points of these alternatives varies from that of the main product.

By plus or minus X percentage.

This is usually the case as customers should not feel fully pressurized to check only for higher prized products.

They would be at ease if they see products on both higher and lower ends.

Keep in mind that Upselling works best for existing customers when are they on your  website.

5 tips for Upselling:

Basically Upselling works on the basis of an algorithm that runs in the backend.

You will provide the input for that algorithm.

Hence, you need to be careful while doing so as it can cause critical errors on your site.

And for your customers.

 Here are a few things to remember while Upselling

1. Considerable price range

2. Right products and category

3. Correct gender

4. Proper size

5. Other category-dependent factors

To elaborate on the above,

1. Considerable price range

Be sure to choose the right price range here.

You don’t want to add too expensive or very cheap products.

A customer who has shopped for say, Rs.100 will not be interested in a 1000 bucks product.

More expensive products tend to be ignored and lesser priced ones would affect your revenue.

The standard range is plus or minus 25%.

It means that:

The recommended product range should be priced from 25% below the main product price to 25% more than the main product price.

Example: If the main product is priced at Rs.100, then the alternative list price would start from Rs.75 to Rs. 125.

So, you can work out something like

Product range + – 25% price of the main product

If no products available in the above range then

Product range +- 50%

Even here, you can split the list 60/40 or 70/30 where majority of the products on the list are higher priced.

2.Right product and category

This is an obvious one. You cannot show mobile phones to someone who is about to purchase shoes right?

So you need to add the same category and similar  products in Upselling.

3.Correct gender

This is also an important factor.

Someone who is on a gender-specific product like shoes, apparel, watches etc, you need to show them products from the same gender.

You can also showcase unisex products.

4. Proper size

This would correspond to products like shoes, apparel or other categories where size is involved.

Customers about to purchase a UK size 12 shoes will not be interested in any other sizes (obviously).

5.Other category-dependent factor

These would be products that have specific requirements other than the above.

I had mentioned earlier that Upselling works on all products.

It does.

But it works best with the popular ones.

When you provide recommendations, it is crucial that you do so with the why.

That why would be – why should the customer choose the Upselling product instead of the one he has already chosen?

You should provide a clear, relevant, beneficial feature of the Upselling product.

It should be compelling.

Sometimes even though customers know what they want, they may forget certain aspects that they need or they may not be aware of new features available.

Upselling can help them.

Browsing these products can help them realize or remember an important factor that they had forgotten or be aware of new attributes.

But to do so, you need to know who your customers are.

You should know their requirements and likes.

And how would you know that?

One word: Engagement

To be in constant non-intrusive contact with customers is vital to any business, yours included.

Frequent communication is a must.

Which helps you gather data on your customers.

You need to then segment your customers based on their shopping behavior (apart from age, gender and location of course).

Think from a customers point of view to arrive at a list.

Based on this, you need to create your Upselling product list.

A word of caution though:

Do not Upsell or Cross-sell to all your customers – at least to begin with.

You would want to exclude customers

– who have a high rate of product returns post urchase.

– who often misuse services and shout out for every small issue

Why is Upselling important?

Upselling, being a simple technique is also an opportunity to improve sales and customer journey.

How so?

1.Well, the higher priced product customer buys, better will be your Average Order Value (AOV) and higher will be your revenue and Return-on-investment (ROI).

2.The customer spends more time on your site thereby increasing session-time metric.

3.More website pages will be viewed.

4.Customer retention increases.

5.Customers become loyal.

6.Increase in customer lifetime value (CLV).

7.From the customers’ point of view, he gets a better product than he was searching for.

8.Flexible offers with convenience.

You see, there is a lot to gain from Upselling.

Lets check on  Cross-selling now, shall we?

What is Cross-selling?

Cross-selling is the process of promoting complementary items of a main product.

Examples of Cross-selling include earphones, SD cards, computer mouse, laptop case etc

Basically the items which is used frequently with the main product, you get it?

Below is another example on Flipkart

Cross-selling example on a mobile product

You see there is a screen guard combo offer with the mobile.

Let me give another yummy example.

When you are at McDonalds, say you order a burger, the guy will ask if you want to upgrade to a Big mac/Maharaja burger (Upselling) and/or he will ask if you need Fries (Cross-sell) with your burger.

Simple as that.

Cross-selling is also done at the checkout process.

When the product is added to the cart, it is a good time to ask the customer for these cousins of the main product :).

Through Targeted emails

You can Upsell and Cross-sell using marketing automation also.

You need to clearly state the purpose of the email with the benefits.

Get a clear picture as to what and why the customer has purchased.

Create a targeted list and segment them.

Personalize the offers.

For example, say someone has purchased a TV.

You can promote  TV stands, brackets, mounts etc to this customer.

Say a customer has bought a mattress.

Suggest Pillows, pillow covers, blankets etc.

You can test these out with different categories and accessories with packages to entice customers to increase their order value.

You will most definitely have Free Shipping (above certain value) which you can highlight.

Add any loyalty points accumulated by the customer.

Add reviews of the Upsell product, if any.

Check if any freebies can also be added as part of this.

Focus more on premium products and categories – to begin with.

Arrive at the perfect time to send the email so that customers will open it.

There are customers who make repeat purchases. Consider an email to a part (pre-determined) of this group based on their purchase history.

Note:

Do not bombard the customer with too many offers.

If the customer has already rejected the Upsell/Cross-sell, exclude them.

Upsell and Cross-sell representation

There is no strict manner in which you need to promote these products.

You can name them in many ways namely

“Recommended products for you”

“You may also like”

“Customers who bought this also bought”

“Customers also viewed”

“Similar products”

…and so on.

May it be Upsell or Cross-sell, remember

It is easier to sell it to existing customers than to new ones.

So, coming to the big standoff

Upselling Vs Cross-selling

Difference between Upselling and Cross-selling

Now here is a bonus

There is also a third way of promoting products:

A combination of Upsell and Cross-sell

And this is called Bundling.

As the name suggests, here you create a ‘bundle’.

This will have the main product and its accessories.

Psychology of bundling

The bundle price will usually be slightly over than the combined individual prices of those in the bundle (logically).

The advantage here is that customer gets all he wants in a single click at a  lesser price.

The limitation is that the customer might be looking for a main product or an accessory that is not in bundle.

Bundling can either be a boon or a bane.

It depends on the right mix of products put together.

Analysis of product performance can give you the insight on how to arrive at products for bundling.

A thorough scan of various customer journeys provides an opportunity to look upon multiple touchpoints across different channels.

Then again, you can A/B test this and find out :).

Lets take a look at the below example on Best Buy

Bundle promotion for e-commerce

Along with the headphones there is a Apple Airpod, JBL Bluetooth Speaker and an Apple Watch.

All are pre-selected.

You just need to click on Add to buy the bundle.

Customers will save time, effort and money.

Types of bundling

1.Main products with  complementary products

This is the one above  – with the headphone

2.Multiple same products

There are bundles of multiple units of the same product.

This works for products say toys that sell multiple units.

What are the benefits of bundling?

1.It acts as a single stop for multiple purchases.

2.Will  increase your profits

3.Will increase sales volume

4.Bundle will take care of customers many needs at once

Of course, you need to do some trial and error when you want to offer bundling.

Over time you will find out the best product fits.

Needless to say, you will track the performance of your bundles.

It should be offered only if it generates profits and makes sense to the customer.

Conclusion

If  you are ignoring Upselling, Cross-selling and bundling, you are missing out on a lot of potential sales.

There is a bigger pool of interested people out there that  you can identify, attract, excite and retain using these techniques.

One Comment

  1. Avatar Hadi said:

    Nice post

    June 14, 2019
    Reply

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