Upselling and cross-selling on your eCommerce site should increase your revenue. Period. If they aren’t, it’s time to find out why by evaluating both your strategy and execution.
Before we dig into some hot tips for how to optimize upselling and cross-selling on your eCommerce site, here’s a quick review of the terms. Upselling and cross-selling are not the same thing.
- Upsells: Provide the customer with the option of purchasing a more expensive item that replaces what they are considering buying. Upsells often are presented on eCommerce sites as “customers also bought” recommendations.
- Cross-sells: Provide complementary items to what the customer is purchasing. You typically see this tactic displayed as “frequently bought together,” or “bundle and save” recommendations.
Both upselling and cross-selling are effective for increasing average order value (AOV) and each has an important role in the customer experience. But how can you know which tactic to use when and where? Is your current approach to upselling and cross-selling effective? Following are some key things to consider as you take a closer look at your site – whether you’re considering adding recommendations to your site or already have them and want to optimize.
Tip #1: Have the right mindset
Did you know that on average, humans make 35,000 (at least semi-conscious) decisions every day? That’s a lot of choices. When it comes to shopping, the number of different brands, models, features and prices can often feel overwhelming. That’s why we all love a good recommendation and/or curated products that go together. If your eCommerce store can help streamline at least some of that daily decision-making for consumers, you win. Therefore, it can be helpful to think of upselling and cross-selling as a critical part of a positive customer experience that helps lower the perceived risk of purchase and ensures customers feel good they’re making the right or best choices.
Tip #2: Get the timing right: Use the sales/conversion funnel
Optimizing when and where customers encounter recommendations on your site is key. Otherwise, recommendations can quickly go from helpful to annoying. To help you get the timing right, it can be useful to think about recommendations in terms of the eCommerce sales/conversion funnel. The eCommerce funnel typically consists of five steps: 1) entering the home page, 2) viewing a product page, 3) adding product to cart, 4) going to checkout, and 5) completing the purchase. Where the customer is in the funnel can help you determine what recommendation should be displayed at that time. The funnel model gives you a point of reference to understand consumers’ general frame of mind and intent when they are on certain pages of your site. Also, you can provide more personalized recommendations as they progress though the funnel and you learn more information about them.
For example, when a consumer lands on your home page you know they’re at least generally interested in your brand. When they click to a product page, you know what they’re interested in and may glean some demographic information (e.g., probably a woman, athletic). When they add to cart, this high-intent-to-buy indicator gives you some strong signals about specific products to recommend. When they’re in checkout, you don’t want to interrupt the flow, but customers may be in the mood for impulse buys they can quickly click to add.
Each stage within the funnel is an opportunity to guide the customer and make smart recommendations to increase conversions and ultimately AOV. Some examples of when and what you may want to consider:
- Home page: Display top sellers or “buy it again” recommendations for returning customers
- Customer Portal: Recommend one-time add-ons or ways to upgrade to a bundle to save or get more value for subscription customers
- Product page: Cross-sell complementary products (“frequently bought together”), or ways of bundling products to save
- Add to cart: Upsell recommendations (“customers also bought”)
- Checkout: Cross-sell low-cost, high-margin impulse products
- Thank-you page: Cross-sell complementary products or offer a second unit at a reduced price
Tip #3: Present the right offer
Whether you’re upselling or cross-selling, to get customers to spend more, they have to see the value. Think beyond the actual product and about relevance and what value you’re offering with an upsell or cross-sell, such as convenience, better price per unit or additional features. Also, consider price-point. For upsells, if there’s too much of a price jump, the customer may not spend more. Instead, can you offer an “upgrade,” subscription or “additional services?” For cross-selling, analyze your data to understand which products customers typically buy together. Should you offer product bundling? Alternatively, integrate a personalization app, such as Rebuy, that automates recommendations based on customer purchase history.
Tip #4: Review the logic and rules
If you use a personalization app to automate recommendations but also have added some custom rules, it’s a good practice to check that the rules are set up correctly and customers are seeing the right recommendations on the right page. If it’s not working correctly, the problem may be that your rules are too complex. To determine if this is the case, you may want to test your rules versus full automation (no added rules) and track conversions. In addition to testing effectiveness, letting the recommendation tool do its thing using historical data may reveal previously unknown business insights, such as customers purchasing certain products together. If you’re considering implementing a personalization app, first try it out of the box to give you baseline performance data. Then if needed, you can add rules to fine-tune the results.
Tips #5: Consider content and brand voice
You create amazing customer experiences with top-notch UX functionality (e.g., it was easy to check out) but also with content. The way in which you communicate with customers is as important as what you’re communicating. True for email campaigns, product page information, blogs, photography… and also in the way you present recommendations. Time to check: what’s your current call to action (CTA)? Does it fit with your brand voice? For example, instead of the usual “also recommended” cross-sell language, maybe it’s more in keeping with your brand voice to say, “add a little more love,” or “make it extra special.” Try customizing and testing different CTAs to see if you can increase conversions.
Tip #6: Continue the cross-sell into post-purchase
The eCommerce customer experience really doesn’t end until the package arrives at the customer’s door. While they’re still immersed, experiment with leveraging cross-sells post-purchase in the thank you/order confirmation email. These are emails customers open most often – it’s estimated they have about a 60% open rate! There’s a huge opportunity to showcase personalized recommendations here, maybe even enabling the customer to add additional products to the order before it ships. Going further, set up your email flow to ping customers X days/weeks after purchase with a personalized offer and recommendations to repurchase and buy complementary products to entice them back. If you integrate personalized recommendations with lifestyle content (e.g., how-to information, customer stories, user-generated content (UGC), etc.) you’ll also be building customer lifetime value (LTV) – an added bonus.
Start increasing AOV and revenue now
You can’t afford not to optimize upselling and cross-selling on your eCommerce site. eCommerce is only becoming more and more competitive and brands need all the edge they can get. As a point of reference, Rebuy reports that many clients have seen an 8-17% boost in eCommerce sales and an increase in AOV between 5% and 20% after implementing the recommendation app. With the right approach and execution, upselling and cross-selling can be powerful tactics to significantly impact your bottom line. Have questions or can’t figure out why upsells and cross-sells on your eCommerce site aren’t doing more heavy lifting? Contact us, we’re happy to collaborate.