Upselling and Cross-selling on Your Ecommerce Site

03/01/2022 | Share:

Upselling and cross-selling on your ecommerce website are undoubtedly the best strategies for increasing sales, and ultimately profits. These methods are used by all the major brands worldwide. Although consumers are becoming wiser to some of the more under-hand selling techniques, they’re still valuable for today’s ecommerce owners to implement.

This feature will look at upselling and cross-selling, how to use them for your ecommerce store, their benefits, and which strategy is the most appropriate for you.

What is Upselling?

Upselling is likely why you own a 54-in TV rather than the 48-in one you intended to buy. It’s probably due to upselling that you have comprehensive subscriptions that you really don’t need. And, upselling is possibly the reason you’re using super-fast broadband internet over a standard internet package.

In short, upselling is where a customer is persuaded or encouraged to buy an upgraded and more expensive product or service, resulting in higher profits for the business.

In-person, upselling is often seen as a pushy sales tactic. However, online upselling can be done in a much more subtle way. Moreover, ecommerce owners are able to use data to their advantage to see what products, or services, are the most relevant to individual customers.

For example, suppose you stock clothing and have a regular cardigan-buying consumer. In this case, you could alert this consumer to a more expensive cardigan that’s just hit your shelves; ‘here’s something you may be interested in.’ This isn’t likely to be successful in-store, but online is a different ball game.

What is Cross-selling?

Cross-selling is a strategy to sell products or services to a consumer that are directly related to something they’re already buying or have recently purchased. In some cases, products or services can belong to different categories. Still, they will be complementary—for example, a pair of tights to match a skirt or batteries to operate a toy.

Major international brands use cross-selling as a battle-ready strategy, and they make no bones about it. The head of the U.S McDonalds’ division, Jeff Stratton, stated that their apple pie sales would be cut by half if they weren’t stocked in full view of customers. Hungry people already buying food are more inclined to add a dessert to their order if the temptation is right there.

Cross-selling isn’t an upgraded purchase but an additional one, and it can work exceptionally well in all kinds of ecommerce shops.

How to Use Upselling and Cross-Selling for your Ecommerce Store

You can use both sales methods within your ecommerce store; either/or, or both simultaneously. Here are a couple of examples:

Upselling

Upselling to customers in visiting your ecommerce store can be done in a number of ways. You could offer add-ons to the product being purchased, such as two products resulting in a 10% discount. Alternatively, you could offer a gift-wrapping service for a small additional fee.

Upselling through ecommerce is basically encouraging customers to buy something they didn’t know they needed until it was offered. Ultimately, it is about increasing their order value, but in a subtle way.

Cross-Selling

One of the biggest online retailers to cross-sell regularly is Amazon. With most Amazon purchases, you will see an option to add additional items to your basket, sometimes having to even untick these items before going to the checkout.

Cross-selling can come across as an offer of convenience for customers. For example, a friendly message of ‘did you forget something?’ with the option to add placemats to a crockery set is likely to pique the customers’ interest, often resulting in them thinking ‘what a good idea!’.

Benefits to Upselling and Cross-selling

There are benefits to upselling and cross-selling for both the retailer and the customer. The retailer profits more, and the customer walks away with more than they bargained for.

As a strategy, these methods should be used to ‘help customers win.’ An ecommerce owner can implement upselling and cross-selling with the appearance of wanting to meet the needs of the customer and helping them to be more informed about options.

For example, if a customer is looking at an i5 processor, making them aware of the advantages an i7 processor could give them would be an upsell that makes this customer aware of what they could get for their money.

By reminding a customer that their new wall-clock needs batteries as an add-on purchase is cross-selling that ensures the clock will work immediately.

What about the benefits to an ecommerce owner? It boils down to two main advantages:

Customer Retention

Upselling and cross-selling can increase revenues by over 40%, thereby improving customer retention. Customers buy products or services to solve a problem, this problem they’ll be aware of, but they may not know the best solution until it is shown to them.

These sales techniques can make a customer think that they receive great convenience and an overall good experience when buying from your store. This is a sure way to ensure that that customer returns.

Increase Order Value

Upselling and cross-selling increase the average order value at a considerably low incremental cost to ecommerce owners. A recent marketing study discovered that the probability of selling to an existing customer is up to 70%. The likelihood of selling to a brand-new customer is up to 20%.

Upselling to existing customers is an efficient way to boost the order value and the lifetime value of that customer.

Which Method is Best for you?

The only way to know whether upselling, cross-selling, or both methods would be best for you is through trial and error. It would be wise to constantly monitor and review how each technique works so that you can make adjustments when needed.

Summary Tips:

It is essential to remain realistic with your upsells and cross-sells. Going overboard with these tactics could result in a loss of custom, which is the opposite of what you want! Remember, people don’t like pushy sales, on or offline.

For example, if someone wants to buy a £15 pair of shoes, it is acceptable to offer a pair at £20-30 as an upsell or a pair of socks as a cross-sell. However, pitching a £100 pair of shoes isn’t realistic for this customer as the price difference is too substantial.

Similarly, offering shaving cream to go with a disposable razor could be a profitable cross-sell, but trying to upsell a £200 electric shaver will likely result in an annoyed customer – and no business owner wants that!