Upselling and cross-selling have one main goal: more sales. In this article, you’ll learn how to convince your customers to add additional products to their shopping carts (and to buy them!).
Two of the best-known examples of this sales tactic are “Do you still want fries with that burger?” or even the little sweets at the supermarket checkout.
But you can also use up-selling and cross-selling lucratively in your online stores.
According to one study, about 10–40% of e-commerce sales are attributable to additional product suggestions.
In this post, you will learn why upsells and cross-sells are so important and how to use these sales tactics properly.
But to know how to effectively increase your sales per customer or client, you should know the difference between upselling and cross-selling.
Upselling is the tactic of suggesting to your clientele the more expensive (better, newer, etc.) product in the same category.
Relatively, upgrades if the product allows it, such as more power for the new laptop.
Many airlines offer the option of more legroom when purchasing an airline ticket.
U.S. airline JetBlue made about $190 million in additional revenue in 2014 with its Even More Space option.
Many customers would spend more money on a better or additional product if it gave them an advantage.
Conversely, this means that if you don’t offer your clientele an upsell option, you won’t generate the maximum revenue.
However, make sure that the upsell product fits the needs of your customers.
So if your customers put a cheap 400€ TV in their cart, it makes much more sense to offer a TV that is a bit bigger/more modern, but only costs 50€ more.
Offering a 4k curved TV for 1500€ would be an inappropriate upsell offer, as customers are more interested in a cheaper model.
As a rough guide, the upsell product can be up to 30% more expensive than the one the customer first chose without scaring them away.
Cross-selling is a sales technique in which you propose to your clientele an additional product that matches the one they have already chosen.
If a customer adds a new digital camera to her digital shopping cart, you could offer add-on batteries during the check-out process.
If a TV is added to the cart, you could offer an HDMI cable.
Your customer wants to buy flower pots? Then he or she is definitely interested in potting soil as well.
Do you sell automatic coffee machines in your store? Suggest your clientele also directly coffee beans or the matching descaler.
Amazon states that 35% of sales are due to cross-selling, the industry average is about 10%.
Items are often bought together or customers* interested in this product also bought…. So adding cross-selling to your store helps your customers store better and at the same time has the potential to increase your sales.
To make sure cross-selling really gives you an increase in sales, you should think about which products go really well together, like waffles and hot cherries.
Unfortunately, not every product is suitable.
Unlike cross-selling tactics, where there is almost always an opportunity to sell more, not every product is suitable for an upsell.
That’s why the rule is that you tend to offer only your most popular and best-selling products (lots of customer reviews) for upsell.
Products that are already popular and relevant with other customers have greater upsell potential.
Cross-selling and upselling work particularly well with existing customers.
According to a study by Marketing Metrics, the likelihood of selling to someone who is already part of your customer base is 60–70%.
In contrast, the probability of convincing new customers of your goods is 5–20%.
Example: Bought a laptop, but not a new printer? Use this opportunity to help your clientele and make more sales in the process.
1st tip: Show a selection, but don’t overdo it.
Offering too many choices will only confuse your potential clientele.
Keep in mind that it is better to show a smaller, but more relevant, number of products.
2nd tip: Speaking of relevant…
Display only products that fit together and also support your customer’s purchase intention.
Offering the latest SLR camera to customers who are looking for a cheap camera would be wasted potential.
Additional batteries or a small camera bag would be a better choice.
3rd tip: Make it palatable for your customers to spend more money…
For example by offering suitable products directly as a bundle, with a small discount.
Offering a camera directly with a case, extra battery and memory card makes sense for the buyers, because they might buy this product anyway.
Tip 4: “Our customers do not buy more expensive products” is nonsense.
Although the price of a product is an important factor in the decision to buy, the idea that “our customers don’t buy more expensive products” often remains.
However, this is a myth.
More important decision factors are special offers, possible coupons, shipping costs, customer and product reviews.
Which means that your customers tend to be willing to pay more if the upsell product is a perfect match.
Tip 5: Show why the upsell or cross-sell makes sense.
This can be done either by a rational or emotional reason:
Emotional: “You can take great pictures for longer with this extra battery”
Rational: “If you add this memory card, shipping is free”.
Combine emotional and logical reasons in your sales process, test which works better and achieve a higher order probability.
Implementing upselling and cross-selling as sales tactics in your own store can be quite lucrative.