Cross-Selling and Upselling: The Marketing Combo You Need to Know

“Would you like fries with that?” The existence of this very question for decades proves that shoppers are not at all that stiff with expenditures for added value. The fact of the matter is that a decisive customer is a rare phenomenon in the real world and much more so in e-commerce. A study conducted on customer behaviours reveals that shoppers are more vulnerable in cashless purchasing transactions. With online payment as a major factor, once a customer is set for an item purchase, the seller bears the biggest opportunity of maximizing sales.

To make the most out of this trend, cross selling and upselling techniques, when used properly, may work as a charm for both your Magento store and your customers. You may have heard of these strategies. A basic knowledge of this marketing combo can do much mutual benefit for your company, your customers, and of course, your ROI.

What are cross selling and upselling and how do they differ?

Both are e-commerce techniques which aims on improving the quality of your conversions. Again, they do not only aim to increase your number of conversions- they basically boost your revenue by optimizing every conversion. Pretty much like offering fries to go with your burger in McDonalds, cross selling is when you offer a different item that may be related to the items in your customer’s cart. On the other hand, the crew asks if you want to supersize your order, that’s up selling. Up selling gets in the picture when you offer to sell a more expensive item, with better features, in exchange of your customer’s original choice. As you see, this combo technique is not a newcomer in the business field. But how can you incorporate them into your ecommerce website without crossing the fine line between suggestion and aggression?

Upsell vs. Cross Sell

Why use cross selling and upselling?

So this is an already established fact that cross selling and upselling does wonders for your revenue. But the benefits go further than this. Marketing Metrics reveals that is the probability of selling to an existing customer is 60 -- 70%, aeons in contrast to the 5 -- 20% probability of selling to a new prospect. Promoting other products to your customers paves the way to an open and healthy customer-seller interaction. This makes cross selling and upselling strategies a healthy customer service practice. Lastly, it exposes more items from your Magento store and encourages your customers to check on other products on their next visit.

So to sum all the benefits up here are a few:

  • Cross selling and Upselling increases sales and margin
  • It promotes healthy customer service
  • It exposes more items in your Magento store
  • It rises overall customer satisfaction

When is the right time to cross sell and upsell?

You can cross sell and upsell before, during, and after purchase. Basically just anytime. As soon as your visitor adds his first item on his cart, you can start interacting your way to maximum conversion. Things may come off a little tricky in the beginning but as soon as you get the hang of the strategy, it’s not really as daunting as it appear. All you need is concrete foundation of your product and customer knowledge.

Before purchase
As your visitor gets in your site and checks on specific items, a range of suggested items may be displayed on the less prominent but still visible sidebars.

During purchase
As your customer proceeds to checkout process, you could offer an array of related and possibly discounted items (cross selling). Also, you may choose to promote another item with better feature for a slightly higher but reasonable price (upselling).

After purchase
Now that you have a better insight of your customer’ choices, follow-up emails of advertisement about related and useful items engages your customer for another visit and follow-up purchase. (cross selling)

Related Products Highlight in UB MegaMall theme

Related Products Highlight in UB MegaMall theme

How to cross sell and upsell:

This highly effective marketing strategy revolves around the core of customer service. And a good businessman knows the essence of keeping the client’s needs a priority.

Tip 1: Offer an array of selections moderately: do not overwhelm your customer.

Do not be afraid of offering products that may benefit your customers during sales. For instance, if your customer checks out a smartphone, offer a screen protector and phone case as well. However, clouding your customer with one to many ideas and suggestions may not only be suffocating on his part but also gives off the idea that you are more focused on product promotion than catering for their needs. So while you do well in being quick with other offers, take it easy on your product promotions.
Caution:

A good management of cross selling and upselling, like any other strategies, does not only yield conversions but also helps you gain regular customers. When you start gaining loyal customers, however, it could get tempting to upsell random, entirely unhelpful and unnecessary items for the sake of conversions. Resist the temptation as this ruins the image of your Magento store.

Tip 2: Do not hesitate to promote more expensive items.

As always, this comes with a caveat: overdoing your promotion on more expensive items may stir a negative impression. However, this should not stop you from promoting items of higher value just as long as it is done properly. Not all customers stick to a certain price range. Other factors such as product brand, good customer reviews, discounts, and added service value such as product warranty or shipping services come off as strong factors for your customer’s purchasing decisions. The point is: when you suggest for an upsell or cross sell, present it in such a way that you are interested of your customer’s satisfaction – not your sale.

Caution:

Another factor you need to watch out is the danger of offering added services, incentives and discounts just to invite your customer to take your promotions. Never get lost in keeping track the cost of these incentives versus your potential profit. Offer only what you can afford. It would be ridiculous to host marketing promotions until your customer reaches a certain amount of repurchase only for him to find out that your business went bankrupt from overhead expenses! Again, never your risk company profit for immediate conversions.

Tip 3: Display items according to relevance.

There is no better approach on cross selling and upselling than presenting the most relevant product. The relevance may come from 3 categories for you to begin with:

  • Items other customers who bought the same item also bought.
  • An updated model of your customer’s choice.
  • Currently discounted items related to your customer’s product.

Caution:

Since this method focuses on retaining customers rather than scouting for new ones, good customer relationship is essential. Never risk a returning customer by pushing too far and deep with your promotions. Building your cross selling and upselling strategy on firmly grounded rules such as never insisting the promotion of your supplementary products when your customer refuses. This will anchor your brand on a solid foundation. Always go back to the first cross sell, upsell tip: never overwhelm you customers.

Tip 4: Do not suggest items that increase customer’s total bill by more than 25%

Cross selling and upselling strategies are designed to maximize your conversions -- not multiply them. While we do not hesitate on promoting relevant items of higher price value, it is not advisable to offer another top of the line products just to qualify them for a discount. Another way of overwhelming your customer is by offering too many product suggestions thus inflating their total bill. For example, when your customer checks out a laptop at $2,000, offering a laptop bag at $150 could be a reasonable deal. However, promoting your $800 tablet which will result to a total of $2,950 on overall bill is just overwhelming. Sure, he might need other gadgets to sync files with but the price inflation of almost 50% could sink his interest down the drain faster! Furthermore, a person who would invest on a laptop most likely owns a handy tablet or a smartphone. Hence, rule of the thumb, never inflate your customer’s overall payment by more than 25%.

Tip 5: Promote a sense of urgency

It doesn’t take a well-versed entrepreneur to understand one of the most fundamental rule of economics: as the supply decreases, the demand increase. Create an opportunity to boost your customers demands by wisely limiting your supply. Offering discounts within a reasonably limited time or adding “until supplies last” almost often works. It ignites a sense of urgency in your clients and will make them want to grab your deal before it’s too late.

Caution:

There is a fine line between making elusive offers and pushy promotions. Maintain realistically limited deals by avoiding playing hard-to-get. Overdoing this approach by sending e-mails with “offer is available within the next 5 minutes and it’s gone!” is definitely not a way to court your customers for added conversions. While you establish your intolerance on procrastinated responses, avoid pressuring your customers into making rash decisions.

Conclusion:

A good timing on cross selling and upselling methods will yield loyal customers thus bearing a significant impact on your sales and profit increase. Most importantly, if your believe that your cross selling and upselling promotions focus on their satisfaction, they will not hesitate to spread the word. For now, carefully establish your cross selling and upselling strategy and be surprised to know that most of your customers would actually like fries with that!

Written By

Head of UberTheme Team

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