How To Use Cross-selling And Upselling To Maximize Online Sales

By Margie Fishman on 26 October 2011 (Updated 10 November 2011) 0 comments

Online retailers, who don’t have the benefit of smiling cashiers asking if you’d like fries with that, don’t always make the most of their sales opportunities. Yet when deployed effectively, cross-selling and upselling should benefit your bottom line and offer valuable insight into user purchase patterns. For example, back in 2006, Amazon reported that cross-selling was responsible for more than a third of all sales. Expedia has pioneered bundling travel packages, while Apple unobtrusively recommends a host of products after customers add items to their baskets. Yet many small business websites continue to use unproductive add-on and upgrade tactics (if they bother with them at all), which can sabotage their marketing efforts.

Simply put, cross-selling involves promoting additional, but related, products to a customer making a purchase. Examples include recommending a memory card to someone who just bought a digital camera or a matching handbag to complement that pair of red pumps. The riskier upsell encourages customers to consider an upgraded or premium item. Why buy a 16-inch chainsaw when, for $20 more, you can snag an 18-incher plus free extension cord?

Before calling in the IT folks to retrofit your website, learn these basic cross-selling and upselling tricks.

Price Matters

Cross-selling and upselling are most successful when they communicate added value. Online business experts agree that add-on merchandise should be less expensive than the original product the customer is considering—sometimes as low as half the price. Accessories are a popular choice.

A common upselling practice is to offer discounted or free shipping above a certain purchase amount, improving the retailer’s sales volume. When looking to upsell, focus on products that retain the key features of the original product at a slightly higher price point. You wouldn’t hawk an Alfa Romeo to a Chevy buyer. Customers are interested in products demonstrating higher quality or superior options, as long as that value is clearly articulated. On the flip side, exercise tact when trying to upsell customers who are already shelling out for a premium product.

Be Brand Conscious

Focus on grouping similar brands together, particularly when upselling. Evaluate customer purchase histories, search histories, and average order value to select the most appropriate merchandise.

Subtlety Goes a Long Way

This is not the time for a hard sell. Rather, it is an opportunity to educate customers about a variety of products that might fit their needs. Take a casual, helpful approach in suggesting other merchandise, such as “customers who bought X also purchased Y,” “recommended products,” or “complete the look.” Avoid bothersome automatic opt-ins at checkout, which are often used by airlines and car rental companies peddling supplementary insurance.

Timing is Everything

The very worst thing you can do is provide so many distractions that customers wind up abandoning their carts and your site altogether. One rule of thumb is to display a maximum of three cross-sell items for each product (though you can maintain a database of double that amount to avoid out-of-stocks). Keep descriptions short and display thumbnail images to prevent information overload.

A shopping cart tool is a simple way to automate the cross-selling and upselling process. Suggest add-ons or alternatives after customers have placed their original items in their carts, but before checkout. Another option is to engage customers as they are shopping by displaying products, clearly demarcated, to the side or at the bottom of the screen. Either way, be sure to track how well buyers are responding to your sales pitch.

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