The truth is: a decided customer is a rare phenomenon in the e-commerce world. In most cases, people are sure only about their needs, and slightly know about the way they can be satisfied. There is a fine line between making proper suggestions and trying to sell more at a rate when a customer doesn't see it as an aggressive tactic.
Cross-selling and upselling techniques when used properly can be a delicate thing that works like a charm both for customers and businesses. And here's the proof: about 35% of Amazon sales could be generated by cross-sales.
Difference between cross-selling and upselling
As 'customers also viewed' and 'products with best reviews' sections population is clear to most of the people, it's essential to understand the difference between cross-selling and upselling. These two tactics have the same origin, but their difference lies in the type connections between products and how certain product parameters, such as price, features, and compatibility relate to each other.
Upselling is making a customer spend more money by offering a more expensive/feature-rich product. Often shops show a couple of options that are not necessarily more expensive but very similar to the main product.
Example: if you're selling a laptop, upselling will be offering the same laptop with metal body, or with additional 4 GB of RAM, or with +500 GB hard drive.
Cross-selling is making a customer spend more money by offering products from other categories which are somehow related.
Here are 5 typical cross-selling methods:
1. Offer additional services, for example, gift-wrapping or same-day delivery.
2. Offer related complementary products to the items that the customer already has in the cart.
3. Offer additional products based on the customers’ behavior and previous purchases.
4. Use promotions as a pretext to sell more products.
5. Educate your clients by offering e-books, related blog posts, checklists, and show the value of your products.
Example: if you're selling a laptop, you can offer a laptop bag, a mouse, or a laptop desk with a cooling fan.
Add-ons are all these extra licenses, protections, trainings, installations, and support periods, which are usually rather cheap themselves and go with more expensive items. I've seen that some marketers say this is also cross-selling, but in my opinion it's wise to separate add-ons and cross-sells.
Also, there are bundle products, when you finished with picking cross-selling items job yourselves, and customers can add several products to cart at once, often with a bundle discount.
Surely, these upselling and cross-selling techniques are used in a mix too.
Why use cross-selling and upselling techniques for Magento 2 store?
1. Cross-selling and upselling methods work great on existing customers.
According to Marketing Metrics, the probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%. Thus, you shouldn't miss an opportunity to get more from relationships that have already been established.
2. They rise regular order totals.
3. They boost conversion rates.
4. They expose more items of various types (bestsellers, outsiders, items with best reviews) to the customers.
5. They rise overall customer satisfaction.
Where should I use cross-selling and/or upselling?
Basically, there are three steps you can use cross-selling and upselling:
1. Before purchase: product/category page below the main product or in the sidebars, sometimes both.
2. During purchase: shopping cart, checkout, and abandoned cart emails. BTW, displaying cross-sells at checkout is increasing sales by 3%.
3. After purchase: follow-up emails.
Tips on using upsells and cross-sells
Show a range, but don't overload with ideas
Too many choices almost lead to confusion. Remember that when picking related products: it's better to choose less but more suitable or more related products than showing lots of options. If you still choose to show more items, use a carousel for displaying them.
Keep upsells relevant
Completely different, or radically different items can't be upsells as well. It can also refer to different brands. For example, showing a MacBook for a user who's looking through a Windows laptop is a wrong tactic. The same goes to products with a different set of features, with radically different prices. To sum it up, when setting up your upselling, remember that both of these products should satisfy a customer's need.
Allow to buy bundle products separately
Bundle products work better, if there are options to buy the items separately. Also, there must be a reason for the customer to buy the whole bundle, in 99% cases it is a discount.
Don't stick to the price only
'Customers won't buy a more expensive product' is a myth. Studies show that product cost, being an important decision making factor, is not the only one and is not only the most important one. Reviews, coupon codes and discounts, free shipping or shipping options, customer reviews, branding and other factors influence the result of shopping. In other words, if your upselling or similar products suggested an item that satisfies one's needs perfectly, it's very possible that the customer won't be hesitated by a higher price.
Display products according to relevancy
The more relevant the product suggestions are, the closer to the main product they should be displayed to.
The golden rule is: if you want your customer to choose another variant, make sure you have a value proposition for it. Why should the customer spend more money? What will he get?
Check mobile view
Check how your upsells and cross-sells look on mobile and tablets. The reality is that you have less space on the screen so you must be picky when choosing items for display. For example, L'Occitane chose not to show any suggestions on the mobile shopping cart at all:
Personalized headlines work better than general ones. For example, 'you might like' is better than 'people also view'.
Keep it short
If you're putting suggestions on checkout, make sure you're not adding a new step to the process. Use scripts, or checkboxes and radiobuttons instead. L'Occitane does it perfectly: you just click on the product, the page reloads, and it is added to cart.
When do upselling and cross-selling work?
Here's a table that explains very simple recommendations on how these methods usually work.
* When you offer an upsell, make sure it satisfies customer's needs. For example, if a customer is looking for a mask that helps problematic skin, upselling with a mask for very dry skins just won't work.
* If you add a full substitute of a product as an upsell in the cart, it may confuse the customer. He/she has chosen the product, and now there's a very similar one, the differences are not clear, so the customer may be confused.
* Customers that know exactly what they want are rare in e-commerce, but if they came for a particular product, they'll ignore upselling. Just keep it in mind while watching your analytics.
What to do with the results?
Now, you started your campaign and got some results. Here are quick tips on questions you should ask yourselves according to various types of results.
Note: I'm taking the number of purchases as an indicator, but it's possible you have other important parameters in mind, like renewal rates, repeat purchases, and so on. This is an example of how you need to think on the results.
Number of purchases: up
Question: seems that the campaign is working. Why is it? What strategies helped me to achieve this?
Number of purchases: up
Question: Has the average order total changed? Are the prices okay? Are the prices of products in connection with cross-sells and upsells okay?
Number of purchases: down
Question: Which segment of users slipped away and why? Do I do the right targeting?
Number of purchases: down
Question: Looks like the campaign is not working. Why? Do my customers need it? Does it bring value to them?
Thus, upselling and cross-selling, when finely tuned and tested properly, can have a significant sales rise.