How to boost your sales with upselling and cross-selling
There are two things every company wants: more customers and more revenue.
For most, getting more customers is equal to getting more revenue. But what if I told you there’s a simpler, cheaper and more effective method of increasing your sales?
Experts agree that one of the best ways to increase revenue is to focus on your existing customers base. According to Marketing Metric, companies have 5-20% chance of selling to a new customer, but the possibility of selling a product to an existing customer is 60-70%!
That’s why product recommendations are an essential sales tactic – they can drive between 10-30% of your revenue!
The problem is that customers are much smarter now and they won’t agree to just any “You might also like…” offer.
If you’ll try to sell them items they don’t need, things not related to the item they picked or items too expensive for them, they won’t even go with the main purchase, and you are losing a client.
You have to be smarter and convince them that additional product will benefit them. And for this, upselling and cross-selling techniques come in handy!
If you don’t know what upselling or cross-selling is, worry not – here’s an explanation. While both are used to boost sales, they work slightly differently, so it’s important to know when then both of them used.
What is upselling?
It is persuading a customer to buy an upgrade or add-on to a currently chosen product or to select a more expensive product than the one customer wants initially.
You probably see this every day, but you didn’t think of it as upselling: if you go to the pizzeria and order a pizza, you are asked about extra cheese, any additional toppings or a fizzy drink right?
That’s upselling! When you go to a fast food brand and asked “Do you want fries with that?”, that’s upselling!
Longer guarantee for your mobile phone? That’s upselling! Any time you are offered to “upgrade” the item or service you are currently buying, that’s upselling.
What is cross-selling?
It’s offering an additional item to a customer who already bought something. The important thing here, the other item must match with what customer bought earlier.
If you bought a laptop, you get offered to buy a new mouse or keyboard. If you purchased a mobile phone, maybe you would be interested in buying a phone case?
It’s very often used on e-commerce stores websites when depending on the item you purchased or watched, you get additional items to show as “You might be interested in.”
The crucial point here is making your customer feel like they benefited from the upsell or cross-sell – that even though they spent more than planned, they also got something more valuable than expected.
If you are insisting on offering them products that are much more expensive than they wanted or on giving them several additional products just to make end amount higher, you are doing it wrong.
When used correctly, upselling and cross-selling is beneficial both for the sellers (they sell more to the same customer) and the customer since they get a higher quality product or get the additional products they would need anyway in one place, saving their time.
If they see you offer them products they are interested in, and the suggestions you give them are relevant to their needs, they are more likely to return to your shop in the future (as opposed to when you throw several different products at them without bothering for their needs, you just want to make an additional sale).
That sounds complicated…
How can I start?
Don’t worry – using upsell and cross-sell strategies is much easier than it sounds. To help you get started, here are ten tips on how to use cross-sell and upsell tactics to their full potential!
Know your options
Upselling strategy can come in several flavors, depending on the product: product upgrade (to bigger, stronger, faster, better – and more expensive of course), product protection (extending your product warranty from 2 to 5 years or getting an additional warrant, for example for a screen replacement in your new phone), product customization (adding personalisation your product increase the price) or a special deal when choosing an extended contract (for example by picking a gym carnet for 6 months instead of one).
What option would work best for your company?
If you are selling electronics, offering your customer, a stronger version of the product they picked or an extended warranty is a good choice.
If you are selling software that requires a license, your customers might be interested in a longer version of the license.
Make the upsell and cross-sell options visible on your page
If your customers don’t know about the possible options, how can they use them?
If they don’t see you are offering additional product protection or a bundle option because they are at the very bottom at the page, your strategies won’t be very useful.
So show your upsell and cross-sell offers in places your customer will see it – on your product page (where you can display multiple versions of the product) or when customers view their product cart.
It’s also a great idea to have a special triggered email sent after the customers placed his order but before the shipping order – maybe they forgot about getting batteries for the toy they bought or ink for their fountain pen?
n’t be a pushy salesperson
How do you feel when a salesperson call you to give you their newest great offer and can’t take “I’m not interested” for an answer?
Customers react to wrong “You might be interested in”suggestions in the same way. If you show your customers the wrong product at the wrong time, they might not buy anything at all. If you show them a product not relevant to their needs (they want a budget smartphone, and you show them the latest model) or a product they don’t need, they will walk out.
Same thing if you show them several different offers in a row, show the additional offer seconds after the customer visits the website (and doesn’t even know do he wants to buy anything) or ask them several times about the offer – no one likes a pushy salesperson.
It’s a better idea to show the options when people visit a product page, look at their shopping cart or confirmed their order – as long as they choices make sense.
Make your suggestions relevant
Relevance is the key when trying to upsell or cross-sell your customers. If someone’s looking at Ipads, showing him an android tablet won’t work but offering another, stronger version of Ipad might.
A customer might buy a camera case or a tripod when they already picked a camera but not the other way round!
To get the upsell and cross-sell working, your customer must think you are trying to help him get the best out of the product they bought or prevent future troubles.
If a customer buys a new fancy smartphone, the last thing he wants is to get it damaged – that’s why there’s a high chance he will be interested in getting a tempered glass, a case or an extended warranty.
It can also work quite nicely with books or CD’s – showing your customer another book by the same author as the one he is looking at might convince him to buy both.
Personalize your suggestions
Upsell and cross-sell recommendations work best if they’re tailored to a specific customer.
You surely have plenty of information on your customers – not only their name and address but also what did they order previously, what are they interested in and do they have any their favorite products.
Why not use this data to your advantage?
According to Segment’s research, 49% of customers say they have bought a product after getting a personalized recommendation (even if they didn’t plan to buy it earlier) and 40% of customers purchased something more expensive than they originally planned just because they liked the recommendation they received.
Using customer’s name when giving him product suggestions is a good start but even better if you can use your sales history to get them interested in additional products – for example by giving them a special offer on coffee caps for their new coffee machine or informing them of a new version of the software they are using.
Offer Free Shipping
60% of e-commerce stores say free shipping is one of their most successful marketing tools.
No wonder, customers love free shipping options and often spend more money to be eligible for it. So, how does this work with upsells and cross-sells? By setting a minimum order value to be qualified for free shipping.
If you offer your customers free shipping when they spent for example 30$, they are far more likely to spend more money on their order just to qualify. And if they ready to spend more, they are also ready to pick a more expensive product or additional products for their order!
Limit the options offered
If you think you can give your customers a dozen options because “the more options, the bigger the chance a customer will pick something,” you couldn’t be more wrong.
Who has time to browse several pages of potential upsell options?
Especially if neither of the suggestions makes sense to the customer and look just like you trying to sell them things they don’t need.
Don’t throw everything you have at the store at the customers. Show them only a couple of products that fit their criteria the most and the products the customer is most likely to be interested in.
Want to sell more items while making sure your customers will be grateful to you they can get all the items they need at once?
Think about offering bundles – putting items together in a set is a fantastic way to sell more products while keeping your customers happy.
If a customer buys a new mobile phone, he will probably look for a matching case, screen protector and earphones set – wouldn’t it be convenient for him if instead of searching for all those items separately, he could buy them in one set?
Or if he buys a new fountain pen, he definitely will need ink cartridges – why not offer them together?
What’s also important, the bundle option tends to cost less than if a customer had to buy those items separately (especially if he were to get those items from different sellers!) so it’s a perfect way to persuade a penny-wise customer into getting the set.
Keep the end price in mind
You should never try to upsell or cross-sell a product that costs more than 20-25% of the item picked by the customer.
If a customer wants a gym carnet for two months, trying to sell them a whole year carnet might end in the customer leaving the gym. If a customer wants to buy a budget smartphone, showing him the latest phone model that is twice as expensive will make your customer think you want to scam him.
Same with cross-selling – if the additional item is nearly as expensive as the product picked by the customer, he might walk out on you, annoyed you tried to rip him off.
Think about using
On some customers, neither cross-selling or upselling will work. They are on a tight budget and need a product that is within their range. You tried to persuade them into getting a more expensive product, but they are firmly against it.
Insisting on them getting a more expensive product might end in you losing the client (who likes it when a salesperson tries to get them to buy a costly item after they cleared stated they can’t afford it?) and the sales.
So how about offering your customer a product that’s affordable for them while keeping most of the features they need?
This technique is called downselling – giving a customer a cheaper product than initially suggested, which has higher chances of being accepted. If the recommended computer is too expensive, showing him a version with fewer features (and lower price) might get you the sale – lower than what you expected, but it’s still a sale.
Offering your customers discount coupon when they abandoned their shopping basket also counts as down selling – you do earn less than you expected from the sale but at the end of the day, you did get the sale.
Those are ten best practices when it comes to upsell and cross-sell.
I mentioned only ten, but there are plenty more, every single online store has its own set of “best practices.”
If you listen to your customers’ questions and needs, you will surely find the ones that work best for your business too.
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