Last updated on October 8th, 2019
Would you like to value-size that meal? As consumers, we have grown accustomed to the stereotypical tactics of upselling and cross selling. You want more money…they get more something. It seems like a mutualistic relationship enough – but does it work?
The answer to this lies greatly in whether or not the upsell is done the right way. Customers should not feel they are being nickle-and-dimed to get the value they deserve. The difference between exploiting and enhancing is in the value.
Its not just about getting another dollar, its about providing value that will keep customers coming back – especially in the world of ecommerce. With the increase in competition, using ecommerce upsell tactics can make a massive impact to your bottom line (if used the right way). Here are a few ways you can enhance the customer experience in order to turn a single sale into a better or additional purchase.
Upsell vs. Cross-sell
There is often confusion between cross-selling and upselling and too often these terms are used interchangeably. But the difference is important to understand so you can use the most effective tool for your business.
Upselling is simply recommending a similar product that costs more or offers additional features. And you may have noticed, Apple tends to be champion at the up-sale.
If you select an 11in MacBook Air, Apple will most likely show you the 13in laptop for just $100 more. But the reason it works? Because the upsell does actually offer value.
Cross-selling on the other hand, offers complementary products to your existing purchase. Lets revisit the Apple example – they may send an email featuring their cases if you recently purchased a new laptop. They know if you purchased on product, you may needs it’s counterparts, which is a perfect opportunity to offer additional products.
Does it work?
Absolutely. Shopify wrote a great article that discusses the effectiveness of ecommerce upsell for your online store – “Sometimes your customers don’t know that a better product is available, or they may be convinced that a different product may be a better fit for their needs.” In fact, Forrester Research shows that product recommendations are responsible for an average of 10-30% of ecommerce site revenues.
Tools like Tagalys helps retailers to generate real-time product recommendations like Amazon, based on each visitor’s unique actions. It also offers a variety of recommendation types to suit different business requirements.
You have seen this dozens of times, probably without realizing it is a cross-sell tactic. Scroll over to Amazon and you will see cross-sales on nearly every page under terms like “Frequently Bought Together” and “You May Also Like”.
According to Sucharita Mulpuru, a Forrester analyst, Amazon’s conversion to sales of on-site recommendations could be as high as 60%.
Despite the benefits, these tactics can be misused. So we ventured to find the best practices and recommendations from top online stores on how to master ecommerce upsell and cross sell:
- Relevance – Make sure you are suggesting relevant products based on the buyer’s original selection.
- Cost – When upselling, avoid recommending a product that cost more than 25% over what the original item sells for.
- Timing – Timing is key, you don’t want to seem pushy by recommending too much upfront, but you also don’t want to miss the window of opportunity. Most top retailers suggest creating trigger-based rules to show the right message at the right time (which can be easily created in Kevy.)
- Be selective – Not every product needs to have an upsell or cross-sell suggestion. You want to avoid annoying your buyer with too many pop-ups or emails. Try limiting your upsell opportunities to approx. 30% of your products.
As always, track and analyze which ecommerce upsell and cross-sell offers are working. Feel confident to play around with the product offerings and messages to test which works best. There are many tools to utilize for automating this process. Kevy is a great way to use emails and pop-ups for product suggestions, but we also recommend taking a look at this list from our friends and partners at Shopify.