Sell more with smart strategies: upselling and cross-selling

How can upselling benefit your business?

Upselling is a sales technique that encourages customers to purchase additional or more expensive versions of a product. Upselling products often involves suggesting add-ons, larger sizes of a product or products with higher specifications.

Upselling can be beneficial for the customer experience. For example: encouraging a customer to purchase a larger product could help them to save money in the long term, which can improve their trust in your brand. 

Upselling is often combined with cross-selling techniques. Cross- selling involves suggesting related or complementary products to your customer based on items they’re viewing or have previously purchased. Combining these two methods can contribute to increasing sales and average order value. 

Despite these advantages, it’s important to keep the customer experience at the forefront when implementing upselling tactics. Poorly executed upselling can make the customer feel pressured to spend more, or overwhelmed by too many options, which can cause them to lose trust in your brand. 

Providing incentives and the propensity model

Presenting your customer with other product options will not guarantee that they will buy them. Using incentives can increase the success of your upselling tactics.

Incentives could include offering bundle deals, discounts for higher- priced products, or offering free shipping over a certain threshold. Incentivising upselling can increase the likelihood of a sale and higher average order value (AOV). It can also make the customer feel as though they’re getting the best possible deal on their purchase. In turn, this can lead to customer loyalty and boost your conversion rate.

The propensity model is used to predict the purchasing behaviour of a customer in the future. This model is based on information about products a customer has previously bought. This data can be analysed to determine which products may appeal to that customer next.

This predictive model can be used to support upselling tactics, as it allows you to present and upsell more relevant products to that customer. The propensity model determines a score to predict the probability that a customer will purchase a certain product or perform a certain action.

Using this information effectively can allow for a better understanding of your customer’s behaviours and allow you to improve your business’s methods of upselling. 

How can cross-selling benefit your business?

Cross-selling is a common sales technique used by online retailers to increase revenue from existing customers. It involves encouraging a customer to make a purchase on top of a primary item, which usually complements the shopper’s first choice of item in some way.

A classic example of cross-selling would be suggesting to customers that they add a pack of batteries to their basket, alongside their new electronic purchase. Adjacent to this, upselling offers customers an upgrade of the primary product. For instance, offering customers a larger size version of the same product is a common example of upselling.

These strategies help companies retain customers and increase prospects of making sales. To utilise cross-selling and upselling strategies, data on existing customers is crucial – from their ‘bought items’ information to their product browsing history. 

Personalised product recommendations drive revenue. Visits where a shopper clicked a recommendation comprise just 7% of all visits, but 24% of orders and 26% of revenue.

Delivery experience is key to ecommerce

When we questioned more than 1,000 adults across Ireland, two thirds (63%) of those who answered said that free returns, labels and packaging would encourage them to shop online. A similar proportion (59%) said reliable delivery was a key reason to encourage shopping online.

Respondents were also keen for same-day delivery (42%), returns collected from their house (40%) and a wider range of delivery slots (20%).

Benefits of cross-selling

Customers often cherish customer service that feels personalised to them. The cross-selling tactic can increase customer satisfaction, retention of previous customers and the average customer lifetime value. 

The main goal of cross-selling is to increase the average order value which, in turn, translates into higher revenues for your online business. Increasing average order value can encourage increased customer loyalty and allow your business to generate increased revenue from the same amount of traffic. 

Conclusion

Whether your cross-selling strategy involves showing bundle packages or individual product recommendations, it creates a greater customer experience and increases value for the customer. In the long term, this makes for more effective campaigns with higher returns.

Cross-selling is an important marketing tactic that can be used to increase the average order value by persuading existing customers to purchase ancillary products.