If you have even a slight knowledge about Ecommerce sites, then you must have heard about Upselling and cross-selling. Both the terms identify the tactics that need to be followed to make the customers acquainted with some better or complementary products suggestions as per the current selection. Basically, these strategies have been followed religiously by offline retailers since decades. They know how to offer something that compliments the product that the customer is buying. As a whole this is quite a successful strategy for both the sellers as well as the buyers. As per a Forrester research analyst, product recommendations like upsells and cross-sells increase the ecommerce revenues by 10-30%.
Difference between Upselling and Cross-Selling
Most of the people are either alien to what exactly Upselling and cross-selling mean or often interchange the two terms. However, there is a great difference between the two terms. Let us get in to the details and make things a little more clear. To make it easy understand the two terms, we will start with an example. Let us consider that a visitor is planning to purchase a 15” mid-range laptop.
Upsell: Once the laptop is selected, the customer is simultaneously offered with options for upgrading the processor. This is when the merchant is using upselling to sell the customer a more powerful and expensive computer. Basically, the merchant is making the customer to buy something better and spend more.
Cross-Sell: Once the final product selection is done, the next task would be offering the customer with some products that would complement the current product selection. The merchant offers options such as printer or speakers that the customer might need in coming time. This way the customer might make his or her mind to purchase the suggested product.
Importance of Upselling and Cross-Selling
When executed thoughtfully, both upselling and cross-selling techniques can help the businesses in boosting the revenues while increasing the sales. E-commerce stores can benefit while selling more products to same customer. The biggest benefit is however the fact that this strategy helps in enhancing the customer experience.
Through, upselling and cross-selling you are actually offering the customer with the opportunity to ensure that the customer selects the right product and has managed to buy everything that he or she might require in coming future. For instance, for all those products that use batteries to run, a perfect cross-sell item would be batteries. This will increase the cart value and will also add to the convenience of the customer.
What to focus upon: Upselling or Cross-Selling?
The main concern for most of the merchants is what to rely upon. They actually find themselves struggling with the fact that what should they focus upon out of the two strategies. Nobody wants to make things look stuffy and overloaded for the visitors and customers. So, the type of recommendations should be limited yet targeting. Here are the two doubts that you might come across. Should you upsell to display more expensive yet similar products or should you cross-sell complimentary items?
As per the research conducted by Predictive Intent, it has been seen that upselling performs 20 times more efficiently than cross-selling. The graphical illustrations shows that upselling helps in increasing the total online sales by 4% while cross-selling tactics drive the sales only by 0.2%.
What to Upsell and Cross-Sell?
Before you choose the products that you want to upsell and cross-sell, your main concern should be focusing upon products that are relevant to the customer. Some merchants forget this, because of the race going on to get more revenue and increase the sales. Your main focus should be over selling products through the best strategy and focus more upon customer experience.
Suggest products that you believe actually make sense and seem related to the product that the customer has searched for. Showing products that are not justifying the current product selection will lead to poor click through rate and will fail to increase the revenue. Other than product relevance, there are two other factors that you will need to consider when promoting upsells and cross-sell.
Value: When it comes to selecting the upsell and cross sell products, you will need to make sure that the product you are displaying does not exceed the overall cart value by more than 25 per cent.
Familiarity: Make sure you are displaying products from familiar brands. Showing products that come from unfamiliar brands is going to confuse them. More familiar is the brand, better are the chances for product sale.
As a final tip, keep in mind the fact that you should never upsell and cross-sell products to your customers excessively. Be careful while making the selection. Showing your customers with products page after page is going to tarnish the customer’s perception about the brand.