There are only a few ways you can increase your revenue as an ecommerce business: Increase traffic, increase conversion rate or increase order value.
The last one is probably one of the cheapest ways to increase sales in a very short amount of time and can be achieved with cross-selling offers.
What is cross-selling and upselling, and why does it matter?
Cross-selling, in an online context, is the practice of offering additional products or services to a user who have already shown some interest in a purchase.
An example that we will use throughout this article is Amazon, mainly because they are the absolute best when it comes to suggesting products you didn’t even know you needed!
These are products that are related to the initial product and would complement its use. Taking the above example, it would make sense for someone interested in buying a gaming laptop to also buy a gaming mouse or a VR set.
But it could also be an upgrade of the current product selected with an item slightly pricier:
This would be seen as an upsell and has proved to increase revenues for by an average of 10-30%
When should you cross-sell or upsell?
Now that we have seen that cross-selling and upselling is the key to increase your sales, let’s get down to the nitty gritty of it.
First it’s important to understand the psychology behind these techniques to know exactly at what point in the buyer’s decision it is relevant to offer additional products.
As you can see, these are not strategies to incentivize the user to buy in the first place but to push the basket’s value a little higher and provide extra value to the customer.
This is also why you’d see these at a later stage of the buying process, during the checkout for instance (more on that later).
This is exploiting the psychology of the “buyer’s mood” which means that once a customer has already made the decision to buy something and enter this buyer’s state, they are more likely to add an extra item for a few more pounds…
Although not exactly cross–selling, this is for example used at the checkout counter of any shops, when you’ve already bought all your food and can throw that extra chocolate bar in your basket. It is frictionless and takes advantage of your decision fatigue.
Something to keep in mind, however, is to not use this in excess to avoid creating a situation where there are too many options, causing a decision paralysis.
At what point in the journey should you use cross-sells or upsells?
So you’ve figured out at which point of your marketing funnel you could offer cross-sells or upsells to your customer: Sweet!
Now let’s see what the execution looks like with some examples.
Cross-selling on the product page
The first and most commonly used place to add a cross-sell is directly under the current product selected. That’s when you scroll down a little to see the product description and features, and you can also see other related products or simply an upgraded version.
Interestingly these could also be bundles and add to a perceived higher value. Everyone likes to think they’re getting a good deal!
This cross-sell should stay very relevant and match the user intent as much as possible since at that stage no buying decision has been fully made yet.
We don’t want to send the user on an endless quest to get the best product and wear him down too much, turning into a no-sell…
Cross-selling in the shopping cart
The next place to offer an upsell is right after a product has been added to the cart:
Usually visually similar to the first one mentioned, this cross-sell happens after the user has shown strong intent to buy.
Cross-selling before the order is placed
Finally, a last upsell can be made after some details have already been entered and we have a lot of compliance from the customer.
This is usually extra services such as faster shipping or extra guarantees:
Ultimately where to offer these extras depends on how you design your website and shopping experience.
The key thing to keep in mind is to keep them as organic and native looking as possible. The last thing we would want to do is to be too greedy and lose the initial sale.
What are the limitations of cross-selling? Cross-selling vs. smart selling
As with everything in business and online marketing, the focus should always be on providing the most value to the end user. Hence any attempt to trick or manipulate the user is not recommended and has even been proven to be harmful to sales.
You should test different ways to do these and keep a close eye on the user behaviour flow to identify if and when users drop off during the buying process and if this may be caused by an overuse of upsells turning into no-sell.
Indeed, as the Harvard Business Review has mentioned, you want to be aware that this type of offer may attract the wrong kind of customer, increase returns, and not cause an increase in total spend but a reallocation of budget to multiple products and services which will increase your cost.
Essentially, cross-selling, upselling and down-selling practices should only be a gentle nudge to help the user and over-deliver on its need, not a manipulation tactic to push consumption and hinder the relationship.