Why upselling and cross-selling is important
As a company you’re probably (hopefully) selling a product or service in order to make money to cover your costs and potentially make a profit. So how do you increase the amount that each customer spends to increase the revenue per sale? Amazon reported that cross-selling is responsible for more than 1/3 of its sales. So if one of the biggest ecommerce companies in the world relies on good cross-selling for revenue then why shouldn’t you? But apparently upselling is almost 20 times more effective than cross-selling, so you should definitely be doing that too! As a small company (well smaller than Amazon), why should you upsell and cross-sell effectively to increase your revenue?
Starting with the definition and differences between them is probably a good place to start. Upselling is selling someone a more expensive (higher value) product than the one they were attempting to or interested in purchasing in the first place. For example’s sake, if you went to McDonalds and tried to order a plain hamburger, they would try to sell you a Big Mac. It’s a more expensive version, but also higher value as it has more included. Cross-selling is selling someone something that is related to their original purchase. Again, if you tried to order a burger at McDonalds, the server would ask if you’d like fries or a drink with that. So first you need to think about what upselling or cross-selling means for your specific business.
Upselling and cross-selling can also improve the customer experience. By working out which products would offer the customer higher value such as responsive website design, a faster computer, a larger hard drive, you are effectively over-exceeding the customer’s initial demand. And by offering them complimentary products or services such as batteries for the remote control they’re purchasing, a laptop sleeve or next day delivery you are able to second guess problems or concerns they might have before they occur. Whilst this may be beneficial for your company’s margins, they’re also beneficial for customer satisfaction and potentially customer retention.
There are a number of techniques that can be used for upselling and cross-selling, through your online store, customer service communication and email marketing. On product pages, include a small section on suggested items or higher value versions of the product (Amazon does this very well; blu-ray, kindle version, hardback etc.), when someone adds something to their shopping cart you can have a pop-up suggestion, when someone heads to the checkout you can suggest items or ask if they’ve finished shopping, and you can email them with their confirmation. The most opened email is apparently the sales receipt, so if you use this email cleverly, you may be able to use cross-selling effectively with the “you might also need…”, and include with this some sort of special offer.
If you want to find ways to increase upselling and cross-selling opportunities through your website or email marketing campaigns and need help setting them up then we can help. Drop us a message today and we can chat through your aims and work out some strategies to reach them: email@example.com