Would you like to make that a meal for an extra $5?
Why not, you need something sweet to go with the salt.
We’ve all upgraded or added on to our original purchase at the movie theater, Subway, McDonald’s, on Amazon, in the Sephora checkout line... the list goes on and on. What works about these sales is that they’re subtle, relevant, and catch you at a time when you’re about to make a purchase.
Upselling and cross-selling aren’t new phenomena, and with the rise of online shopping, we’re seeing more ecommerce merchants use these strategies (as they should).
In this post, we’ll show you how to successfully upsell and cross-sell on your online shop, explain why it’s beneficial for your bottom line, and provide some examples of effective upsell and cross-sell strategies.
Upselling and cross-selling, defined
Before we dive into the how let’s cover the basics.
Upselling is when you encourage customers to purchase a more expensive version of a product. A common upsell strategy for ecommerce brands is promoting best-sellers on checkout pages.
Supergoop shows a more expensive version of their Unseen Sunscreen after the item is added to a cart. i.e., after shoppers express intent to purchase an item.
Cross-selling is when you persuade customers to buy items related to the original purchase. An effective cross-sell strategy is to show cheaper complementary products on the checkout page.
Supergoop does a great job at cross-selling, showing you products to wear their sunscreen with before you check out.
Often done in tandem, the key to successful upsell and cross-selling is to identify products that satisfy additional, complementary needs unfulfilled by the original item, and present them to customers at the right time.
Benefits of upselling and cross-selling
Ultimately, upselling and cross-selling are about helping customers feel more satisfied with their purchases and solving customer problems. And happy customers come with some added business benefits, too.
Upselling increases revenue by an average of 10-30%. And, it’s 68% more affordable than acquiring new customers. When done well, these tactics can also increase customer retention, average order value, and lifetime value.
Effective upsell strategies
Upselling is so effective because it’s done at a time when customers are already interested in your product. When you show people relevant upgrades at the right time and place, they’re likely to go for it. Here are some effective ways to upsell:
Offer more (items) for less (money). Physician’s Choice offers 1, 3, and 5 bottles of their women’s probiotics. The more you buy, the more you save. A classic, effective way to upsell consumables.
Pro tip: show customers just how much money they save by purchasing multiple items.
Include a subscribe and save option. Another great way for ecommerce brands to upsell is to provide a subscribe and save option in addition to a one-time purchase.
Overnight Oats shows you exactly how much money you’ll save by subscribing. So the decision becomes why wouldn’t you subscribe and save money? (Remember, it’s all about easing the decision process!)
Offer a free gift or small item at checkout. When you offer a free gift or small item pre-purchase where the risk is low, you’re setting up the upsell for a larger/pricier version of that item down the road.
When you offer a sample or a gift, customers don’t need to have a lot of information about the product before they purchase it (or, to say no if it’s free). Sephora does a great job at upselling new/ upcoming products by offering small samples as gifts during checkout.
Then, you can hit customers up with a follow-up email or text upselling the more expensive item.
There’s no one-size-fits-all when it comes to upselling, and there are a lot of great strategies to try, so we recommend doing an A/B test to see what resonates with your customers best. It’s all about easing the decision-making process and adding customer value.
Effective cross-sell strategies
If upselling is about upgrading, cross-selling is about complementing. The most effective cross-sells tap into impulse buying and easing the decision-making process for a customer.
If I’m buying one I may as well buy the other!
That’s what you want your customer to think. Show them something that goes so well with the item they’re intending to purchase, they just have to purchase both.
Here are a few ways ecommerce brands can cross-sell effectively:
Feature cheaper, related, or easily forgotten items before checkout. Blume does this well by surfacing cheaper, related items from their catalog before taking you to your cart.
Pro tip: It’s best to keep it simple and start with one product; too many choices are overwhelming & decrease the likelihood of buying.
Bundle multiple products. Physician’s Choice does a phenomenal job at bundling their products. They tap into social proof with the “frequently bought together” copy. And, they instill and sense of FOMO by displaying exactly how much money you save.
Surface complementary items on product pages. Take advantage of the real estate on your product pages. For example, apparel brands can effectively cross-sell on product pages by showing bottoms that go with a top, or by showing items other shoppers also purchased.
Make an exclusive offer immediately post-purchase. This offer from Blume is a great example of a post-purchase cross-sell.
They showed me this right after I checked out—but before the thank you page. This helped me get the most out of the other items I purchased—face wash and oil—while taking into account my cart value (which was over $100).
Hats off to Blume for making the (correct) assumption that I would be willing to pay another $17 for what normally would be a pricier item. This effectively increased my average order value and customer lifetime value.
Upsell and cross-sell like a boss
No matter which strategies resonate best with your customers, remember to keep it subtle, relevant, ease the decision-making process, and always add customer value. Effective upselling and cross-selling should always add to the shopping experience, not degrade it.
Are you ready to upsell and cross-sell like a boss? Start your free trial of Drip today to get started!