If you’re going to sell widgets on your e-commerce store, you might as well pull out all the stops to convince your customers to buy the finest widgets on the market. And while you’re at it, get those same customers to purchase those ancillary fidgets as well. Because, really, if you need that widget there’s nothing like a good fidget to maximize its overall effectiveness. Right?
Astute marketers will know that I am referencing the art of upselling and cross-selling, and that my reference to “widgets” is not related to the control elements in a graphical user interface or a generic software application. Of course, if your online sales platform happens to sell such, then I guess I’m giving you a twofer here.
No matter what you happen to be selling, upselling and cross-selling have long been considered key add-on drivers of success in retail, with both sales strategies serving as big potential boosters to the bottom line in what is generally a narrow margin field.
Difference Between Upselling and Cross-Selling
While the terms are often used interchangeably, there is a distinct difference in that one represents an upgrade and the other represents the additional purchase of an accessory item. In short, the difference between “Supersize?” and “Would you like fries with that?”
Both of those oft-asked questions, you will note, have become so ensconced within popular culture that most North Americans likely know what they refer to and where these questions originated. And while these questions may now be cliche, both have proven immeasurably valuable to their originators and subsequent copiers.
Adding Fries and Super-Sizing With E-Commerce
Many e-commerce merchants feel like they have enough on their management plate without having to worry about super sizing soft drinks or adding french fries. Besides, most aren’t even offering food items, but instead offering various types of widgets. But those can be “super-ized” and you should certainly ask your customers if they’d like fidgets with their order.
If you don’t ask, you’re likely missing out. Consider that depending upon the researcher (and e-tailed product), e-commerce upsells and cross-sales are responsible for anywhere from 10 to 30 percent of revenues. The question is, should an emerging e-commerce business devote their initial energies to upselling, cross-selling or both?
Focus on What Value You’re Providing to the Customer
While this question depends in part upon the sales items(s) offered, perhaps the best way to consider this question is by first asking what additional value is provided to the customer by either the cross-sale or up-sale. Is the higher-end widget going to make a positive difference in your customer’s life, and/or does that fidget represent an ancillary item that the customer didn’t even realize he or she needed? If the answer to either or both is “yes,” then you’re halfway to answering the question. And the next step, among many, might consist of weighing any mark-up with the benefits gained by potential customer satisfaction.
Shopify Sees Benefits With Both Upselling and Cross-Selling
Leading e-commerce platform Shopify also recommends focusing on the customer experience first, rather than increased sales, when considering upselling and cross-selling strategies. Shopify Content Strategist Richard Lazazzera suggests always considering the upselling and cross-selling “experience from a customer perspective.” He also says that that offering customers random or un-related products “wont cut it and can just leave customers more confused.” While Lazazzera points to research suggesting that upselling is the better strategy for driving increased sales, he also notes the same research indicates that cross-selling is more effective when used on checkout pages. And, as he previously noted, you should focus on customer satisfaction first, as this is an ultimate driver of increased sales.
Whether Upselling or Cross-Selling….
Finally, there are certain nuances (rules) applicable to both upselling and cross-selling. A general rule of thumb with either strategy is to refrain from boosting an initial order cost by more than 25 percent, as this has proven to lead to order abandonment. Also, don’t overuse either strategy, as this can quickly lead to customer annoyance and the resultant order abandonment.
And to repeat, carefully consider the items being cross-sold or up-sold. For example, realize that a person buying a cell phone is much more likely to consider buying a cell phone case than vice versa. Or, that the person preparing to check-out with an Xbox probably isn’t interested in a side order of TurboTax. With upselling, consider that if someone arrives with a Big Mac budget, convincing them that they need Boucherie Polmard’s cote de boeuf (the most expensive steak in the world at a recent plus-$3,000 price point) may be a tall order.