Cross-Selling And Up-Selling: E-commerce Tips & Tactics

Brian Deignan
By Brian Deignan

Estimated read time: 3 minutes, 51 seconds

Attracting new customers can be challenging, with one of the heaviest burdens being the expense related to conversion. Parature estimates that it costs 6 times more to convert new customers than it does to retain the ones already on board. So, it’s in your best interest to target current customers with a variety of cross-sells and up-sells.

The probability of selling to an existing customer is fourteen times higher than the probability of selling to a new customer, so it makes sense to invest time and energy into the customers you already have. Additionally, cross-sells, also known as product recommendations, are the ticket to bigger sales and bigger revenues.

Cross-Selling And Up-Selling Tactics Boost Your Online Sales

Product recommendations can have a big impact on what consumers purchase. A 2012 study by Exastax discovered that the worldwide average of website revenue generated through product recommendations is 12%— product recommendations, particularly when they’re personalized to suit the consumer, are undoubtedly effective. Many businesses continue to find that up- and cross-selling boost their bottom line.

Cross-Selling In Ecommerce

“Cross-selling” refers to offering complimentary or ancillary products (also known as add-ons) to customers. This can occur anywhere on the website, including product detail pages or interstitial pages. Additionally, Predictive Intent found that cross-sells on the checkout page can actually increase conversions by 3 percent.

Personalization is key to effective cross-selling. If the customer feels that the additional products have been chosen specifically for them, based on their likes and preferences, they’re more likely to buy in. Using words like “you” and “yours” help the customers imagine themselves owning the product in question, and it gently pushes them toward buying the suggested product.

Amazon is the master of cross-selling; in fact, an estimated 35% of Amazon’s total sales are due to effective cross-selling. When a customer is purchasing, say, a new pair of boots, Amazon will display a purse and jacket to match. Purchasing paper for the printer? Amazon displays toner cartridges and file folders.

Not only does cross-selling create an opportunity to increase the company’s revenue, but it can also result in increased customer satisfaction. Customers appreciate feeling as though the company has their best interest at heart, and offering add-on items that will enhance the shopper’s experience can lead to brand loyalty in the long run.

Cross-selling tip: Know your market. More specifically, understand your buyer’s wants and needs in order to effectively cross-sell. Offer cross-sells that go with the product, are less expensive than the product, and don’t require instructions. The goal is to make the add-on a no-brainer, while avoiding distracting the buyer from the original purchase.

How Up-selling Works In Ecommerce

Up-selling offers customers an upgraded version of the current purchase. Whether it’s a higher-priced, superior model of the item, or the same item with value-added features, failure to up-sell misses an opportunity to offer the customer an improved product or experience and, in turn, make a larger sale.

Spotify up-sells its premium service by showing consumers the differences between the premium service and the free service side-by-side. The free service offers only one feature to the premium service’s six, making the free service seem obsolete and inconvenient.

Another method of up-selling involves offering a higher-priced option at a slight discount. For example, a customer can purchase a software license on a three-year contract at 15% off, while the one-year contract is at its usual rate.

When a business up-sells, it’s vital that the upgraded item is the same product, only better. If someone’s looking for a Nintendo Wii, don’t offer them a PlayStation. They’re two different products.

Up-selling tip: Don’t offer too many options. If, for instance, a consumer is searching for a new laptop, don’t inundate them with superior options. Too much choice can demotivate the consumer, leading to no sale being made at all.

Increase Your Sales With Effective Product Recommendations That Add Value For Your Customer

Any SaaS company that sells games, music, or e-books online should understand that knowing how to use cross-selling and up-selling techniques is critical to boosting average order values.

Don’t be afraid to cross and up-sell. When done well, customers appreciate recommendations. 39% of consumers purchase more when retailers offer them personalized suggestions based on their previous buying habits.  With smart, tactful, and strategic product recommendations for your customers, you’ll be adding value to their purchases, and profits to your sales.

FastSpring’s full-service platform will help users acquire and retain customers, through methods such as cross-selling and up-selling as well as lead generation, A/B testing, and more. Interested in learning more? Click the link below to request a free FastSpring demo today.

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