The Do's and Don'ts of Upselling and Cross Selling
Penny Schneck -- Furniture Today, July 31, 2009
One of the easiest ways to improve your bottom line is, of course, to get existing customers to increase their average order size. Are you taking advantage of every opportunity to up sell and cross sell your regular online customers?
Up selling is defined as offering customers a product that is more expensive than the product they are currently considering or to add options/features to the product they are buying. Cross selling refers to selling items that are complementary to the item they are purchasing. Not only will cross selling and up selling improve your bottom line, but their good customer service - as long as your suggestions are relevant and informative.
Following are some do's and don'ts you can implement on your e-commerce site to boost order size:
The Do's:
• Do continue to sell on the thank you or exit page. The most common locations for add-on sales are the product page and view cart page. However, there are several other great locations for suggesting additional purchases. Typically, the thank you page confirms the transaction, but be sure to include promotional copy at this point, too. Consider including another product image and description with a simple instructions on how to add the recommended product to the original order. Your customers should be able to purchase the additional item without having to go through the entire check-out process a second time. Even if you decide not to offer an additional product on the thank you page, this is a great place to ask customers to sign up for your enewsletter or emails on upgrades, new items and special offers.
• Remember to add links to special offers in your email confirmations!
• Do use your shopping cart technology to automate the cross selling and up selling process.
• If you don't have the latest online shopping cart to cross sell, simply add links to similar products on your product pages with copy such as "People like you who purchased this product also purchased this product". You also can add bundled packages of goods to your site catalog in addition to selling the products individually. Test bundles with different price points.
• Be sure highlight discounts for buying in quantity.
• Sales appeal. Everyone is looking for bargains these days so be sure to highlight sales, special offers and other discounts.
• Discounts on shipping once a customer reaches a certain volume are a win-win for buyer and seller. You'll get the incremental sale and your customers will feel they've come out ahead.
• If you want to sell a high-priced item you can first prepare your customer by selling several low priced items. I.e. create and market several low-cost items that lead the customer to purchase the high priced item.
• Be sure to personalize your recommendations. "People like you who purchased this" works better than "Customers who purchased this".
• Consider "top rated" or "bestseller" suggestions with reviews from other shoppers to help build credibility for your recommendations.
• Stay relevant. Make sure the product you are trying to cross sell actually relates to the product the customer is purchasing. Offering a reading lamp for a desk makes perfect sense.
• Do test your cross selling and up selling to see which strategy and combinations works best for you. Try mixing and matching different items to find the combination that generates the most amount of revenue.
Now for the Don'ts:
• Don't interfere in the original purchase process. Wait until the customer has put something in their shopping cart before recommending additional items.
• Don't use the cross sell tactic to simply unload unwanted inventory. If the item is a discontinued item, be sure to let the customer know.
• Don't try to cross sell a new product. The features and benefits of a new product take time to explain. Cross sell purchases are typically impulse buys that are no-brainers for the customer.
• Don't be pushy when it comes to add-on sales. These should be recommendations. Put your customer's interests first and view cross selling and up selling as a means to educate your audience. In fact, Jupiter Media Metrix reports that online merchants also should be looking for cross-selling as a way to increase customer value over time.
• Don't try to sell a big-ticket item as a cross sell. Generally speaking the incremental add-on should be 10-25% of the price of the original item already in the customer's shopping cart. Adding additional items to the shopping cart process is similar to adding that magazine, candy or drink to your shopping cart when you are in the check-out lane at the grocery store.
Finally, don't miss out on the opportunity to cross sell and up sell or you risk leaving revenue and profit per order on the table!
Resources: www.Shop.org: Shop.org is a part of the National Retail Federation. Shop.org's focus is to provide a forum for retail executives to share information, lessons-learned, new perspectives, insights and intelligence about online and multichannel retailing.
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