Cross-selling and upselling are the most sure-shot ways for a business to increase customer loyalty and revenue.
Study shows that the probability of selling to a new prospect is only 5-20%, while the probability of selling to an existing customer goes up to a whole of 60-70%.
In fact, some of the biggest eCommerce brands like Amazon earns 35% of its revenue from cross-selling and up-selling.
Here is a way for you to achieve it too.
In this blog, we will address the top and most tested cross-selling and upselling strategies that will help your brand boost its revenues like no other.
But first, let us get into what these techniques are and why are they important.
What are upselling and cross-selling?
Upselling and cross-selling are two common sales techniques used by businesses to increase their revenue and profits.
Upselling refers to the practice of encouraging customers to purchase a more expensive or premium version of a product or service. For example, a salesperson may suggest that a customer upgrade to a larger size or more feature-rich model of a product.
Cross-selling, on the other hand, involves offering customers complementary or related products or services in addition to their original purchase. For example, a fast-food restaurant may ask if the customer would like to add fries or a drink to their burger order.
Both upselling and cross-selling are intended to increase the average order value and maximize the potential revenue from each customer. However, it's important for businesses to use these techniques in a way that benefits the customer and provides genuine value, rather than just trying to maximize profits.
Why are upselling and cross-selling important for eCommerce?
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Upselling and cross-selling are important for eCommerce for several reasons:
Increased revenue
By encouraging customers to purchase additional products or upgrade to a premium version, eCommerce businesses can increase their revenue per customer and improve their overall profitability.
Improved customer experience
Offering relevant products or services that complement the customer's original purchase can enhance their overall shopping experience and satisfaction, leading to increased loyalty and repeat purchases.
Enhanced product discovery
Cross-selling can help customers discover related products that they may not have otherwise found on their own, leading to increased sales of those products.
Competitive advantage
eCommerce businesses that effectively use upselling and cross-selling can differentiate themselves from competitors and establish themselves as trusted sources of information and recommendations.
However, it's important to use these techniques responsibly and avoid being too pushy or aggressive, as this can turn customers off and damage the relationship. Instead, eCommerce businesses should focus on offering genuine value and enhancing the customer experience to maximise the benefits of upselling and cross-selling.
5 Cross-Selling and Upselling Strategies to Increase eCommerce Revenue
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1. Give personalised product recommendations.
Displaying personalised product recommendations based on a customer's browsing and purchasing history can be a powerful tool for cross-selling and upselling. Analysing customer data to provide relevant product suggestions makes it more likely for customers to add more items to their carts. Personalised recommendations can be presented on the product page, in the shopping cart, or during the checkout process. eCommerce businesses can also use automation to gather customer data and provide relevant product recommendations in real time.
By leveraging customer data and AI algorithms, eCommerce businesses can provide personalised product recommendations to customers based on their past purchases and browsing history. Significantly leveraging conversational AI, like chatbots, to individually engage with every customer and seamlessly use upsell and cross-sell tactics from its product recommendations engine can increase the likelihood of customers making an additional purchase and improve their overall shopping experience.
2. Practice price anchoring
To encourage customers to purchase additional items, businesses can use a premium or high-end product as an anchor. By showcasing the most expensive option, customers may perceive the other products as more affordable and may be more likely to consider upgrading to a higher-end product or purchasing add-ons that complement their purchase.
For example, a high-end fashion retailer may use a designer handbag as the anchor to make their other bags seem more reasonably priced. By showcasing the expensive handbag as the most luxurious option, customers may perceive the other bags as more affordable, leading them to consider upgrading to a higher-end bag or purchasing add-ons such as a matching wallet or scarf.
Similarly, a technology retailer may use a top-of-the-line laptop as the anchor to encourage customers to consider purchasing a more advanced model or additional accessories. By showcasing the high-end laptop as the most expensive option, customers may perceive the other products as more affordable, leading them to consider upgrading to a higher-end laptop or purchasing add-ons such as a faster processor or extended warranty.
3. Employ Bundling Techniques
Another way to increase eCommerce revenue is to bundle complementary products together and offer them at a discounted price. This can incentivise customers to buy more items and increase the average order value. For example, you can bundle a shirt, pants, and shoes together and offer a discount for buying all three. You can also offer a discount for purchasing a certain number of items or a specific combination of products.
This makes bundling a great way to increase eCommerce revenue. There are some extremely creative and effective ways to bundle products that grab and hold a customer's attention long enough for them to see their appeal and make the purchase, such as creating themed bundles, cross-selling related products, offering subscription bundles, creating limited-time bundles, allowing customers to build their own bundles, and creating gift bundles. The key is to offer a discount that incentivises customers to buy more without cutting into your profits.
By bundling products, you can increase the average order value and encourage customers to buy more items. Themed bundles cater to specific occasions or needs while cross-selling bundles offer related products at a discounted price. Subscription bundles and limited-time bundles create a sense of urgency, and build-your-own bundles allow customers to select a combination of products at an improved rate. Gift bundles are pre-packaged and ready to give as a gift. Whatever bundling strategy you choose, be sure to offer a discount that is significant enough to entice customers to purchase more while still maintaining your profit margins. Automating the discounts ensures consistent and accurate application to each purchase.
4. Offer Loyalty programs
Loyalty programs can be a powerful tool for upselling and cross-selling. By offering exclusive rewards and incentives, you can encourage customers to spend more on each purchase and try new products or services. Here are some ways you can use loyalty programs for upselling and cross-selling:
Exclusive discounts: Offer exclusive discounts to loyalty program members on higher-priced products or premium services. This can incentivise customers to upgrade their purchases or try something new.
Tiered rewards: Use a tiered rewards system to encourage customers to spend more to reach higher levels of rewards. For example, customers who spend a certain amount can unlock a discount on a premium product, or they can earn free shipping for a certain amount spent.
Loyalty bundles: Offer loyalty program members exclusive access to product bundles that combine complementary products at a discounted price. This can encourage customers to try new products and increase the average order value.
Early access: Offer early access to new products or services to loyalty program members. This can create a sense of exclusivity and encourage customers to try new products before they are available to the general public.
By using loyalty programs for upselling and cross-selling, you can increase the average order value and encourage customers to try new products or services. These programs also massively help with customer retention, making sure to build loyal customers for the brand and its community. With automated systems to track customer participation and apply rewards, it can be an effective and efficient way to drive revenue in eCommerce.
5. Segment your audience
Customer segmentation is a valuable strategy to increase upselling and cross-selling in eCommerce. By dividing your customer base into different groups based on their behaviour, interests, or demographics, you can target specific offers and promotions to each group. For example, if you segment your customer base based on their past purchase behaviour, you can identify customers who have purchased certain products or services in the past and offer them related products or services as a personalised marketing strategy to promote more purchases. This helps create the best remarketing campaigns and increases the likelihood of cross-selling and upselling by a margin, as customers are more likely to be interested in products that align with their previous purchases.
Another example is interest-based segmentation is segmenting your customer base based on their interests or hobbies. This helps businesses offer personalised recommendations for products or services that they are likely to be interested in based on their consumer behaviour analysis. For instance, if a customer has shown interest in outdoor activities, you can offer them related products such as camping gear, hiking boots, or outdoor clothing. By targeting specific products to customers based on their interests, you can increase the chances of upselling or cross-selling, as customers are more likely to be interested in products that align with their hobbies and interests.
Overall, customer segmentation can help eCommerce businesses tailor their marketing and sales efforts to specific customer groups, and their overall sales funnel optimisation, increasing the effectiveness of their strategies. With automated systems to track customer behaviour and preferences, eCommerce businesses can efficiently and accurately segment their customer base and create personalised marketing strategies to offer targeted promotions and recommendations that drive revenue.
Conversational AI and Automation
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Incorporating Conversational AI and Automation technology into the back and front-end operations of your eCommerce store can do wonders for your business. These aspects are not just the biggest trends of the upcoming future but also the truth behind the success of platforms like Amazon, which is a full-blown digital commerce platform, run purely by automation.
To add to that, Conversational AI is the ultimate secret to personalisation. A conversational chatbot can not only collect customer data, but it can help you store and segment it, use that information to seamlessly provide personalised product recommendations to customers and even more proficiently use all the above-mentioned upselling and cross-selling tactics to help bring out the required result.
Conversational Chatbots can be trained using NLP to answer all customer queries in real time, provide recommendations and implement selling strategies at all the right times and offer the right incentives and promotions to crack deals to perfection. Plus, with the new GPT3 technology, conversational AI has become even smarter than before, aiming to aid businesses to the fullest extent and letting you focus on quality over quality.
And the best part?
You can check it out for yourself.
All you have to do is register for free with Engati and truly understand how Conversational AI can completely change how you do your business.
So don’t stop here.
Register for a free demo NOW.
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