Online businesses that employ the right marketing and sales strategies always win big in today’s competitive marketplace. This is why you find big eCommerce brands like Amazon, eBay, and AliExpress using techniques like upselling and cross-selling to improve their sales margins without investing a huge sum of money.
Unfortunately, some eCommerce store owners do not capitalize on tactics that will increase the lifetime value of their customers.
If you’re this kind of entrepreneur, then you’re leaving a lot of money and opportunities on the table. As illustrated in this customer acquisition and retention infographic, the probability of selling products to a new prospect lies between 5 to 20%, while that of selling to your existing customers is in the 60 to 70 % range.
These figures are a clear indication that marketing your products to existing customers can take your business to a whole new level. As an eCommerce entrepreneur, there are different upselling and cross-selling strategies that you can put in place to help you reach and potentially exceed your business goals.
What is Cross-Selling and Upselling?
But before diving into these, let’s understand what we mean by cross-selling and upselling.
Cross-selling is encouraging a customer or prospect to purchase a complimentary item in conjunction with their initial purchase. For example, when a customer adds a computer to their cart, you can invite them to purchase a printer.
In a cross-sell offer, the recommended item is not an upgrade or add-on to the initial purchase, but rather an interrelated product that gives a better utility when used alongside the original product.
Upselling is the practice of selling a higher level of service or product to the customer. The upsell offer should be a premium service or upgrade of the product your customer is anticipating to purchase.
For instance, if a customer is purchasing a MacBook worth $1000, you can encourage them to purchase one with a better processor and higher storage capacity at a discounted price of $1300. The idea behind upselling is targeting a subset of customers who wouldn’t mind paying more for a better version of a product.
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7 Cross-Selling and Upselling Strategies to Increase eCommerce Revenue
Both upselling and cross-selling are designed to increase the value of your sales. However, sellers should ensure that these offers add value to their customers’ lives. Now that you have a good understanding of cross-selling and upselling, let’s dive into some effective strategies that businesses can use to increase their revenue.
1. Employ creative product bundling techniques
Product bundling is one of the most effective ways of cross-selling eCommerce products. Here, you offer supplementary products that enhance the use of a primary product in a single package. For instance, if your customer is interested in a TV set, you can offer an enhanced bundle that includes a sound system, wall-mount, and HDMI cables at a discounted price.
The customer will find the bundle even more attractive if it goes for a lower amount than the total of individual products. Additionally, the customer will also benefit from a flat-rate shipping fee for items purchased together.
An effective bundling technique that works well for fashion and lifestyle products is the “shop the look” strategy. This involves using high-quality images of products in real-life. In the example below, Wayfair employs this strategy. Notice how they showcase items sold together in a showroom-inspired image, with links and pricing for all items.
You can also increase sales by setting a minimum order value that makes customers eligible for free shipping for every product bundle whose price exceeds a specified amount.
2. Leverage user-generated content
User-generated content is the most authentic form or product marketing and promotion. According to, online users trust reviews from customers more as opposed to brand marketers. For this reason, you should capture real-life examples of customers using your products and embed them online as social proof.
An easy way of doing this is gathering online reviews, product ratings, and testimonials from shoppers who previously purchased premium products in your store. By displaying these reviews, customers will be more convinced of the value they’ll receive upon purchasing the recommended products. Most eCommerce platforms use reviews to persuade customers. Here’s a good example of customer ratings and reviews on Amazon.
The bottom line here is letting customers tell your story by sharing their experience. Sharing social proof works as trust signals that encourage conversion rates and drive more sales for your business. If you can repurpose their message into customer case studies and success stories, then you’re bound to enjoy even more success.
3. Segment your customer base
For you to deliver value to your customers, you must first understand their shopping goals and challenges. Once you have a good understanding of their needs, then you can serve relevant and personalized recommendations.
From a strategic perspective, this is only possible if you segment customers based on their characteristics and behavior. You can create multiple customer cohorts using consumer data such as demographics, location, occupation, age, gender, purchase history, search history, or any other data available in your Customer Relationship Management (CRM) system.
Creating customer segments allows you to recommend products in a well-targeted manner. The ability to personalize marketing messages is quite instrumental, not only for upselling and cross-selling but for every other marketing initiative.
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4. Suggest premium products
This is an upselling approach where you recommend premium offerings to customers. When using this strategy, it is important to ensure customers understand what sets the premium offering apart from the regular products. You can use high-quality images alongside the product description to spell out the difference.
The key here is marketing products that your customers will be comfortable spending extra money in order to enjoy added value.
One such powerful upselling technique is allowing customers to compare different models of the product they’re seeking. This is especially important for electronics where customers need to compare the specifications of different products. Here’s an example where Amazon showcases features of differently-priced MacBook models.
5. Recommend complementary products
Complementary products are used alongside the main item that a customer purchases. A good example is encouraging customers to purchase high-quality printing papers after adding a printer to their cart. This strategy can be used on almost every other product provided the items can be used together.
Amazon uses the “frequently bought together” strategy to recommend complementary products on almost every page.
Another way to implement the complementary products upsell strategy to your Shopify store is using a third-party app like Candy Rack. Candy Rack uses an AI algorithm to recommend the most relevant product for the one that just has been added to the cart. The upsell and cross-sell offers are displayed on the product page after the customer adds the product to the cart.
An alternative way of recommending complementary items is adding the “you might also like”, and “people also viewed” sections on your eCommerce store.
Recommending seasonal collections is another cross-selling tactic for increasing eCommerce revenue. Here, you recommend a collection of weather-appropriate products like warm sweaters and beanies for winter. If your target audience is enjoying the sun in Miami, you can recommend a beachwear line.
6. Run a discount or incentive program
Offering discounts and other relevant incentives is a great way of inducing more purchases from the target audience. If a customer feels that they are getting considerable value through the offer, then they are more likely to consider the deal. Incentive programs may take different forms, including:
- Limited-time discounts: Displaying limited time offers as shown below creates a sense of urgency, thereby encouraging customers to purchase an item even if it wasn’t in their plans. Since most consumers fear missing out, they are more likely to take advantage of your offer before it expires.
- Product extension: This involves enriching a purchase with an add-on that improves your customer’s experience.
For instance, if you’re selling digital cameras, the add-on could be a 64GB memory card, a flash disk, or a photographic lens. For service-based products, you can throw in some special features for free if the customer upgrades to a higher service level.
- Order thresholds: It involves offering an incentive to customers when they spend a specific amount on products. Order-thresholds, like the one below, creates a win-win scenario, where the customer gets the best bang for their buck while the seller enjoys a higher average order value.
- Offering a trial version: Sometimes, all that customers need before investing in a product or service is an opportunity to try it out. This upselling strategy is more effective for online services such as SaaS software.
A content management service or domain reseller may offer a one-month free trial of their service, which encourages them to subscribe to a premium plan upon expiry of the free offering.
7. Track sales and send related offers via mail
The vast majority of sellers limit their cross-selling and upselling strategies to online product pages and checkout processes. However, there are several channels that you can use to boost your upselling and cross-selling efforts. Sending product offers and recommendations through email is one such effective way.
When a customer makes a purchase, and they are satisfied with the product, you can send follow-up emails with a recommendation of upsells or cross-sells that might interest them. A practical example would be when a customer purchases a golf bag, you can encourage them to buy more by sending them follow-up emails recommending related golfing accessories. This type of email campaign has great potential for generating more sales if done correctly.
Worth a mention is that there are tons of tools and plugins that you can use to add upselling or cross-selling to your eCommerce store. Most of these vary depending on the platform you’re using. If your store runs on Shopify, for instance, you can use tools like Receiptful, Unlimited Upsell, Product Upsell, or Linkcious Related Products for your marketing campaign.
Conclusion
Executing a successful upsell and cross-sell campaign will not only increase the average order value but also improve customer retention.
When creating your upsell and cross-sell offers, remember the aim is not to generate revenue but rather adding value to every purchase the customer makes. So, put your customers’ needs first, and your product selection will market itself.
There you go! You have all it takes to grow your business by selling more to your customers and giving them a better experience. By following the above tips, generating more revenue will be nothing but a breeze!
Author bio
Adela Belin is a content marketer and blogger at Writers Per Hour. She is passionate about sharing stories with the hope to make a difference in people’s lives and contribute to their personal and professional growth. Find her on Twitter and LinkedIn.
Frequently asked questions about Cross-selling and Upselling Strategies
Why are cross-selling and upselling important?
Cross-selling and upselling strategies are important for several reasons: Increased revenue, Enhanced customer experience, Customer satisfaction and loyalty, Maximizing customer lifetime value. Cross-selling and upselling strategies help maximize the potential value of each customer by encouraging repeat purchases and increasing their lifetime value to the business.
What are some effective cross-selling strategies?
Effective cross-selling strategies include: Product bundling, Personalized recommendations, Post-purchase follow-up, Product displays and placements. Strategically position complementary items near the main product or at the checkout stage to encourage impulse purchases and cross-selling opportunities.
How can businesses determine the most effective cross-selling and upselling opportunities?
Businesses can determine the most effective cross-selling and upselling opportunities by: Analyzing customer data, Conducting customer segmentation, A/B testing, Continuous monitoring and refinement. By adopting these strategies and continually evaluating their effectiveness, businesses can effectively implement cross-selling and upselling techniques to enhance customer satisfaction, increase revenue, and maximize customer lifetime value.
