Amazon turns 25 years old this year, and the e-commerce giant already commands over 37% of the online sales market. Within three years, estimates put that figure at 50%. While your online venture probably won't reach these heights, this is a massive market with plenty of room for new entry and growth.
It's fast-moving, though. It's not enough anymore to just offer up your wares on a static web page and hope that someone comes along to enter their payment information. The company's that survive and thrive in the online space are those that continue to innovate and expand.
One of the ways that you can do this is to offer more products and services to current and potential customers. You can accomplish this through a systematic program of upselling and cross-selling.
What is Upselling?
If your company offers several tiers of products or services, then upselling is probably an excellent marketing strategy.
Upselling involves expanding the value delivered to customers by convincing them to move to a higher-end product or service. This might be a different version than one that they are already using or one that they are considering purchasing.
JetBlue is a great example of making use of the "upsell." Their "Even More Space" campaign, which allowed passengers to purchase seats with additional legroom, brought in an additional $190 million in revenue in 2014.
What is Cross-Selling?
Cross-selling involves pitching and selling related products or services to customers so that they can get the best use out of what they already own. This might involve selling accessories that enhance a product.
We mentioned Amazon at the top, and they are masters at this with their "Customers Who Bought This Item Also Bought," and "Frequently Bought Together" features.
When you buy a new Kindle, of course, you would also need a stylish cover to go with it. Likewise, a new flat screen TV might need a wall mount, sound bar, or some cables. This is simple cross-selling.
If you are selling web design services, it would also make sense that you'd also offer social media marketing. It's a different service but related to having a website.
Tips to Improve Your Online Revenue with Upselling and Cross-Selling
Upselling and cross-selling are sometimes used interchangeably, but there are a variety of scenarios with customers that can justify one approach over another. Here are several tips to get the most out of your marketing program so that you can maximize results from upselling and cross-selling.
Know which technique will produce results.
It's never a good idea to bombard your customers with suggestions for purchases. People get annoyed when you do this. Your goal should be to help customers achieve their goals with the most useful and feature-rich products possible.
Instead, provide limited opportunities with upselling and cross-selling. Statistics show that upselling is going to be 20 times more effective than cross-selling, so this should be your primary focus. It makes sense that a customer who has a product or service in mind doesn't want to be distracted in the moment by other "things." Although, this might work later.
If upselling just isn't an option, there is no harm in trying cross-selling. When you are marketing something that has a ton of complementary products or services, at least plant the seed and let customers know that they are there.
When you upsell or cross-sell to customers, be honest about your intentions. If they feel that you're trying to pull a fast one on them, they'll leave. Customers appreciate transparency above everything else. Simply let them know that you have a feature-rich product or service that can help them achieve their goals and be upfront about contracts or pricing.
Offer upsells and cross-sells that make sense.
Customers get frustrated when they are bombarded with offers that are not relevant to their needs. If you're going to offer upsells and cross-sells, know your market and only do so when it makes sense. Doing otherwise could jeopardize your initial sale and send the customer to a competitor.
Instead, look for cues that a customer has particular needs or pain points. Use these as triggers to send through your targeted offers.
Create automated personalized recommendations.
If you are doing a high volume of sales, it would be counterintuitive to review each one to see if it would be appropriate to send out an upsell or cross-sell to the customer. This is where it makes sense to automate the process, with one condition. You'll want this to be personalized so that the customer doesn't feel like just another number.
When you use the Strands Recommender, which is a free Magento extension, your customers get automatic upsells and cross-sells with personalized suggestions. You also receive deep user profiles, targeted email campaigns, and detailed reports to track your results.
Create automatic upsells and cross-sells.
Another way to create automatic upsells and cross-sells on your online store is with the Mass Product Linker extension by Llian. This is another free Magento extension that mass cross-sells and upsells products, allowing for easy activation and management.
When you offer upsells and cross-sells to customers, it helps to have as much information as possible about those additional products or services. If there are reviews available, this is excellent. Another option is to have tutorials showing how the products or services are complementary or a step up from the one that the customer had originally purchased or was looking to buy. In other words, show the customer how they are going to get value by trading up or making an additional purchase.
When you are successful with an upsell or cross-selling program, it's a good idea to take a few additional steps to cement customer loyalty. In essence, you've convinced a customer to spend even more money than they originally planned, so let them know that you appreciate their business and plan to do what is necessary to keep it.
Some of the things you can do to demonstrate your appreciation include sending an email thank you note, sending a personalized thank you letter, sending them a small gift, and offering them a discount code to use towards a future purchase.
When you choose to upsell, cross-sell, or both, it's also an excellent idea to track your data. Find out which of your products pair best with cross-selling as well as what features drive your upsells. Identify what point in the purchasing process is the best time to upsell or cross-sell. These metrics can also help you fine-tune your sales plan and develop the best initiatives that will help you to strategize a successful eCommerce business.
Author Bio: Jason is a marketer from Webrevenue.io. He manages and runs a few websites. He blogs about topics related to social media, SEO, eCommerce and others. You can connect with him via Twitter @JasonCPF