15 Jan 2019

How to Upsell and Cross-Sell Like a Pro to increase profitability

Ever heard the word ‘kaizen?’ No, it’s not a character from Street Fighter – it’s the Japanese word for ‘improvement.’

It’s also a business strategy which refers to ‘continuous improvement through the aggregation of marginal gains.’ But, with fewer complicated words – it’s about the way in which those little daily wins, those small gains, can combine to create a very big difference to the bigger picture.

One of the most famous proponents of kaizen was Sir Dave Brailsford, during his time as Performance Director for British Cycling. At the 2004 Olympics, Team GB won 2 gold medals in cycling – which was their best performance since 1908. But that almost looks like abject failure compared to what followed.

Owing largely to the marginal gains approach advocated by Brailsford, GB won a staggering 60% of the medals available at the 2008 games in Beijing, before setting 9 Olympic records and 7 world records at London 2012. Between 2007 and 2017, British cyclists won 178 world championships, 66 Olympic and Paralympic gold medals – not to mention the small matter of 5 Tour de France victories.

Brailsford credited the theory of marginal gains as being a key part of the ‘secret sauce’ behind these victories. These goals would have initially seemed far too ambitious. But the tiny, day-by-day improvements encouraged by Brailsford and his team all added up to achieve a list of accomplishments that would have once seemed unimaginable.

eCommerce, of course, isn’t cycling. But there are always plenty of transferable lessons between sport and business. And, just like in the world of sport – tiny gains that apparently seem minute, can combine to make a huuuge difference to the overall picture of your eCommerce store.

As an eCommerce retailer, you’ll be all too aware that there are only a few levers you can pull to improve your profitability. And one of the most important is Average Order Value. In other words – encouraging your customers to spend a little bit more in each transaction.

That’s where learning the best strategies to upsell and cross-sell come in.

We all know it’s important to generate lots of new customers. But it’s also really hard! Getting your existing customers to spend more on each transaction can help move the needle in exactly the same way – and it’s much easier to market to people already on your site, displaying purchase intent. They have their payment details ready, they’re already committing to checking out – so why not just spend that little extra for a better product, or something that will go perfectly with it?

In this article, we’ll talk about how to upsell and cross-sell to unleash the power of marginal gains in YOUR eCommerce business.

What’s the difference?

While upselling and cross-selling are broadly similar, there are some subtle differences. And it’s important to make sure you’re covering both angles.

Upselling is all about persuading your customer to buy something additional or more expensive.

Cross-selling is about selling different products to support or complement the original purchase.

So, in action, let’s think about a trip to your favourite burger joint. You order a cheeseburger, and some of the questions you can expect (from a well-trained cashier!) are:

  • Would you like fries with that?’
  • ‘Would you like to turn that into a meal deal for £1 extra?’

This is pure upselling.

Now, once you’ve bundled it up into a deal or added those fries to your order, the cashier might ask:

  • ‘Can I get you an apple pie or ice cream for dessert?’
  • ‘How about a tea or coffee to go with your meal?’

These are complementary options designed to give you additional experiences. In other words – cross-selling.

Some online examples…

We’ve probably all been ‘upsold’ in an online transaction at some point.

Take Netflix for example. They offer 3 subscription packages – Standard, Basic and Premium. Anybody signing up is shown a clear side-by-side comparison of what’s included in each package.

If somebody’s gonna sign up to pay £5.99 a month…it’s fair to assume they’ll probably pay at least an extra £2 a month to watch in HD. £2 a month is basically nothing to most customers – but that’s a 33% increase in order value. Think kaizen. It’s easy to imagine how quickly those boosts can add up across hundreds of thousands of subscribers. Netflix could have just as easily set a flat subscription fee of £5.99, and concentrated solely on generating new subscribers – but they didn’t. They added an upsell option and, if just 2 customers upgrade to ‘Premium,’ that alone generates more than a new ‘Basic’ subscriber.

As with most eCommerce strategies, Amazon offer a great example of how to combine the upsell and cross-sell. Both of these strategies are at play on pretty much every product page.

Let’s say we’re shopping for some wireless headphones. We find a nice pair of Sony ones for £44. Under the ‘Compare with Similar Items’ section, we see a side-by-side comparison of this product with 3 other options. Generally speaking, 2 of these will be more expensive, and 1 will be slightly cheaper. Again, this is great upselling. The idea is that we see the more expensive option and are tempted to go with that one instead.

Elsewhere on the product page, we often see a great example of cross-selling. Customers are shown a variety of products which are ‘Frequently bought together,’ – including the one we’re viewing. So, if you’re buying a Nest Smart Thermostat – you’re probably going to be interested in buying a stand for it. You can add both these products to the basket with one click. It’s intuitive, frictionless and easy for the customer. (And it’s around a 10% increase in order value for those who take up the deal.)

Another example of cross-selling comes from Dollar Shave Club. They offer a monthly subscription service where fresh razors and shaving products are sent to their customers every month. The ‘Classic Shave Starter Set’ clocks in at £5 per month…

But once you add that to your cart, you’re offered a range of add-ons. These are very much additional, complementary products. They aren’t required – but they’re nice to have. Prep scrub, post-shave dew and post-shave cream are available for £7 each.

Again, this doesn’t feel particularly interruptive as a customer. It feels like a value-add of sorts – a chance to tailor the experience and get exactly what we need. But the commercial reality is that, considering the starting price of £5, these product options can potentially increase the transaction value by between 140% and 420% depending on which products are added.

POPULAR STRATEGIES TO UPSELL and CROSS-SELL

So, we just covered a few very specific examples from the world of online retail. Next, let’s look at a few more general ways of framing and presenting these offers.

‘Customers who bought this also viewed…’

This example lets you leverage your customer behavioural data, putting that information to work to inform what other customers may be interested in.

When you upload a design to Kite, all the products you choose to sell with that product applied are grouped into a ‘Collection.’ Many themes have a default option like below which shows other products from the collection. In a basic way, this is cross-selling.

“You may also love…”

Similar to the Amazon example above, this is where we group related products together by trying to understand the customer intent, and serving up similar/supporting products.

‘Nice X, how’s about Y to go with them?’

In this approach, we’re able to suggest products which would directly complement the one in the customers basket. As you can see below – this might be something like ‘Hey, you bought shoes…how about some socks to go with them?’ This requires a bit of thought about the nature of your product and how it will be used, but it can be pretty effective!

Upsell and Cross-Sell like a Pro in your store

That’s enough examples and inspiration. Let’s look at how to set this up for yourself in your Kite store!

Whether you’re selling on Shopify or BigCommerce, there are a number of different apps and tools that let you create upsell and cross-sell campaigns with just a few clicks (and no code!)

For the purpose of our example, we’ll use SMAR7 Bundle Upsell, a Shopify App. (Here are a few apps that you might want to consider if you’re selling on BigCommerce.)

Through the tool we’ve chosen here, there are a variety of different campaign options.

  • Standard upsell – this option lets you present products on checkout, depending on the items in the customer’s cart.
  • Discount upsell – this option lets you offer a percentage discount if your customers spend a certain amount in their purchase.
  • Free shipping upsell – similarly, this option lets you offer free shipping if your customers spend a certain amount.

For our first bundle, let’s assume you don’t really want to give anything away, and create a ‘standard’ upsell – which, in reality, will be a cross-sell!

Looking at our product range, one of our top-performing products is our Jungle Bungle beach towel.

So, what products could we sell alongside this, to increase our average order value? Well, we need to think about how and where this product might be used. Presumably, it’s for use in the gym, on the beach, or elsewhere on the move.

So, that being the case, wouldn’t it be convenient to have a bag to carry the towel in?

We’ve already used Kite to create a Tote Bag that matches the towel in question…

So now, we’ll create a campaign where every time a customer gets to the checkout to buy that towel – they’re offered a matching bag.

First, we’ll select ‘Standard Upsell.’

We’ll name the bundle ‘Buy towel – get bag,’ and write a message that our reader will see when the offer pops up.

Let’s go with: “Sick towel! Why not pick up a bag to carry it in?”

Now we select our Trigger Products – which products will ‘trigger’ the bundle to appear? In this case it’s the Jungle Bungle Beach Towel.

We’ll then identify our ‘Bundle Products’ – the products that will be recommended to your customers. We only need one in this case- the Jungle Bungle Tote Bag.

 

We can place this offer either before or after checkout. We’re going to go ahead and position it before the checkout, since the idea of paying shipping twice might be a turn off for our customers. Note that there are also a bunch of slider options to help you customise how your campaign will look, feel and work.

Hit ‘Save’ and you’re done.

Anyone buying that towel will now see a dialogue like the below – and you can tweak the font/colours etc in the Global Settings tab.

Again – this is a cross-selling campaign.

But you could use this campaign structure to create a ‘pure’ upsell too.

For example, say you’re using Kite to sell a printed canvas that’s 16×12” for, say, £30. You could set that as your ‘Trigger product’ so that every time anybody buys that product, they’re offered the same canvas, with a frame, for an extra £10 or £20. You’d set up the campaign in exactly the same way.

Incentivise spending!

Using some of the other campaign options, you can really push your customers to spend more – even if it slightly affects your profit margin.

This offers them a particular benefit for spending a certain amount, whether that’s a discount or free shipping. Nothing inspires a customer to reaaaally think of extra things they might need more than actually incentivising their spending.

If people have to spend a little more to get a nice discount or free shipping, they’ll often take the plunge and do exactly that.

So let’s go ahead and give our customers free shipping if they spend £100 in our store (not the most generous, right? But you can always be more generous if you like!) Setting up this sort of campaign is much the same. You just select ‘Discount’ or ‘Free Shipping’ from the bundle type.

We’ll select ‘Free shipping upsell’ and give the Bundle Name ‘Free Shipping if you Spend £100.’

You need to select at least one trigger and bundle product, but seeing as this offer applies across your whole store, just use the handy ‘Select All’ option on both these screens.

Now we’ll specify how much the user has to spend to get the free shipping. In our case, it’s £100.00. Feel free to go lower (or higher!) than this.

When we hit save, our campaign is set up. Here’s what our customers will see as they progress through the checkout process. They’ll be able to see how their spending stacks up against the spend threshold for the deal in question – as well as seeing suggested products to help them get over the finish line.

Thanks for Reading!

Hopefully, today’s article gave you some ideas, inspiration and a starting point for a plan to introduce upselling and cross-selling into your eCommerce store.

One of the beauties of print-on-demand merchandise is that, regardless of what you’re selling, apparel and gifts are always a great cross-sell. Buying headphones? Get a t-shirt with our logo on it! Buying a camera? Grab yourself a hoodie to wrap up against the elements while you’re taking shots!

The possibilities are endless, and – as always with print-on-demand – you don’t need to worry about holding stock, or sourcing products. The whole logistical side of the operation is taken care of for you.

So whether print-on-demand is the bread and butter of your business, or an ancillary extra, always remember:

When it comes to increasing your store’s bottom line – think kaizen.

The little gains go a long way. Happy selling!

Don’t forget to check out our ebook, “3 ADVANCED PROMOTIONAL TECHNIQUES FOR PRINT-ON-DEMAND MERCHANDISERS” for more awesome tips, tricks and strategies to help you grow….

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