Whether you’re B2B or B2C oriented, digital upselling and cross-selling are two major influencers of customer loyalty — and in turn, net growth.
However: These two terms can often be confused, or inappropriately implemented…
I’ll explain more in a moment.
For now, here’s the lowdown on why you may need to reconsider your current approach to selling.
If you’re failing to utilize and pair these coveted sales techniques in unison, your company is (without doubt) leaving money on the table.
A mistake Amazon never makes…
(Graphic Source: Kissmetrics)
[Incidentally, net Amazon revenue in 2006 was nearly $11Billion. Which means, upselling and cross-selling increased their total by almost $4Billion — just 14 years after the company was founded. WOW!]
(Graph Source: Statistica)
Fast forward to 2018, and the same lesson applies; following in the footsteps of Amazon is never a bad move!
Not only are you able to rapidly increase revenue and profit per customer while forging stronger relationships — but a solid combo of upselling and cross-selling paves the way towards:
A smoother, stabilized, less-frantic business.
This will often be reflected throughout general operations and most importantly, the company bank account/s.
How?
By forming tight, lasting bonds with existing customers instead of relentlessly chasing new sales via tunnel vision, 1) Cash flow becomes much more predictable, 2) You know your customers and their needs very well — all while 3) You’re spending less time, energy and investment (rather than forever pursuing ‘once-and-done’ acquisition):
“It’s 50% easier to sell to existing customers than to new prospects.”
(Source: Marketing Metrics)
(Infographic Source: Groove)
But of course, completely forgetting acquisition wouldn’t be wise, in any case…
It’s vital not to disregard the window of opportunity prior to a person or business becoming a paying customer, too!
Each and every purchase should be treated with utmost care and attention — considering the entire customer journey. If you do everything right, your first-time buyers may just turn out to become lifelong brand advocates.
[The more customers spend, the greater their perceived connection to your business.]
Therefore, both types of selling can (and should) be initiated before the first sale, during payment, and intermittently afterwards.
It must be a carefully balanced, well-timed strategy to strengthen allegiance between company and customer right from the very start…
Push too much, and you risk diminishing value — instead of enhancing it.
Amazon is one of the best illustrative examples; whether a new or returning customer, you’re forever presented with relevant suggestions:
UPSELL
CROSS-SELL
An always-in-mind stream of personalized recommendations makes it much easier to buy, and the subsequent psychological impact is enormous — customers end up desiring what they perhaps never intended to want or ‘need.’
There are numerous in-depth studies out there with various outcomes, yet each signifies the same conclusion…
It absolutely makes sense to upsell and cross-sell!
So, what do these two terms actually mean?
- Upselling — Encouraging a customer to spend more by suggesting a newer or otherwise ‘better’ product and/or service that is greater in price, or by providing upgrade options.
When you’re upselling, the customer will be greeted with products and upgrades that are specific to the product and/or service they already use (or plan to use).
THINK: A more sophisticated digital camera, plus additional internal memory. A ‘premium’ paint style when buying a car, or more storage space in a file-sharing app like Google Drive.
- Cross-selling — Encouraging a customer to spend more by suggesting different products and/or services that may (or may not) be closely related to the original (or planned) purchase.
Typically, your suggestions would complement this purchase.
THINK: A camera carry case. A supply of branded car wax and various cleaning equipment when buying a car, or direction towards paying for Google AdWords ads from within your Google Drive / G Suite interface (a platform for business use).
Here’s a perfectly concise, visual example from Pepperi:
This guide uncovers similar ideas that translate across both B2C and B2B industries, clever automation tools to use, and how each selling method lends itself to either business model.
It pays, as Redspire demonstrate…
(Infographic Source: SlideShare)
Sales increase — and so do profit margins. This is because the costs to acquire a customer are dwarfed by larger and/or repeat purchases encouraged by upsells and cross-sells.
That said, it should come as no surprise that brands will do everything possible to ensure the success of each technique…
Apply these 3 revenue-boosting, profit-driving upsell and cross-sell methods to impress modern customers throughout their journey, while simultaneously improving your retention rate and average order value (AOV).
Method #1: ‘While Browsing’
Did you know your favorite stores are laid out in a way that is meticulously planned?
It isn’t merely coincidence that as you approach checkout after completing your weekly grocery shop, you are greeted with low-friction, impulse purchases — like chocolate bars and chewing gum!
Psychological and even sensory triggers are always in place to make customers spend more.
(Graphic Source: Steve Ferrante via Pinnacle Performance Champions)
For instance, IKEA pumps out the smell of cooked sausages in its kitchen displays — and Thomson Holidays apparently uses coconut oil to sell Caribbean breaks…
No matter your business type, you can utilize similar persuasive techniques within your digital presence as visitors browse (although sadly, olfaction is not yet possible online.) ☺
While customers consider their options and reach a supposedly final decision, don’t miss this golden opportunity to simply show them what else they can enjoy.
At this critical stage in their journey, they may not be aware of your other offerings, or plan to buy anything else…
It’s a key point to remember.
Above all, both upsells and cross-sells must create genuine, mutual value (else customers will immediately recognize the imbalance).
Do it right, and everybody wins.
No stereotypical slimy sales stigma or shame attached!
“You’re helping the customer. Remove apologetic tones — offer greater savings and advantages during the upsell process. Package it all as big value…”
(Source: Ryan Dohrn via Tech Insurance)
(Infographic Source: Totango via SlideShare)
Your core mission is to continuously add value during the purchase cycle.
While customers browse your digital properties, product or service bundles should be presented as super helpful add-ons.
Relevancy plays an obvious role here — you wouldn’t package a $75K Mercedes Benz as a cross-sell from a toothbrush…
Well, you could (and you may achieve some press as a result of your sheer audacity), but it would likely never sell!
Keep customers’ needs and the price of the original product or service firmly in mind.
It’s time for our favorite word again:
VALUE
Clearly, the 2x cross-sells suggested here are 100% applicable to the initial 1x planned purchase (an on-camera microphone).
It makes total sense, and the individually-listed add-on prices also seem much smaller in comparison to the original $50 price, enticing the “Ahhhh, might as well!’ attitude — another psychological anchoring technique commonly used in pricing.
And all it takes is one click to add all these recommended items to the basket; convenient and frictionless!
The recipe for conversion…
(Infographic Source: Danny Setiawan via SlideShare)
Cue Amazon once more. Its marketing team has the entire customer journey pinned down…
Perhaps a potential customer is interrupted as they were about to buy. Maybe they had second thoughts and determined the proposed bundle to be just a little too expensive?
This isn’t the end! When that potential customer opens their webmail or begins browsing online again, this is likely what they’ll see:
This ‘recall’ marketing that follows visitors around is known as retargeting, and if you failed to convert the first time — it certainly packs a punch. Studies by CMO have found retargeting to improve conversion rates by up to 147%.
Once the potential customer clicks through, tools out there make it possible to customize their experience dependent on their unique browsing history and other contextual pieces of data, such as demographics.
[Check out ReTargeter.]
Another appealing technique is to offer an additional discount in return for customers buying bundles. How can they refuse this cross-sell?
Yet, some of the greatest upsell / cross-sell methods almost go unnoticed by the customer…
Here’s a classy B2B example of upsell discounting via the product page, where discount increases on a sliding scale in sync with the amount of business contacts selected:
This is a particularly smooth pre-purchase upsell — reason being, it doesn’t really look like one at all…
The element of interaction also adds to its charm.
While the customer calculates how many contacts they may need, they are also being influenced to purchase more space (as a reserve) simply because the cost benefit is evident.
Interestingly, the text below the ‘Contact Us’ button states this deal is only available for new customers. While potentially appearing controversial to existing customers (should they see it) — it nudges greater spend from new customers due to the fear of missing out…
If the discount isn’t bagged right now, it likely won’t be available if more contact slots are required later.
Smart psychology!
Let’s take a peek at the other main places to capture attention and communicate value…
Method #2: ‘In Cart’
Check this fine B2B SaaS (Software as a Service) example discovered while domain shopping; it presents both an upsell and cross-sell within the shopping cart itself.
Hosting can be considered a cross-sell, and ID protection is an upsell to enhance the intended purchase:
Easy-peasy one-click selection that ticks all the boxes of exemplary customer experience, at a time and location where usability and trust are paramount.
Speaking of trust, you can also try adding social proof like review stars per item (unclickable — so not to distract), testimonials and company honors, awards or achievements.
Yet, there are still some extra-persuasive cart techniques to deploy, to reinforce this positive psychological influence…
Scarcity + urgency is another potent combo that does an amazing job of gently nudging customers to 1) Buy now, 2) Buy more, and 3) Buy again.
A mix of all the above? Truly magnetic!
Here’s what it looks like in collective action, thanks to Photoslurp:
Emulate these cart sales enhancers no matter your business type.
REMEMBER
- Keep it tidy — Don’t clutter the cart and overwhelm customers (this could actually lose business, instead of gaining it)
- Keep it simple — Tell customers exactly what they will get via upsells and cross-sells, concisely and considerately
- Keep it welcoming — “Customers also bought…” instead of “Add these to your cart, now!”
- Keep it relevant — The better the alignment, the greater your conversion rate and order value
We’ve now reached the art of retention…
Method #3: ‘After Checkout’
That’s immediately after checkout…
If you only decide to utilize just one of these upsell / cross-sell locations (for some crazy reason?!) — let this be it.
Amazon aside, this entire concept is relatively new and/or underutilized; so it’s a chance to really get ahead of your competition and maximize order value through the power of impulse buying…
Big time.
You already achieved a sale. Now gain a repeat customer!
“We’re seeing customers with 10% conversion rates on their post-purchase upsell offers.”
(Source: Bold Commerce)
Melanie Fatouros-Richardson describes it perfectly:
“Upselling directly after checkout has the highest conversion rate of any other offer location.
Why? Because the buyer has already committed to buying from you, they trust you; they’ve entered their shipping details and paid! There’s no disruption to the original sales funnel…”
Furthermore, the advances in ecommerce tech have made the post-checkout upsell / cross-sell a cinch.
Tools on their way in a tick!
(Infographic Source: Guy Nirpaz via Prezi)
You can make the most of many opportunities following any immediate upsells / cross-sells, too…
Post-purchase, the customer journey is only just beginning; and this is exactly how you should treat the process. It’s a never-ending funnel.
For example:
- Personalized email drip marketing is a lucrative way to keep customers engaged and in-tune with your latest offerings (also perfect for cart abandonment to recapture opted-in customers — and opt-in is now essential for these emails, by the way)
- Customer support (across all channels) is yet another chance to upsell and cross-sell (utmost tact required, though!)
- Push notifications present an ultra-modern method of retentionand
- Receipts are also golden opportunities to further engage customers
Yes. You did read correctly…
It may come as a surprise that your receipt and/or invoice emails are prime opportunities to generate more profit via repeat sales, customer loyalty and collective happiness.
With a notable open rate of ~71% (compared to the measly ~17% average of regular marketing emails), transactional emails are ripe for incentives.
Additionally, transactional emails do not require customer consent. They are mandatory.
So, along with the discussed opportunity that exists directly after checkout — the receipt upsell / cross-sell can act as a bonus double-whammy to squeeze in another offer…
[DISCLAIMER: This nature of promotion may now be somewhat ‘grey hat’ under The GDPR, so it’s best to ask a specialist data privacy / protection consultant with regards to your unique situation.]
Here’s a subtle B2C example that provides obvious advantages to both parties:
(Graphic Source: Conversio)
And a B2B receipt that includes a similar offer:
Alas! A quest to (almost) match Amazon functionality may not be so unreachable…
Best Tools To Use
You’ll probably have heard enough about the capabilities of Artificial Intelligence and Machine Learning in marketing and sales recently — manual labor just doesn’t suit our fast-paced, data-rich world today.
So, without further ado, here are the intelligent tools that make digital upselling and cross-selling possible — dynamic, highly personalized, and at scale!
(Infographic Source: Kissmetrics)
Plus, a selection of Shopify solutions for ecomm stores:
And B2B-specific sales tools:
BONUS METHOD: ‘While Disengaged’
Think we’re done? Think again!
To finish off, here is a super juicy method to actually win customers over when the prospect of any sale is looking slim.
The customer doesn’t seem interested. They don’t want an upsell. They don’t want a cross-sell. They don’t even seem to want to buy anything…
How do you handle this scenario in a way that adds value to both sides?
Enter: The downsell!
As the opposite of upselling — downselling provides the customer with the same (or a similar) browsed item / service that is lower in price.
Such an offer can take the form of a special discount on the item or service in question, or the suggestion of another option that is more affordable…
A characteristic, digital example of a downsell is the exit-intent popup.
This strategy is effective across both desktop and mobile — where the tech detects the disinterest of a user via their clicks or touch movements.
Here are some tools to try:
Coupled with cart abandonment emails and retargeting, it’s a very slick technique to not only impress customers and win their business — but strengthen their connection to your brand — because they feel special when receiving personalized deals.
Meet them at a level of spend they are comfortable with, and the mutual rewards may just turn out to be everlasting.
Apply the ‘downselling on exit-intent’ concept to all aspects of customer engagement, whether on-site or off-site. Consider negative behavior triggers and automate the process of intercepting them, followed by the essential human touch (as Adam Fout explains here).
REMEMBER
Downsells have the best effect when the customer / potential customer:
- Is feeling friction due to prices they can’t afford
- Appears to be hesitant due to any required commitments (payment plans, for instance)
- Seems interested in competitors’ offerings
or - When they are showing any other obvious signs of disengagement from your brand and its properties, products or services
Be alert to these signals by ensuring you have your ear to the ground; 1:1 customer relationships are key to success in 2018 and beyond…
Discover how to achieve this by grabbing my guide to Customer Experience (CX).
Mike O’Connor
April 30, 2018
I love the way you breakdown complex selling information to terms I can understand.
A lot of online entrepreneurs can benefit from reading this article and learning the difference between upselling and cross selling.
You’re also right in that no one does better than Amazon.