Upsell and Cross-sell techniques: All you need to know

Ellie Ho

November 12, 2024

•

3 min read

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Suggestive selling is when you upscale products or services to the customers. The purpose of this method is to increase the value of sales, which drives revenue for the brand by boosting average order value (AOV) or customer lifetime value (CLV). The probability of selling to existing customers is 60-70%, while the probability of selling to a new prospect is 5-20%. First-time buyers are 27% likely to return, but after their second or third purchase, this grows to 54%

The familiar modern version of suggestion selling is upselling and cross-selling - the topic that we explore today.

In this article, we'll cover the fundamentals, effective execution, and important considerations for successful implementation.

Now let’s get into it!

Upsell

A. What is Upselling?

Upselling persuades customers to purchase a higher-value version of their chosen product or related add-ons. For example, if a customer adds last year's heels to their cart, an upsell would be showcasing similar but pricier heels from the latest collection.

B. Why Upselling is important

Upselling fosters stronger customer relationships while increasing revenue. Customers feel they're getting a better deal by focusing on premium options that deliver more value. This tactic is more cost-effective than acquiring new customers, as the probability of selling to existing customers is significantly higher (60-70%) than new prospects (5-20%).

Upselling contributes directly to increased Customer Lifetime Value (CLV), allowing businesses to invest more in customer acquisition. Higher CLV means each customer generates more revenue for your business without you having to invest anything extra, which also means your company has more money to spend on acquiring new customers.

C. When to upsell

Upselling thrives on positive customer experiences. Never upsell to a dissatisfied customer. Address any concerns promptly before suggesting upgrades. Focus on how the customer benefits, not just on the higher price. Here are optimal times to upsell:

Before Purchase: Display recommendations on product pages or sidebars. Consider using interactive tools to personalize recommendations based on customer intent.
During Purchase: Suggest upgrades through pop-ups or dedicated sections in the shopping cart or checkout page. Mini-carts are also effective for showcasing upsell offers without disrupting the shopping flow. However, be mindful of price sensitivity during checkout, as unexpected price increases can lead to cart abandonment.
Post-Purchase: This is a prime opportunity to offer additional items without affecting the original purchase. Post-purchase upsells, often presented on thank-you pages or in confirmation emails, capitalize on established trust and convenience. Personalized follow-up emails or SMS messages can further entice customers.

D. When NOT to upsell

Avoid upselling when:

The customer is expressing frustration or dissatisfaction.
The upsell is irrelevant to their needs or interests.
The price difference is substantial, making the upgrade seem like a pushy sales tactic.

E. How to upsell

Bestsellers

Upselling your most popular products and deals is a simple and effective way to boost your average transaction value and increase the stability of the revenue from your online store. Beyond the number of times a product is sold, also look at page visits and clicks to determine which products are most popular in your store.

Nuts.com upsell their bestsellers during the purchase process. This may be a risky move, but who can say no to those 3 beautiful and tasty nuts?

Customization

You know those “customize your product” features you get on some sites? Well, that’s a series of upsells, because every customization you add increases the price.

Daily offers

Daily offers are a great way to upsell and grab the attention of returning visitors. They are also an effective way of upselling featured products because they increase the sense of urgency and add a sense of exclusivity when the product is “limited” or available “for one day only”.

When creating daily offers, it’s worth reviewing your sales data to ensure you select the most profitable items and choose the best time to feature them as the “product of the day”. This method is widely loved amongst fast fashion and retail brands.

Extended Service Period

Sometimes, instead of a physical product, you can upsell by offering better value for a longer contract. And you can also offer better deals for early renewals. This works well for SaaS products.

Featured products

Since you define the criteria or rules for which products are displayed, upselling this way can be effective for online stores that sell many similar products. It’s also useful for eCommerce sites that are just launching and customer browsing history isn’t available yet.

New arrivals

It can be profitable when new arrivals are newsworthy. A lot of this depends on your target audience and the nature of your products. For instance, while promoting new arrivals is vital for fashion sites, promoting best-sellers or seasonal products may be more beneficial for DIY stores.

Tobi always has tons of collection items in new arrivals for recommendations to dazzle their shoppers.

Products viewed

When you don’t have a browsing history for a particular visitor, you can also use the browsing history of other visitors to feature products for upselling techniques. Promoting similar products that were viewed by other customers is one of the most effective types of product recommendations.

Product Protection

Another favorite upsell, both online and offline, is the “protect your product” upsell, which asks you to extend your warranty so you effectively guard your product against something going wrong. For example, if you buy a phone, you can often get a screen replacement warranty. Many retailers even automatically activate the shipping warranty for an extra $10 (which we find unethical).

Products with ratings and reviews

Customer reviews play an important role in a product’s popularity. If you find, based on your product range, that customer reviews are significant, this can be a great way to determine which products to upsell.

Similar to products that other customers have viewed, featuring products with reviews can increase buyer confidence. Ultimately, customer reviews can convince visitors to purchase a more expensive product that is recommended by other customers or receives higher ratings.

Seasonal offers

One thing you should keep in mind: categorize your products by season to take advantage of this approach. You can make this approach even more effective by offering a promotion on seasonal products.

Similar products

Another great way of upselling based on subjective criteria is to promote similar products. This solution, typically used on product pages, doesn’t require any special personalization, you only need to recommend similar items. They can be similar in terms of style, texture, material, product details, and many more - based on your attention to interpreting the product options.

You can get creative with the labeling for “similar products” modules to make them more eye-catching and unique, such as “If you like [product name], we recommend you try”

Anne Klein politely suggests their customers by showing them something they “may also like”.

Cross-sell

A. What is Cross-selling?

Cross-selling encourages customers to purchase complementary items alongside their original selection. For example, suggesting socks, insoles, or shoelaces when a customer adds shoes to their cart. Effective cross-selling anticipates additional needs and often leads to purchases the customer would have made eventually.

A golden rule of suggestive selling is: The more questions you ask at the front of the sale about the customer's wants, interests, needs, concerns, and desires, the better chance you will sell more to them.

B. Why Cross-selling is important

Cross-selling increases sales revenue, improves customer satisfaction, and strengthens customer relationships. While discounts associated with cross-sells might reduce individual product margins, they contribute to overall profitability by securing sales that might otherwise be lost.

Furthermore, cross-selling can generate leads through customer referrals, as satisfied customers are more likely to recommend your products or services. If you have loyal customers who are cared for, they will be the first to recommend your services to someone else.

C. How to cross-sell

Choose your cross-buyers carefully

Use predictive modeling and transaction data to identify customers likely to benefit from cross-sells. Avoid aggressive cross-selling to customers with a history of returns or excessive service requests.

How do you know whether your client would represent a likely loss for your firm as a cross-buyer? Usually, customers with histories of product returns, early terminations of contracts, or overuse of customer service channels, for instance, could raise red flags. To be more specific, you can identify them with the following signs:

They overuse customer service in all channels, whether it’s online, over the phone, or face to face.
They spend money, and then take it back, often through returns, or early terminations of agreements or contracts.
They only buy during sales promotions, and usually at steep discounts.
They never increase total spending—just spread the same amount of money among a greater number of smaller cross-purchases.

Use welcoming phases

Instead of throwing random collection items at customers, try phrases like:

Have you seen the new _____ we just got in?
When was the last time you tried on sandals?
Feel this fabric, isn't it so soft?
Can I get your opinion on this, we just got it in?

In all of these cases, you are suggesting other merchandise to the customer by using suggestive phrases.

Supplementary products / Products frequently bought together

Recommending supplementary products is a great way to cross-sell when you don’t have a customer browsing history by using the purchase history of other customers as the criteria for which type of products you cross-sell.

You can implement this using Boost’s personalized recommendation and predictive bundles. These features leverage historical data to create perfectly matching combos for each shopper profile automatically.

Related products

Cross-selling related types of products is just like cross-selling supplementary products. Related products may often be used at the same time as the product being viewed, but they don’t have to be used with the actual product.

FLOWER suggests you check out some related products as a cross-selling technique, including their lip color, lip mask and cheek color if you’re already eyeing up their petal eyeshadow.

Promote what customer also bought/viewed

More broadly than using products that were purchased together, you can cross-sell any types of products that other customers purchased, even if they weren’t in the same order.

Oftentimes, customers have similar buying habits or tastes, and this is a great way to take advantage of shared interests. This cross-selling technique is especially effective on checkout pages.

If you’re interested in a bright red cosy throw, IKEA suggests some similar-colored and matching cushion covers for you right underneath based on what others shoppers also viewed.

Promote additional items for (almost) free

Promoting further products for free or at a hugely discounted price is a great way to increase your sales and customer satisfaction.

D. When Not to Cross-sell

As incredible as it sounds, there are several cases where you shouldn’t implement cross-selling tactics. For example:

The suggested item significantly increases the overall order value, making it seem like a forced upsell.
The suggested item is irrelevant to the original purchase.
The customer has already shown resistance to additional offers.

Upsell vs. Cross-sell: The Main Difference

3 reminders for Upselling & Cross-selling

Ethics: Upselling and cross-selling are ethical when practiced transparently and with the customer's best interests in mind. Focus on offering genuine value and avoid deceptive tactics.
Effectiveness: These techniques work best when the suggested items are relevant, affordable, and enhance the customer's overall experience.
Potential Pitfalls: Avoid upsell fatigue and choice paralysis by offering a curated selection of relevant suggestions. Optimize mobile performance to ensure a seamless experience across devices.

What works with both Upsell and Cross-sell

Suggestion selling can come in various shapes and sizes, and here are some of the most flexible and efficient methods to apply for both upselling and cross-selling:

Package deals

By providing a package discount, you can motivate your customers to add more valuable items to their cart.

Provide free shipping

High shipping costs are the number one reason for cart abandonment. For this reason, free shipping is a powerful incentive for buyers to complete checkout. You can also use free shipping above a predefined amount to encourage customers to purchase a more expensive product.

Gift wrapping

While upselling your gift wrapping services may not provide a huge increase in revenue, it can increase customer satisfaction and help boost your average transaction value.

Personalization via customer history

When you have a customer browsing history to determine which products to feature, you can create even more personalized and effective offers to upsell your customers. For instance, you can highlight recently viewed products on your homepage, Shopify category pages, Shopify sub-collections and product pages. By using your visitors’ unique browsing history, you can offer them the most relevant items.

Bundling

Bundling is a widely-known descendant of upselling and cross-selling. The logic is simple: You bundle together the main product and other auxiliary products for a lower price than what the single product is sold for. Bundling is also often used along with discounts to increase the perceived value of the offering.

There are 2 types of bundles: Pure bundles and mixed bundles. Pure bundling is when products are made available only in bundles and cannot be bought individually. Mixed bundling is when both options (individual buy and bundle buy) are made available.

Here’s a way you can use bundling: Specify a minimum order amount to qualify for free shipping. Customers who are looking to buy only one item are likely to switch to the bundle to raise order value and qualify for free shipping.

Frequently, bundling brings together related products that are of relevance to a customer. Buying them individually involves more decision making and more steps. Whereas through bundling, in one a customer can buy multiple products together.

Check mobile performance

Always review how your upsells and cross-sells look on mobile and tablets. While more and more purchases are made via smaller screens now, we should keep in mind that there is less space on the screen, so you must be picky when choosing items for display.

Conclusion

For stores looking to increase revenues, cross-selling and upselling techniques are straightforward to implement and efficient to record.

Although your goal should be to get more sales, make sure that your customers are having what they need to solve problems and reach their goals. Pay close attention to your target audience and how they are engaging with your product or service by regularly checking analytics tools like Boost Analytics. Use your data-driven insights to serve up personalized suggestion selling options designed to boost the profit margin.

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Ellie Ho

•

Content Marketing Specialist

November 12, 2024

•

5 min read

Upsell and Cross-sell techniques: All you need to know

Upsell and cross-sell using Predictive Bundles

Start your 14-day free trial

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