Upsell marketing and Cross-sell marketingOne of the items I’ve heard plenty about during my time working in the e-commerce industry is how to generate incremental revenue for customers. One easy way to do this and that many companies fail to take full advantage of is cross-selling and upselling products on their websites. These types of offers are relatively inexpensive to market and have the advantage of being aimed at people who already are on your website and interested in your wares. But what makes a perfect cross-sell or upsell campaign and how do you execute it effectively?

What are Upsells and Cross-sells?

Before I go into how to create these particular promotions, I wanted to be sure that I give a clear definition of an upsell and a cross sell. An upsell is a marketing term for the practice of suggesting an additional product, typically a higher-priced replacement product or service to a customer who is considering a purchase. Up-selling usually involves marketing more profitable services or products, but up-selling can also be simply exposing the customer to other options he or she may not have considered previously when they made their decision on what to purchase.

Likewise, a cross-sell is a marketing term for the practice of suggesting related or complementary products or services to customers.

Upsells replace the product that the customer initially expressed an interest in purchasing with a higher priced product or product bundle whereas a cross-sell adds an additional product on to the order. The two terms are often used as synonyms because ultimately the goal is the same – sell the customer more!

1. Choose related products

The most effective upsells can dramatically improve sales when properly designed. They offer a product that is closely related to the product initially slated for purchase and work best when the key features of the products are aligned. For instance, trying to upsell someone from a basic antivirus to a $500 enterprise-level security suite probably won’t work very well as these are for two completely different customers. When deciding which products to list with an item for an upsell or cross-sell, always keep in mind the reason why that customer considered that item in the first place.

2. Limited Time Frame

Limiting the time that a discount is available often creates urgency and pushes the purchaser to buy more quickly. The easiest time to convert the sale is when purchasers have their credit cards in hand. Offering customers time sensitive offers to “purchase within the next 24 hours and get an additional 20% off” might be just the nudge customers need to make the purchase.

3. Limit the Options

Do not provide the customer too many product options with your promotions. Too many options can overwhelm a buyer during the purchase process and might cause customers to abandon their orders altogether. Limit the promotion associated with a product to one or two popular options.

4. Mix It Up

A cross-sell or upsell offer does not need to be another product. You can try using items like extended download service, maintenance agreements or priority support. These are great options as they’re typically higher margin products and services and might be something a customer would skip over during their buying process. Just be sure that the options you provide are related to the product in some way. Also, don’t be afraid to try different combinations with your products as some may work better than others. Finally, always be sure to measure your results. Having precise knowledge about what works and what doesn’t will allow you to make any changes that may be required.

5. When not to Upsell

Not every product needs an upsell. For example, if you have a high cost item and the upsell is small or unrelated, it is not always beneficial to upsell. Regardless of the upsell you will have a small percentage of abandoned orders. In most cases this abandonment is a risk worth taking, the only time it is not is if you are selling a high ticket item and the upsell is small or unrelated. Do not risk losing the order over something that would only deliver minimal return.

Creating upsell and cross-sell promotions are an effective way to boost sales from customers who are ready to buy. Defining creative, targeted promotions will drive your customers to make new and additional purchases they may not have made had they not seen your offers. Just make sure you follow these steps and your promotions will be set on a successful path.

Do you have any other tips for cross-selling and upselling? Let us know in the comments section below!