You must have already heard of cross-selling and up-selling which are the two most popular approaches helping to increase the profit of an online store. However, many tend to confuse these two types of selling techniques as sources on the Internet are not explaining them in sufficient detail.
For our new digest, we’ve collected the best Quora questions asking about these selling styles. We’ll explain how they differ and how you could apply them in your ecommerce activity.
Top Quora Questions on Top Selling Methods
Online merchants use their trusted retail selling techniques to attract more customers and increase revenue. However, stimulating new sales is not the only way to increase revenue.
One of the good strategies is to boost the average transaction cost. For this purpose, companies usually combine cross-selling, upselling, and down-selling. Using these different types of selling methods raises the average purchase price and improves the overall customer experience.
What is upselling and cross selling? How to use these tools correctly? We’ve collected the 7 best Quora questions about upselling vs cross selling to provide you with the necessary information and selling techniques examples.
Stay tuned, and you’ll learn how to cross sell, how to upsell products, what and whom to offer your products.
When it comes to boosting the revenue of an online store, the first thing that comes to mind is attracting additional traffic and increasing the number of customers. At the same time, there is another option which is
to get more from your existing customers.
Back in 2006, according to Amazon statistics, 35% of the portal’s revenue was provided by product upsell and cross sell. That’s why cross sells and upsells are regarded as the most useful selling methods for online retailers.
The definition of upselling is quite simple. It is a way to increase the average order value and, as a result, sales volumes. When a customer is looking for a certain product, the seller offers them a kind of upgraded version of this exact product, the product with improved characteristics and at a higher cost. For example, a higher quality product, from a well-known brand, etc.
At the same time, customer needs to be convinced that the proposed option is a more profitable option to purchase. An important point here: customers should be offered the same type of product that they were looking for.
To get a better understanding of what does upselling mean, imagine a customer who wants to buy a TV. Through the upselling method, you can offer the customer to buy not a “planned” 32-inch TV, but a 43-inch option.
Cross-selling means the sale of related products or services in addition to the main product. For example, in addition to a mobile phone, you can offer a case, headphones, and a memory card.
Cross-selling technique is to offer products that directly or indirectly complement the main purchase. In this case, it is not necessary to form kits and offer them to the buyer. You can build your recommendations based on the statistics of your other customers’ purchases (and call the section “People are buying with this product”) or based on the interests of a particular buyer.
Check out our article on the similar topic. We think it will be relevant to you.
The difference between these two selling techniques is in their definitions. To cross sale a product means to offer any other product that can be easily purchased together with the main one. This sales technique is used to get customers to spend more on related products.
The word “upsell” applies to almost any occasion where you offer a superior product. The meaning of upselling is to sell a higher-end, higher-quality version of a product that customers now own or are going to purchase at that exact moment. The enhanced version of the product has additional features that increase the ultimate value.
Online stores now can have access to various applications and plugins that can be used to help cross sell and up sell. NEKLO, as the official Magento partner and extension developer, has a useful tool already created for cross selling products in Magento-based online stores.
Featured Products extension by NEKLO
As a developer company of his plugin, we ensure that with Featured Product by Category Magento extension, you will power your cross selling strategies.
The plugin can show featured products on a Category page to give your customers a hint as to what else they can buy together with already selected products.
Why do our clients love it?
- It’s fully customizable. You can configure the widget the way it fits your online storefront.
- It’s easily managed. Native Magento widget functionality and settings make no problem to configure.
- It helps to grow sales. By showing your customers appealing photos of featured products, the possibility for more purchases increases.
Learn about one more strategy to boost sales in your online store. Read our article about pre-order marketing.
The human’s ability to make decisions goes down as the number of options increases. That is why it is important not to be excessive with cross selling and upselling techniques.
A good additional purchase proposal meets the following four requirements:
The product you offer should meet the customer’s requests. A good cross sell example here is to offer the batteries when they are buying a camera.
The product you offer souldn’t cover many product categories. A cross selling example, in this case, is to recommend chairs, lamps, organizers for writing utensils while the customer is searching for a writing desk. It’s not necessary to squeeze in 20 more categories and create information noise.
One of the key cross sell tips is to show offers at the right moment when a customer is “in the mood” to spend some money.
Offer an additional product:
- When the item is added to the cart;
- When a customer is placing an order (until the moment of payment);
- Within an hour after the order is placed, in a transaction letter with payment confirmation. Or, in a separate letter within 24 hours after the order.
- Optimal price
Remember, that an additional product you offer should not be more expensive than the main one. This suggestive selling technique presupposes that you can offer a case when a customer is buying a mobile phone but not vice versa.
To get the most out of cross selling and up selling strategies, you may also try the following ideas:
- Offer complementary products;
- Suggest service packages;
- Display an item you would like to cross sell on the checkout page;
- Draw attention to the “products frequently purchased together” section;
- Provide free shipping in case of buying a bundle;
- Analyze your customer’s purchase history before making an offer to make it more personal.
If you are interested in improving sales of your online store and advancing your ecommerce business activity, have a look at one of our previous digests, where NEKLO experts were answering TOP Reddit questions on Magento & eCommerce.
As we have already mentioned, some online retail giants manage to receive almost half of their profit on upselling and cross selling.
What are the cross selling and upselling tips those large businesses can suggest? We have collected a few.
Cross-sell with email marketing
Email marketing is an effective tool for increasing sales. Together with cross-selling, it turns out to be more powerful.
In emails, it is worth focusing on promoting related products from the same category. For example, a customer bought a mobile phone and after the purchase, they receive a letter with a selection of creative mobile phone cases.
Cross-sell emails can bring customers back for purchases over and over again. You can add a discount to your cross-sell offer. It might look like this:
“Congratulations on your new phone, this 20% off for all the cases will work great with it.”
Make sure the upsell products are no more than 25% more expensive than the original product. Analyze customer profiles and make offers based on their interests.
To make customers have a look at the products a bit more expensive than the ones they initially wanted to buy, you can create the following sections:
- Recommended products;
- New arrivals;
- Seasonal offers;
- Daily offers;
- Similar products;
- Viewed products;
- Products with customer reviews.
However, not only cross-selling and upselling help to sell more. Discover what NEKLO experts believe can damage the conversions and check your website.
What’s the best Magento extension for upsell and cross sell products by category and customer preferences?
Owners of Magento-based online stores can use a reliable tool for applying upselling or cross selling techniques. The use of existing plugins provides an opportunity to increase the profitability of your website as well as customer loyalty. No need for employee involvement.
As an expert in Magento ecommerce development, NEKLO has a number of powerful modules to help you increase sales through upselling and cross selling.
We have prepared a detailed description of our related products in our article How to Raise the Number of Orders Through Cross-Selling.
Additionally, you can opt for building a custom Magento module from the ground up in case existing ones are not enough for your specific web store or you can’t find one for your needs.
Conclusion: There’s Actually No ‘Best’ Retail Selling Technique
Attracting new customers to a web store is important. However, for those who have already come to your online store, it is much easier to settle for a larger purchase and a higher check. They already have confidence in your products or services.
When applying the upselling and cross selling techniques, remember that the main task here is not to additionally sell anything. The task is to offer the product the customer needs at that very moment. Do not pressure your customers, otherwise, there is a risk that they will just leave. Make your recommendation feel like you care.
In case you have doubts about applying selling techniques properly within your ecommerce marketing strategy or you would like to enrich your Magento store with plugins for cross selling and upselling, you can always turn to our consulting and support services.
Or, simply contact us through the form on our website and our specialists will find the solution for your ecommerce issues.