How many hours a day do you spend on planning of marketing strategies for attracting prospect customers for your online store? If you are an online merchant we are aware that your mind is busy thinking about:
- „How can I sell more?“
- „How can I optimise my ads so I can spend less and make more sales?“
- „How can I earn the trust and attract the attention of my customers so they can buy even more?“
- „What steps should my marketing funnel have and am I missing on something?“
Often the online merchants focus on attracting new customers while the statistics show that the additional sales is what affects the growth of one’s business.
Lets see the numbers:
- According to Oracle, 65% of a business’s income comes from existing customers.
- According to PwC, the business spends 16 times more on attracting new customers instead of focusing on retaining the existing ones.
- According to PwC, the business spends much on advertising but 65% of the customers say that personal attitude is what attract them more.
You are probably wondering which are these marketing techniques which lead to such results. They are called Upsell and Cross Sell.
And because attracting new customers requires more efforts and resources compared to converting the existing ones into loyals, the return of investments from Upsell and Cross Sell is remarkable.
In this article we will tell you in detail about:
- How Upsell and Cross Sell work?
- What are their opportunities?
- How can you add them in your marketing funnel?
- And the most important one – how not to worry about how and where to find these techniques to use in your online store, because all merchants at CloudCart can use these opportunities for free. This is our newest functionality, which we will tell you about.
What is Upsell?
Would you miss the chance to convince your customers to spend more money on a product than they would initially be willing to spend? We doubt that. They can actually spend more thanks to this marketing tool, which we will talk about!
We are even convinced that you yourself were a “victim” of such a “trick” and not only did you not resist, but you were satisfied!
Imagine that you want to go to a concert of a favorite artist. You decide to buy a ticket online, add it to the cart and receive a message that you can buy a second ticket at half price.
The offer is attractive and accompanied by well- structured marketing text which says: “You just can’t miss the chance to share this with your beloved one! Buy a second ticket for half the price. Half for your Half!”.
If you buy the second ticket, the merchant has managed to achieve his goal – to increase the price of the final purchase, while you do not mind it because you have left the online store with the feeling of being a winner – both emotionally and financially.
This marketing technique is called Upsell and can be used for a range of different products – from food to automobiles. Because the customer wants to buy not just an extra product, but a cheap extra product.
The Upsell aims to make the main purchase more expensive thanks to an upgrade or a discount. In other words if the customer is willing to buy a product from your online store, you can use the Upsell by offering an upper quality and price range product.
The customer is willing to buy a better product if the difference in price is “bearable” for him. And what is a “reasonable price”? One that justifies the value of the product.
The better you present the product, the more willing to buy it the customer will be. However, keep in mind that the price of the new product should not exceed the price of the old by more than 25%.
Upsell brings incomes and reduces the costs
You know that to bring a user to your online store, you need time and knowledge to plan an ad, as well as money to implement it.
It would be a waste of time, energy and money if you do not take advantage of the opportunities of Upsell by offering the new user the best product for him, which will also bring more revenue for you.
Remember that attracting new customers is expensive (10 times more) than selling to an existing customer.
Plan your messages and the presentation of your product which will be offered to the customer. They should be both emotional to attract the user, and rational – to defend your argument to him. This means you should know your products in detail in order to be ready to answer any possible question about them.
Kinds of Upsell
Upsell with a similar product
It is suitable for products that have a long-term investment such as equipment. Take an example with a laptop. If a user enjoys a particular laptop model, you can offer him an upper quality range with more functionality and, accordingly, at a higher price. What is important here?
- Describe in detail the features of the laptop you will offer – its advantages.
- The price should be tempting, ie. one that does not exceed the price of the laptop selected by the customer by more than 25%.
- Think about the marketing message that will make your customer look at the laptop you offer him.
Upsell with a discount
Suitable for products used regularly:
- Food supplies, etc.
Let’s take an example with cosmetics. If your customer enjoys a hair shampoo or face mask, you can offer him a second product (shampoo or mask) with a specific discount.
Initially, the customer does not intend to buy a second product, but this offer seems “irresistible”, which brings you an additional profit. The benefits for the customer are great, especially if he is a regular one.
What is important here?
- To divide your customers in “new” and “regular” so that you can offer a discount that will appeal to the particular customer and at the same time will be a good option for you.
- The discount can also be in the form of “free delivery”.
- Think about the marketing message that will make your customer literally grab the product at a discount.
Upsell with additional service
Suitable for products that need maintenance. If we go back to the example with the laptop – instead of a better laptop, you can offer laptop support at a discount. And you can offer both a better laptop and a discounted support.
The second option is a “double upsell”. You can come up with other combinations to make the customer spend more money and at the same time get extra value from the final purchase.
What is important?
- To know the products in detail and all possible additional services that apply to them.
- To be able to offer an additional service to each product.
- Think about the marketing message that will make your customer benefit from the discounted support.
What is Cross-Sell?
When we talk about cross sales or Cross Sell, our team has a favorite joke that we often quote:
A country boy is applying for a job at a large department store in New York. The boss appoints him on probation. His first working day is long and tiring. At 5 pm, the boss asks the kid how many sales he has made.
– Only one – the boy says.
– How can you make only one? – says the frustrated boss.
– Most merchants make 20-30 sales a day. And how much money did you bring?
_ $ 333,334.
– How did you do that? – asks the boss.
– Well, a man came, to whom I sold a small hook first, then a medium hook, and finally a big hook. Then I sold him a small rod, a medium rod, and finally a large rod. I asked him where he was going to fish, and he said, “In the ocean.” I took him to the booth and sold him a scooter. He was worried that his Volkswagen would not be able to tow the scooter, so I took him to the car department and sold him a jeep.
The boss took two steps back and exclaimed in surprise:
“You sold all this to a man who only asked for a hook?”
“Oh, no,” said the boy, “he came to buy his wife’s tampons, and I told him, ‘Your weekend is ruined anyway, why don’t you go fishing?’
If we have to name the used system for additional sales, it is called Cross Sell. Simply, Cross Sell is the sale of additional products, ie. those that have a logical connection with the product chosen by the customer. The main purchase is more expensive, but the accompanying ones are just as important for online merchants.
If with Upsell the goal is to offer a product that is an upgrade version of the one chosen by the customer, then with Cross Sell we offer a product that would be a supplement to the final purchase.
Always offer your customer the option of additional products, as in many cases he doesn’t know he needs them. With this marketing tool you can increase your sales, while the customer is satisfied that you have “reminded” him of an important and necessary product.
The Cross Sell tells your customer you offer these products as well, which is a guarantee that he will contact you when he needs to.
Types of Cross Sell
Additional Cross Sells
This is the most common version of a Cross Sell and is related to the offer of an additional product that complements the value of the product selected by the customer (for example, if the customer wants to buy a phone, you can offer him a headset).
Seasonal Cross Sells
In this version of Cross Sell, the time of the year in which the customer buys must be taken into account. For example, if he wants to buy a toy in December, you can also offer him wrapping paper, as it is very likely that the toy will be a Christmas present.
Promotional Cross Sells
This version of Cross Sell draws customers’ attention to goods that are currently on sale in your online store, but still related to the product that the customer has chosen to buy.
All CloudCart customers can now use the Upsell and Cross Sell technology for free. All you have to do is link your products to their corresponding products and choose the page on which the Upsell or Cross Sell will appear.
When to use Upsell and Cross Sell and which type to choose?
It is known that you can sell almost anything through Upsell for any type of store, if you approach customers non-aggressively.
The question of WHEN to approach Upsell for online stores often remains unclear.
There are few reasons and situations in which you can choose to do it:
- When you have several price ranges of a product (cheap, medium, and expensive). Then you can use Upsell at a discount to those of a higher price range.
- When it comes to a service that offers multi-level plans for its customers, you can use Upsell with a similar product or to offer better conditions of the plan.
- When customers are in the initial buying process or somewhere in the middle. With Upselling you can inform your customers about the options they have for the product as an upgrade. Then you can use Upsell with an additional service.
These are just a few of the situations where it is good to offer an Upsell.
And what about Cross Sell in the online stores?
- As we’ve already mentioned, Cross Sell is similar to Upsell, but with a slight difference – you inform the customer about additional products and services with Cross sell. When should you use it?
- When you have only one product that is suitable for the customer’s needs. Then you add an additional product to make the use of the original more convenient / easy.
- When you have frequent cases of unfinished orders. This happens when customers add an item to the cart and forget about it. You can add an offer for something extra to each purchase to encourage them to complete it.
- For email campaigns for customers who have already placed an order. You can send them an email for a discount on their next order with a special promo code.
- When customers are in the final stage of the buying process. As soon as the customer chooses a product, you recommend something extra. If a certain holiday is approaching, you can always try the seasonal Cross Sell.
An example of a successful Upsell offer from a CloudCart merchant
If you have more products you can set different types of offers, which will help you convince your customers to spend more which will result in more income for you.
If you want to make Upsell offer, this article can help you. It is about a specific example from a CloudCart retailer who have used the marketing technique and therefore – gain perfect results.
If you are wondering what results you can achieve with a Cross Sell offer, we recommend you read this article, from which you will find out how many times has the retailer increased his income, using the marketing technique.
If you are a trader on another platform and the use of marketing techniques to increase revenue requires too much resource and time, but you want your business to grow and develop, supported by innovative marketing tools, then come to us!