Let’s start with establishing some fundamentals we can all agree on:
As an online store owner, you’re trying to make money.
Now, going from there, we ask ourselves – how can we make more money?
Well, we have two options:
- Make more sales (aka more orders)
- Increase order value (just as many orders, but more $ per order)
We’re going to be talking about option nr. 2. About how you can use cross-selling and upselling to sell to your existing customer base.
The difference between cross-selling and upselling
This terminology often gets confused, even among experienced ecommerce vets.
To make it easier to visualize, we’ll use the golden arches – good old McDonald’s, to figure it out.
Here’s the difference:
Upselling – selling your client a bigger, better or more expensive version of what they originally wanted.
Eg. Would you like to supersize your meal?
In ecommerce, we would be convincing the customer to buy something bigger, better, or more expensive. Like offering to upgrade their regular Get Shit Done mug to the large-sized Get Shit Done mug.
Quick upselling examples for online print product stores:
- For only $5 more, you can get a bigger cup.
- Upgrade your t-shirt to a “made in America” model
- Upgrade a small sized poster to a larger sized poster
- Upgrade your shipping to get the order faster
Cross-selling – selling additional items to your client, usually related to the product.
Eg. Would you like fries with your burger?
Cross-selling is a technique that focuses on adding more products to one order, thereby increasing the order value. In ecommerce, it would be adding products that complement the existing product.
Quick cross-selling examples for online print product stores:
- Add stickers (or small accessories like pencils, postcards, headbands) to your order
- Add 2 more items to unlock a 5% discount
- Similar designs you might like for the same product (eg. hoodie, mug, etc.)
- Same design on other products (“You like the yoga pants? Try the same print on a beach towel!”)
Now that we have a general idea of the difference between upselling and cross-selling products, let’s get into some tangible tactics that you can implement in your store to start increasing those order values.
Why cross-selling and upselling is mandatory for ecommerce
Getting new customers is hard.
Not only hard but expensive, too.
Think about it – to gain a new customer, you’ll be incurring expenses all around – in the Facebook ads that you’re using to attract new visitors, the time spent to create lead magnets, the discounts applied to lure in the fence-sitters.
In fact, Quicksprout founder and leading marketer Neil Patel found that it’s 68% less expensive to cross and upsell to existing customers than to try to convince new customers to take the plunge and make a purchase.
Meanwhile, selling to your existing customer base requires significantly less cost, and when done right, can account for up to 80% of your online store’s revenue.
Context Smith tells us “The probability of selling to a new prospect is 5%-20%. The probability of selling to an existing customer is 60-70%.”
Your customer is already primed to buy – you know this person is interested in what you have to sell, you’re not going to have to convince them from a cold sales perspective. All you have to do is give them a little nudge.
1. Offer small additions to the purchase
Once your customer has already added a product to the checkout, having them buy another, smaller, product is simple. They’ve already committed to making a purchase, you can easily have them add something smaller, like stickers, pencils, or postcard-sized prints to their order.
This psychology of it is that when you offer smaller things in relation to a more expensive thing, the less expensive one diminishes in value, and they’re more likely to buy it.
For example, if you go into a suit store and you start with buying a tie, which is priced at $60, you might find that expensive. However, if you start with looking at a suit, which is priced at $3000, the tie all of a sudden seems really reasonable, and a small purchase in comparison.
How to use this tactic:
- Offer small additions to a purchase (via pop-up) as soon as the product is placed in the cart. Make sure that it’s related and relevant.
- Offer smaller-priced items at the checkout – when the buyer sees their order in one lump sum, the added cost of a smaller item will seem reasonable and will be more likely to be added to the cart.
Use this tool:
Product Upsell by Bold – place a popup after a product is added to a cart
2. Use psychology to your advantage with “what customers also bought” suggestions
One of the most powerful biological driving forces for humans is herd instinct.
Our brains are hardwired to ease the mental strain of making decisions, thereby defaulting to decisions that have already been made by many others in the “herd” – it’s a form of self-preservation.
Though this was biologically designed to improve our survival rate, in modern times it has morphed into a peculiar strain of FOMO (fear of missing out). If everyone else has a fidget spinner, then you need a fidget spinner too. If everyone’s getting lob haircuts, so do you.
How to use this tactic: At the checkout, offer products that have also been purchased by others. Better yet – add user photos.
User photos act as social proof. Because, see? All the cool kids have this product.
Use this tool:
Personalized recommendations – based on client behavior, the algorithm will show your customer other options they’re likely to enjoy. This can be placed at the checkout.
3. Offer related products on each product page
This is possibly the most classic kind of cross-selling. Simply show them other products they might like, and Bob’s your uncle. It’s a simple process of letting your customers know about more products that are in your catalog that may pique their interest.
This technique has become a staple of product pages, and it’s possible that it’s already built into your store’s theme.
You can spice it up by also adding customer images as social proof, by splitting the recommendations between same design-different product, or same product, different design. Here, Startup Vitamins uses both.
Use this tool:
Cross-sell – hand-pick the related items you want to show on each product page
4. Segment emails for personalized product recommendations
Play the long game. Think about life cycles – both for your products, as well as your customers. What will happen to the product 6 months down the line? What will the customer likely be in need of?
Divide your customers based on different hypotheses, and send the segments offers based on what you foresee they might need.
Here are some ideas for segmenting your customers that you can upsell and cross-sell to later:
- Buyers who bought baby/kids clothes – offer a size up after 6 months to a year – the child has likely grown out of the previous size and would welcome a new one
- If the customer bought a t-shirt a year ago – then it’ll be worn out by now. Offer to buy a new, fresh one.
- Bought a t-shirt in the summer – offer a hoodie in the winter (and switch it around for Australians – they have summer during Christmas, and winter in July/August)
Use this tool:
5. Personalized Facebook ads with product recommendations
You can also cross-sell after the purchase, to boost repeat purchases.
This is where it gets specific.
Say you have a best-selling product.
Your goal now is to sell a related product to everyone who has purchased this best-selling product.
You’re going to sell to them by targeting Facebook ads to the people who have already bought your best selling product. The product you sell should be directly related to the original best-selling product – either with the same design but on a different product, or a different design on a similar product. You can also get more creative with your ideas, just make sure that it makes sense that your previous buyers would also like this new product that you’re offering them.
Startup Vitamins’ best-selling product is the Get Shit Done mug. What they could do is take everyone who has bought a Get Shit Done mug, and deliver Facebook ads that let those buyer know that there’s a new, bigger, Get Shit Done mug, or a Get Shit Done water bottle.
How to use this tactic:
- Export the emails of everyone who’s bought your best-selling product.
- Go to your Facebook ads manager and create a custom audience with these emails
- Target recommended ads to these people featuring a related product that they might like.
Not sure how to do that? Read this article for a step-by-step guide to creating a custom audience.
You can use this tactic over and over again for as many different products as you want – the sky’s the limit.
6. Use the Facebook upsell and cross-selling dynamic ads feature
Facebook has launched a new audience targeting option – upselling and cross-selling for ecommerce.
The feature lets you show advertisements for products that are related to what they’ve already purchased or viewed.
You can find the upsell and cross-Selling targeting options under “Product Catalog Sales” when choosing your campaign style.
Use the upsell targeting option to people who have viewed a product, but didn’t make a purchase. Offer them products that are in the same category, but at a higher price point.
Here are some ideas to get you started:
- If a customer viewed a regular mug, offer them a made in the USA mug
- If a kid’s t-shirt was viewed, offer kid’s leggings
- If a t-shirt was viewed, offer a hoodie
Use the cross-selling targeting option to offer another product to your clients, after they’ve already made a purchase. That way you increase the lifetime value of the customer you’ve already got.
Here are some ideas to get you started:
- If a skirt was bought, offer a dress
- If a framed print was bought, offer a pillow
- If leggings were bought, offer yoga pants
The Facebook upsell and cross-sell targeting options are simply another layer of upselling and cross-selling that you have in your arsenal to further convert your buyers and potential buyers.
7. Incentivize customers to add more products to their carts
If your goal is to increase the value of one purchase, simply give your buyers a reason to want to add more products. The idea is that if your customers reach a certain threshold, they’ll receive something in return.
Some common incentives include:
- Free shipping for orders over $x
- 5% discount if you add 2 more products to your cart
- Receive a free gift for orders over $x
Startup Vitamins incentivizes you to add more products to your cart to unlock a discount. Here you see a layover – as soon as you’ve added a product to your cart, you’re prompted to add one more for a 5% discount.
This also appears in the checkout portion of the site.
Tools to use:
Product Upsell – use it to place a popup after a product is added to a cart
Drastically improve sales by working on selling to existing customers
While getting more customers is one proven way to improve sales (check out this article, this one and this), you’ll be getting more bang for your buck by putting a focus on thinking about increasing the order value from your existing clients.
Upselling and cross-selling strategies range from in-store activities such as incentivizing increased cart sizes and related products, to off-site activities like segmented email marketing for expiring products and Facebook advertisements for related products. A combination of them has the potential to increase your store revenue by 80% – what’s there to lose?
Give them a try and let us know how it went!
And if you’re looking for more tips on how to launch your online store, check out our free ebook!