Your ultimate guide to upselling and cross-selling with personalization

Did you know…

  • Using cross-selling and other marketing tactics increase sales by 20% and profits by 30% according to McKinsey.
  • 35% of Amazon’s revenue comes from upselling and cross-selling according to the online retailer.
  • Research from Amazon suggests that implementing upselling and cross-selling on a webshop can increase revenue by 10%.

What does this mean for you?

After you’ve done the hard work of attracting a customer and enticing them with the products or services they’re interested in, what’s the next step? Upselling and cross-selling. As you can see from these figures, upselling and cross-selling can help you to easily increase your average order value (AOV) without much extra work for you. All you need to do is show your customers relevant higher-end products, accessories or complementary products or services at the right time, and they will probably increase their purchase size as well generate recurrent revenue for you.

So, what exactly are upselling and cross-selling?

What is upselling?

Upselling is persuading your customer to purchase a more expensive alternative to the item already in their basket to increase your AOV and revenue. For example, this could be a higher-end product with more features or enhancements.

Successful upselling often uses comparison charts to show customers alternatives that may better fulfill their needs. This helps customers to visualize the potential value they will obtain from the higher-priced option, helping them feel more satisfied with their final choice and strengthening their relationship with you.

Examples of upselling include a car with a larger engine or metallic paint work, a newer or higher-spec GSM, and a discounted price when purchasing in bulk.

What is cross-selling?

Cross-selling is convincing your customer to purchase additional items in conjunction with the original item, for example, accessories that enable the original item to be used for longer or in additional ways.

In webshops, it is often used on product pages and in the checkout process, helping to generate repeat purchases. It also displays the range of the webshop’s portfolio to customers, showing items that the customer might not know you offered and highlighting your potential as the best retailer to fulfill a particular need in the future. Examples of cross-selling include a longer or more comprehensive warranty, spare batteries, and GSM accessories such as phone covers and screen protectors.

The challenges to upselling and cross-selling

While upselling and cross-selling can generate significant revenue increases, there are two main challenges that you need to overcome:

  • Relevancy – are your upselling and cross-selling recommendations relevant or are they adding friction to your sales channel? If they come across as too aggressive or pushy, they could turn potential customers off from their purchase completely.
  • Offer fatigue – how many upselling or cross-selling recommendations are you pushing at each customer? If it’s too many, your customer could be fatigued from it all, resulting in fewer actual sales. Bundling products can partially minimize this issue.

The role of personalization

Personalization can help with both challenges as it shows upselling alternatives and/or cross-selling extras that are relevant to the user based on their specific behavior, including previous purchasing and viewing history.

Smart recommendations generated by a personalization AI can also uncover long tail products to upsell or cross-sell that a manually curated list of products might not show. This potentially highlights a wider selection of your product range, encouraging customers to explore more of your catalogue.

Lastly, personalization can be used to show a specific offer to a specific customer at the right point in their journey. This increases the effectiveness of upselling or cross-selling, generating a higher AOV and increased revenues.

Utilizing personalization to maximize upselling and cross-selling

On their own, upselling and cross-selling can help your webshop to increase your AOV and generate additional revenue without requiring a lot of extra work. However, as Amazon’s research shows, the real impact comes from combining upselling and cross-selling strategies with personalization – which would your webshop prefer? A 10% increase in revenue thanks to implementing an upselling and cross-selling strategy or to utilize personalization to boost your upselling and cross-selling strategy and generate 35% of your revenue?

For us at Froomle, the answer is simple.
Contact our personalization experts or visit our website to discover more.