How to Grow Revenue with Upselling and Cross-Selling?

If you’ve ever shopped online and been shown related items or offered a better version of a product you were considering, you’ve experienced upselling and cross-selling. These techniques aren’t just clever tricks; they’re proven strategies that can boost your sales and enhance customer satisfaction. 

Let's explore how they can benefit your Shopify store.

What is Cross-Selling in eCommerce?

Cross-selling is when you suggest additional, related products to a customer who is already buying something. The idea is to offer items that complement the main purchase. For example, if a customer is buying a smartphone, a suggestion to add a protective case or a pair of compatible earbuds would be a cross-sell.

Cross-selling is a great way to increase your average order value (AOV) and customer retention. By offering products that fit well together, you not only sell more, but also improve the shopping experience, helping customers find everything they need in one place.

One of the most effective cross-selling tactics is creating bundling offers, such as “frequently bought together” or “shop the look.”

Some Shopify cross-sell and upsell apps allow you to create these bundles and display them on product pages. Here's an example:

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The app can also create a popup that appears when a customer adds an item to their cart. The popup can suggest related products that might interest the customer, such as a matching case for their new tablet or a charger:

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What is Upselling in eCommerce?

Upselling is when you encourage customers to buy a more expensive or upgraded version of a product they’re already interested in. Think of it as suggesting a premium model or an added feature that enhances the original choice.

Consider a customer looking at a basic laptop model. An upsell would be to show them a version with more storage and a faster processor, explaining how these features could better meet their needs.

The main goal of upselling is to increase revenue by persuading customers to purchase more expensive items, upgrades, or add-ons, thereby maximizing the value of the sale. However, it's crucial to ensure that the upsell is relevant to the customer's needs and genuinely offers additional value.

Creating 'Buy More Save More' offers using a Shopify upsell app is a straightforward way to apply upselling techniques in your store. This approach encourages customers to purchase more by offering discounts when they buy in larger quantities or choose higher-tier products.

Scope of Cross-Selling and Upselling

Forrester Research found that upselling and cross-selling account for 10-30% of e-commerce revenues. These strategies not only boost immediate sales but also enhance the customer's overall shopping experience, making them more likely to return.

Some of the world's largest companies have also successfully implemented these strategies. For example, Amazon's recommendation engine, which uses cross-selling to suggest related products, accounts for 35% of the company's total sales.

By incorporating upselling and cross-selling strategies into your Shopify store, you can increase your average order value, clear out slow-moving inventory, and improve customer satisfaction.

Top Tips to Implement Cross-Selling and Upselling in Your Shopify Store

It's very easy to implement cross-selling and upselling strategies effectively in your Shopify store using Shopify apps. But there are some tips and best practices that you should follow to achieve the best results.

1. Use the Right App

Use a Shopify app designed for upselling and cross-selling. This allows you to easily create and manage offers right from your Shopify admin. By using the right app, you can create customized offers that align with your store’s products and customer behavior.

2. Use Data-Driven Recommendations

Analyze customer data to understand purchasing patterns and preferences. Use this information to create targeted cross-sell and upsell recommendations.

3. Use Apps Creatively

Don't limit yourself to the predefined offers, like volume discount, product addons, and bundles that the upsell or cross-sell app offers. Using these predefined terms that come with Shopify upsell apps or apps for any other platform might limit you. Be creative!

For example, use volume discounting, “buy 2 get 1 free”, or “buy more, save more” offers to create the same upsell offers that Apple uses, even if you have only 2 products.

The same goes for product addons. Instead of using variations on Shopify products, create addon offers, such as extended warranty, gift wrapping, etc. In a cross-sell app, you can use rules and logic to show the exact add-on on every product in your store.

4. Focus on Customer Satisfaction

Ensure that your upselling and cross-selling efforts are aligned with enhancing the customer experience, rather than simply trying to increase sales. Recommendations should add value to the customer's purchase and experience in your store.

An almost perfect example of this is the McDonald's line: “Would you like fries with that?”.

5. Optimize Restored Data

Use existing data that you have received from previous purchases or research and try to optimize and enhance this data.

For example, you might find that customers frequently buy a particular laptop and mouse together, but the currently recommended laptop bag doesn't sell as well in combinations with the other two products.

With this cross-sell analysis setup, you can get insights into which products are working well together, then replace the bag with a different bag or another accessory, such as a keyboard, a stand, etc., that has sold well by itself.

6. Use A/B Testing

Test different upselling and cross-selling strategies to see which ones are most effective. Use the insights gained to refine your approaches.

Conclusion

Upselling and cross-selling are more than just sales techniques; they’re powerful tools to enhance your customers’ shopping experience and boost your store’s revenue. By implementing these strategies thoughtfully, you not only increase your average order value but also build stronger relationships with your customers.