What are the two main ways to grow your turnover? Have more traffic on your website and increase your conversion rate, right? While both of these are effective, there is another way to increase your revenue by increasing the average order value.
A very simple way to achieve this result is to upgrade your products and offer cross-selling.
To better understand how to implement this strategy in your business, here are some things to know.
Why should anyone bother to up-sell and cross-sell?
The advantages are numerous:
- You will be able to significantly increase the lifespan of a customer.
- You will also be able to increase the average order value.
- Your turnover will increase.
- Your profits will also increase.
- You can then canvass more people.
According to Sucharita Mulpuru who works as an analyst at Forrester, product recommendations are responsible on average for 10 to 30% of an e-commerce site’s revenue. In 2006, Amazon revealed that 35% of its turnover was the direct result of a cross-selling and upmarket strategy.
What is upscaling?
Upmarketing consists of encouraging consumers to spend a larger sum by offering products that are more expensive than those usually offered.
What is cross-selling?
Cross-selling is the technique of recommending complementary products to a purchase. A helmet offered with an MP3 player for example. This technique can take different forms.
Offer additional services like insurance, technical support, or product training. Studies have shown that if you analyze the risk factor correctly, you can increase your profit by 40%.
All of this operates on the “just in case” phenomenon.
Amazon offers for example following a purchase to test a premium function or to have an additional guarantee.
Another form of cross-selling is creating packs. The latter consist of two or more products that complement each other.
These packs are most often found at reduced prices. The whole being worth less than each product purchased separately. This technique pushes consumers to buy several products when they had not necessarily had the idea of buying as many.
4 ninja techniques to get the most out of your upsell/cross-sell strategy
- Customers will be more likely to buy if both items (package and individual products) are available. According to research by Vineet Kumar of HBS, when the pack is the only option available, turnover drops by 20%.
- Show a slightly higher price for products that are immediately visible to customers. This technique allows higher sales of 4% on average, 20 times more than cross-selling.
- Offer your customers a solution that is unsuited to their needs so that they can clearly choose the solution that works. Having too many choices can paralyze the buyer and often lead to no purchase. Cisco studies show that 78% of shoppers use the Internet to shop and ensure they’ve got the best deal. According to the psychological phenomenon known as overconfidence, most people will stick to their first opinion.
- Add complimentary products at checkout. This technique increases sales by 3%.
Be sure to make the upscaling technique automatic. If you do it manually, you will never be able to adapt this technique to all customer behaviors which are different every time.
Skullcandy has therefore chosen to stop using Google Analytics and replace it with Adobe Marketing Cloud.
Despite a slight drop in traffic, they were able to increase their turnover by 30%.
Here are some tools that could help you in this process:
- Adobe Marketing Cloud
If you don’t think upselling and cross-selling are effective, you can try going to sites that use this technique to put you in the shoes of a regular customer.
Take the example of the company Beach Body. When you try to leave the site, you come across specific offers.
A strategy that had the effect of doubling their turnover.
Are you ready to take the plunge and try these techniques?
Tell us about your experience and don’t hesitate to give your impressions of these two methods by leaving a comment at the bottom of the article.