Every marketer knows that acquiring new customers is expensive. It is anywhere from five to 25 times more expensive to acquire a new customer than it is to retain an existing one.
That’s why it’s key to increase the average order and lifetime value of your existing customers, even if it’s their very first purchase. If you want higher revenue, you should invest in better cross-sell and upsell marketing campaigns.
One name probably springs to mind when you think about upselling and cross-selling in ecommerce: Amazon. While their recommendation algorithm can seem impersonal in today’s shopping climate, getting out ahead of the competition with their “customers who bought that also bought this” recommendation has led to success. Amazon says that cross-sells and upsells account for 35% of total sales.
If you’re still not sold on investing more in upselling and cross-selling strategies, think about this: an average of 1%0 to 30% of e-commerce revenues comes from the help of product recommendations.
However, if you’re going to do it, you need to do it well. Don’t recommend an umbrella to someone who just bought a pair of sunglasses, or a pair of sneakers to someone who just bought a children’s toy.
You need to be thoughtful about how you approach your marketing campaigns. These are the cross-sell and upsell strategies every B2C marketer needs to power their ecommerce brand.
What do upselling and cross-selling mean?
There is a subtle but important difference between upselling and cross-selling when it comes to ecommerce.
Upselling is selling a more expensive version of a product that the customer is going to buy or already owns. Take TVs as an example. Maybe your customer is looking at products with basic features, but your marketing campaign convinces them that they need a 4k, curved, smart TV of 70 inches. That’s what successful upselling looks like.
Cross-selling is convincing customers to buy additional, related products. Taking TVs as an example again, an example of cross-selling could be getting them to buy a soundbar or cable management product that perfectly complements the product they already purchased.
Effective upselling and cross-selling strategies
The key to effectively upsell and cross-sell to your customers is relevancy. If you’re recommending unrelated products that aren’t of interest, you risk annoying your customers. That’s why it’s important to implement personalized and thoughtful upselling and cross-selling strategies.
The key is to tailor all recommendations to each customer — the more personalized the better. Take the examples of sunglasses we mentioned earlier. If you take that purchase in isolation, you might try to cross-sell your customer a beach towel orflip-flopss. But if you take into account their purchases along with their browsing history and past shopping behavior, you might see that they were also looking at ski gloves. Or maybe they liked or commented on your Instagram post about skiing. This means you should instead be trying to cross-sell skiing-related products, not beach products.
You should also factor in any demographic data you have and any patterns you’ve seen in the past. For example, if you know a segment of your customers buys sunscreen every June, you could try to upsell them to a more expensive and high-quality product, or cross-sell them mosquito repellent or special sunscreen for the lips or face.
The more data you collect and unify on your customers, the better your recommendations will become. You need to combine all the data from all of your marketing systems, including your ecommerce platform, email marketing automation, and social media platforms, and more. Once you have that data in once place, you can get a single view of the customer. Then, use that data to inform your product recommendations.
With this data, you can send out marketing campaigns tailored to each stage of the buyer’s journey, whether it’s a cart abandonment email, a coupon to encourage a first purchase, or notification of a sale for loyal customers.
When you’re sending out these campaigns to encourage cross-sell and upsell, there are a number of factors to consider:
- How many products are you recommending, and what is the value
- What kind of information you want to include on the products, such as reviews
- How much more expensive is the product you’re upselling
- How you decide which products are complementary to each other
You can feed this information into your B2C CRM, and the product recommendations algorithm will do the rest, so you won’t have to manually pick products to cross-sell and upsell.
Brands that upsell and cross-sell well
There are already many B2C brands out there that are nailing cross-selling and upselling. Here are some of the best you can take inspiration from.
Sportswear brand Asics combines upselling and cross-selling in one fantastic cart abandonment email.
The company personalizes the email by showing the products already in the customer’s cart and asking them to complete the purchase. It also includes other best-selling sneakers options at the bottom (upselling), as well as cross-selling by showing a complementary product (running shorts). Asics also highlights an incentive for the customer to complete their purchase: free shipping on all items.
Online grammar checker Grammarly uses a softer marketing tactic to upsell its Premium account in this email.
The company added an option to upgrade at the bottom of its email newsletter with a report summarizing the customer’s usage of the product over the past year. Grammarly also provides an incentive for upgrading in the form of details of what the customer would have achieved over the past year if they had been using a Premium account.
The bottom line is that cross-selling and upselling should aim to help your customers get a better handle on your product options, as well as understand what other useful goods they can buy from you. But to do this successfully, you need to really know and understand your customers. When you know them, you can offer something they might want, rather than annoy them and encourage them to go elsewhere. Cross-sell and upsell marketing strategies aren’t easy, but when done well, they work amazingly.