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When used correctly, upselling and cross-selling improve customer experiences and store profits.
This guide explores a variety of ways to implement cross-sales from a customer's point of view. We believe that the customer experience is what matters most.
Creating better experiences will naturally lead to more profits through both higher average order values and repeat purchase rates. If you area already familiar with upsales and cross-sales, you can skip straight to the upsale examples here.
What is upselling?
Upselling is a strategy aimed at increasing the dollar amount of a purchase. Upsales depend on providing more value, thereby making the more expensive item preferable to the less expensive item.
Typically, upselling uses comparison and persuasion to allow customers to purchase a more premium, valuable version of the product.
From a business perspective, upselling requires understanding what customers value. Once valuable product attributes are identified, products must be created that excel in those attributes.
Finally, these products are often offered at a premium to capture part of the increased value offered.
Above is a great illustration of how value created is split between the buyer and the seller. By creating more value, firms have an option to maximize for profits, customer value, or an in-between approach. Image credit.
What is cross-selling?
Cross-selling is a technique aimed at increasing the number of items a customer purchases via complimentary goods.
Sometimes cross-sales are combined into a single bundle, with the business providing a discount for purchasing all the items.
eCommerce stores most commonly use cross-selling on PDP pages via personalized product recommendation widgets. Alternately, brands can use merchandizing techniques to group complimentary products together.
Above, Fashion Nova uses merchandizing to create custom "shop the look" product recommendation widgets.
What is the difference between upselling and cross-selling?
While similar, upselling and cross-selling refer to two distinct tactics.
Upselling aims to replace the item being purchased with an item that is more beneficial for the business to sell (typically this means higher profits, but could also be items that need to rotated out or are about to expire).
In contrast, cross-selling refers to a strategy of adding on additional products that compliment the one being purchased.
These strategies can be combined into specific tactics, such as bundling. In one sense, it is an upsale because the customer is no longer purchasing the original item being considered. In another sense, it is a cross-sale because the bundle is combining multiple, complimentary products.
Above, Home Depot offers both a protection plan as well as instillation services as possible add-ons. This is an example of a cross-sale, because the items are in addition to the original item.
Upsale and cross-sale examples
Below is a collection of upsale and cross-sale examples from top eCommerce brands, including Disney, Wayfair, and Etsy.
1. Using bundles as the perfect upsale ft. Disney
Disney is an excellent example of how to use bundling to upsell customers.
Already having possession of both Hulu and ESPN+, Disney was able to bundle all products together and take advantage of the now almost 40mm Hulu subscribers and 10mm ESPN+ subscribers.
Combining offers has an added benefit of increasing the perceived value of an offer. Typically, the bundled price is lower than the sum of the individual products.
Below, Disney CEO Bob Chapek speaks to the opportunity bundling has created for the firm.
"one thing that continues to impress us is the opportunity to have the bundle in the U.S. be even larger." - Bob Chapek, CEO Disney
And how bundling helped reduce churn from planned price increases.
"these were our first price increase since we launched. I have to say that we're extremely pleased with how the market reacted to both. In the U.S., we've not observed any significantly higher churn rate" - Bob Chapek, CEO Disney
2. Using dynamic content to feature upsales ft. Walmart
Dynamic content is a flexible tool all eCommerce stores should use. Above, Walmart uses dynamic content to populate an upsell widget based on product attributes.
Note how Walmart incorporates user generated data in the widget to help validate the added benefit by upgrading to the higher priced item.
3. Leveraging search history to power cross-sales ft. Etsy
Category pages are often under optimized. Above, Etsy does a great job aiding customers in their product discovery.
Using behavioral search data, they populate personalized widgets offering a variety of cross-sales. The cross-sale selections are based not only on related searches, but also related product categories.
4. Creating product versions ft. Care.com
Product versioning is one of the most effective forms of upsales. It requires an understanding of what your customer values, and segmenting customers based on how much value they get from your products.
We covered how to effectively create product versions in our guide on eCommerce pricing strategy here.
5. Using warranties to increase AOV ft. Wayfair
Our next upsale example comes from Wayfair. Here they use a type of warranty to bundle alongside a purchase - a 5 year protection plan for $9.99.
These types of protection plans are an excellent way to increase AOV sitewide.
6. Take advantage of default settings ft. Papier
One powerful upsale example eCommerce stores can utilize in up sales are default settings. Numerous studies have shown the efficacy of the "default effect", wherein people tend to accept default settings more often than not.
Above, we see this used to great effect. While Papier's notebooks can come in both soft and hardback, the default is to the slightly more premium offering. Opting out forces the customer to select a less desirable product, imposes friction, and hides the "price savings" of selecting the softback option.
7. Create upsale choices/options ft. Simba
Another tactic to increase upsale conversions is choice. Here, two up sale options are presented to the visitor.
With this choice, a number of price tactics are used.
Upselling and cross-selling are important retail tactics. When used correctly, they have the potential to not only increase conversion rates, but also improve the customer experience.
In our opinion, the best way to implement upsales is through personalization. Below are further resources in how to better segment your customer base and dynamically create relevant, effective offers.
And, if you would like to see how Barilliance helps hundreds of eCommerce stores create better upsales and cross-sales, you can request a demo here.