Up-selling and cross-selling are proactive selling techniques that motivate your customers to spend more of their money during their shopping. Cross-selling techniques improve sales encouraging customers to buy more products. Up-selling techniques encourage customers to buy more expensive items by suggesting premium products or upgraded versions of the product that they are currently viewing. In other words, cross-selling increases the number of purchased items while up-selling boosts the value of each purchase. During up-selling you get your customers thinking about upgrading the products they are viewing by suggesting alternative premium products of higher value to them. The key phrase is “Higher value” since up-selling should not be considered as a smart way of improving your sales, but as a service that improves customers’ shopping experience by providing additional value to them while increasing your ecommerce site’s sales. Some companies avoid up-selling because they’re afraid their customers may get irritated and not buy at all. Contrary to that, we found that customers appreciate your thoughtfulness in offering them an added benefit they didn’t know about. It shows them that you are interested in their interests. The key to effective up-selling is putting your customers’ needs first by adding value to the customer shopping experience with your recommendations.
Key factors that contribute to successful up-selling
Added Value: Make clear to your customers the value and the additional benefits of the product or service you are trying to up-sell. Think of up-selling as a win-win practice that benefits both you and your customers.
Relevancy: In other words, the premium products recommended must be of the same type of the products the customer intends to buy. Use header text like “Related products” or “Other customers bought these offers”.
Placement: Within your ecommerce web site there are many areas where you can make up-sells, but the most typical ones are: product page, shopping cart page and checkout page. Although up-selling is a great marketing strategy, it should never supersede the primary goal of the page. For example, many marketers argue that up-selling during checkout may result in site abandonment since it interferes with the main objective of the check-out page!
Urgency: Make your customers think that they might miss a great deal if they do not buy immediately. Create a sense of urgency by setting time restraints on up sell recommendations, for example “Offer Ends Soon” or “Offer for this week only”
Scarcity: Create a perception of a shortage of the up-selling products in order to entice your customers to purchase out of fear that they may not be able to get it in the future, for example Amazon.com effectively creates urgency by listing product availability data “Only 2 left in stock – order soon!”. Scarcity creates a sense of urgency in the shopper; even if it's just on a subconscious level (i.e. “Buy now - sale ends today“).
Credibility: Create trust and credibility for your up-selling items by providing ratings and recommendations from customers or experts. Showing other people ratings and reviews on a particular product is effective. The more people positively comment or rate the product the more your customers will be influenced to buy.
Successful up-selling requires good knowledge of your customer’s needs and habits along with personalized shopping experience. The more you know about your customers the more informed decisions you will make about the up-selling products and services, and the up-selling strategy that you will use. Apply up-selling as an additional service to your customers that improves their shopping experience and their satisfaction.