Before exploring different approaches and examples of upselling and cross-selling, let’s start with the terminology.
What is upselling?
By definition, upselling is a sales technique designed to motivate customers to spend more. How does it work: when a customer shows interest in some product or service, they are shown an additional offer relevant to what they’re looking for. This offer can feature virtually anything: from similar products to upgrades to gift packaging.
Upselling is often used as an umbrella term that includes different techniques, cross-selling in particular. To avoid any confusion, let’s straighten out all the approaches and define upselling along with cross-selling, down-selling, and bundling.
- Upselling means offering customers a better, more expensive variation of the same product. For example, if you are selling an iPhone and a customer selects 64 GB, you can offer a 128 GB one as an upsell. If the customer agrees to the offer, the original product in the cart is replaced with an upgraded one. Given that the term “upselling” has got a broader meaning, this technique is sometimes referred to as a “true upsell.”
- Cross-selling means offering products that are somehow relevant to the one chosen by a customer. For instance, if you are selling an iPhone, you can offer extras like AirPods or a protective case. In this case, the original product stays in the cart, and if the customer finds your offer attractive, new products are simply added to the cart.
- Down-selling means, contrary to upselling, offering customers a cheaper product when they abandon their cart. It’s a relatively new approach that isn’t yet very popular with Shopify merchants. Recommending similar products within a more affordable price range can be effective and bring you new customers.
- Bundling (Frequently Bought Together) means combining several products into one offer for a discounted price. If you are selling an iPhone, you can offer it with additional products (like AirPods and a case) as a bundle that costs less than all three products combined individually.
Upselling vs. cross-selling: which is more effective?
Upselling can be a more sustainable option, especially when it comes to subscriptions and regular purchases, but it’s way more limited than cross-selling. With the latter, you can try out multiple options and be creative as much as possible.
So, there’s no universal answer to what sales technique performs better: you need to experiment with it applying to your particular business and see what works for you.
Why bother? The major advantages of upselling and cross-selling
There are numerous benefits to upselling, including the following:
- Unit economics growth. Unit economics revolve around calculating how much profit you get from each individual order (unit). By convincing a customer to add another product to the order, you’re getting higher profits than if the same additional product is purchased separately because associated costs don’t change. Whether it’s an upgraded item or more items in a single order, you don’t spend more on shipping, packaging, and marketing—thus, the profit per order grows, and so does your store’s sustainability.
Let’s say the price of the product the customer chose is $100, and if we exclude all manufacturing, delivery, and marketing costs, your profit from the order is estimated at $10. The additional product offered as a cross-sell costs $10, but it gives you a more significant profit percentage because you only need to take into account its production costs (let’s say $5). As a result of the accepted deal, you receive a profit worth $15 instead of $10, which is 50% more.
- More affordable revenue boost compared to new customer acquisition. Research shows that the chances of selling to a new prospect are significantly lower than to an existing customer (5-20% compared to 60-70%).
Today’s e-commerce landscape is too competitive in customer acquisition, and the easier way to increase revenue is to offer relevant offers to people who already know your products or services. Shopify’s survey demonstrates that the average customer acquisition cost can reach $300 and higher, while with an upselling or cross-selling strategy, you’re only paying for the resources needed to place your offers on a website.
For example, you can pay a $100-worth monthly subscription for a Shopify app that lets you automate upsells and cross-sells and generate thousands of dollars of extra revenue almost instantly. The merchant DFTBA earned $6,300 more in just three weeks using our upsell app Candy Rack.
- Increased AOV and CLV. If done right, cross-selling and upselling products brings higher average order value and customer lifetime value. These are obviously not the only metrics you need to track to analyze your store’s performance, but they are extremely important, especially in the context of high-intent customers.
- Improved relationships with customers. Upselling and cross-selling are not just about selling more: you won’t achieve the desired results if you’re not thinking about providing value with your additional offers. The essence of upselling is thinking one step ahead of the customer and suggesting what they really might want or need. This way, you’ll be building loyalty and trust.
You might even offer free products or services in your upsell pop-ups. This won’t bring you extra revenue right away but will show customers that you care and motivate them to return to your store.
For instance, the manufacturer of in-drawer outlets, Docking Drawer, used our app Candy Rack to offer installation manuals and product catalogs as free extras to orders. The company is confident that cross-selling such informational resources for free leads to improved relationships with customers: the merchant helps people learn more about product features and capabilities so that they are more satisfied with current purchases and have more reasons to buy more in the future.
Now, as we know what the major cross-selling and upselling benefits are, let’s explore all the different types of deals you can create to entice customers.
Different approaches to cross-selling and upselling
Upsells vary depending on the nature of the offer (we’ll cover this in a bit) and the stage of the buyer’s journey they are presented at. Based on how the offer is shown to customers, upselling techniques can be divided into:
- Soft methods: it’s a very gentle way of offering upgraded or extra products that doesn’t distract the customer and doesn’t add an extra step to the conversion funnel. The offer can be shown on product pages, in the cart, or during checkout. It’s usually placed in a separate block below the product description or shopping cart: Amazon’s Frequently bought together or Asos’ Buy the look are examples of so-called soft upselling.
- Pop-ups: this approach shows the offer in a separate window and tends to be the most effective one. There might be passive pop-ups that feature some products but don’t require user interaction (customers can proceed with their journey without clicking on the window) and active pop-ups that only let customers continue browsing if they accept or decline the offer. We use the latter type in Candy Rack and other upsell apps but in a non-intrusive way: for instance, when a customer adds a product to their cart, the upsell or cross-sell offer is displayed in the pop-up that confirms the added product; whether they’re interested in the offer or not, it takes a single click to close the pop-up and continue shopping.
- Live chat: merchants can upsell customers in direct communication, via a live chat. It takes more time and resources, as you need to have a live chat widget and support specialists ready to promote additional offers, but it’s proven to be helpful in driving revenue: consumers are 2.8 times more likely to make a purchase if they’ve had a live chat conversation.
- Emails: this is another powerful channel for upselling your customers. You can pitch relevant extra offers in order confirmation emails or try down-selling in abandoned cart emails.
The great thing about upsell pop-ups and soft techniques is that they can easily be automated. With the right upsell app for Shopify, you can set up multiple offers in a matter of minutes and get a boost in sales of up to 30%.
It’s also about the right timing
It’s essential to know when to upsell your customers. Based on when the offer is displayed, there are pre-purchase and post-purchase upsells and cross-sells.
As their names suggest, pre-purchase offers are featured before checkout—when customers are navigating through the website and adding products to their cart, while post-purchase offers happen after an order has been placed. You can learn more about the differences from our article on pre-purchase vs. post-purchase upsells.
Both pre-purchase and post-purchase offers can be used at different stages of the funnel, and it’s vital to understand (and experiment with) what types of deals work best at each stage. For example:
- Product page upselling and cross-selling. Speaking of soft ways to sell more, cross-selling deals are more helpful. You can feature additional offers even prior to customers clicking on the add-to-cart button.
When people are just browsing through your catalog, you can already grab their attention with the Featured products section: this is the chance to distinguish the most popular items and show them to visitors who weren’t looking for those specifically but might get interested. In turn, when customers are exploring a particular product page, you can attract them with the block of similar or related products.
What is even more relevant than a similar product is a useful addition to a given product. For example, it always makes sense to cross-promote chargers, cables, and relevant accessories on electronic device product pages. You can offer single or multiple-choice add-ons next to the product description or in a separate pop-up that appears after the customer adds a product to the cart.
We developed the Candy Rack app specifically for product page upsells and cross-sells. You can choose among a dozen templates and customize your offer: decide what products or collections will trigger the deal and set additional conditions for product price range, vendor, etc.
- In-cart upselling and cross-selling. When a customer adds something to their cart, they have a bigger motivation to buy not only this particular product but also what might come as an addition to it. This stage of the purchasing funnel gives you the maximum flexibility in creating extra offers: you can go for product upgrades and add-ons, as well as different warranty options, gift wrapping, and other services.
Don’t limit yourself to paid options and think about free extras if they fit your business. For instance, you can offer free samples, which might work as a final push in motivating the customer to complete the current purchase and return in the future.
To automate cart page deals, you can use the Candy Cart app. It allows you to set triggers and customize the messaging in any way you want. The offer itself will be shown in a pop-up window when a customer clicks on the checkout button on the cart page.
- Checkout upselling and cross-selling. At the checkout stage, customers are determined to buy what they’ve chosen so premium services, especially time-sensitive ones, will be the best fit.
With Digismoothie’s post-purchase upsell app Last Upsell, you have two options: use a pop-up that appears after the order has been placed or create a separate page displayed before the transaction.
Note that even if you show the offer after the order was paid for, the app doesn’t create a second order but extends the existing one. It’s more convenient for shoppers and it’s easier for you in terms of analyzing upsells’ effectiveness.
We’ve already mentioned some of the types of deals you can create but now, let’s put up a complete list of different upsells and cross-sells.
Types of cross-sell offers
- Complementary products. It’s essential to understand the context of product usage and come up with suggestions that are actually helpful to the customer. Pitch items that usually go together, like toothbrushes with toothpaste or batteries with analog devices.
- Premium services. The list is endless here: you can add extended warranties, gift packaging, first-in-line order processing, or anything else. Upsell and cross-sell apps like Candy Rack provide you with a dozen templates where you can set and customize various offers, even including the extended time for gift returns.
- Extra features. If your store specializes in custom-made products, like wooden furniture and home decor, you can offer shoppers a possibility to personalize their items for an extra price: change the standard size, add their name or logo, etc.
- Free samples. We’ve already discussed that it might be beneficial to create free cross-sells. This is a way to get customers more aware of your products and interested in those they don’t have yet.
- Donations and tips. If your business supports any charity causes or organizations, you can ask customers to donate among other cross-sell offers. It can increase the level of trust attributed to your store and give you a competitive advantage among the shoppers who share the same values.
Finally, you can also ask customers to leave tips: this might be appropriate for hand-made, one-of-a-kind products and services that have a personal touch. By the way, tipping can be natively integrated into Shopify checkout. Learn how to enable tips in your store from our post.
Types and examples of upselling offers
- Upgraded product. The most obvious type of upselling is a higher-tier version of the same product. But it doesn’t end there: you can offer higher-quality items even if they are not a variation of the chosen one. Let’s say your store features different headphones: if a customer chooses the model without Bluetooth support, you can upsell better headphones from the same brand or a completely different model that does support Bluetooth.
- Increased quantity. The buy one get one technique (BOGO) is a proven success among merchants. Reports claim that over 90% of consumers have responded to BOGO offers at least once. You can offer a second product for a discount or even come up with a whole system of discount deals where the more items are added, the cheaper they get. It might not make sense when a shopper buys something one of a kind and long-lasting, like a sofa, but it can be effective with products that are bought frequently or require a pair to be used together with someone.
- Subscription. The subscription model is widely used in the world of software solutions but is getting increasingly more popular with merchants from various industries, and is often claimed to be “the future of retail.” There already are many successful examples of subscription boxes with clothes, books, and other items that are curated and personalized for each customer.
It might be helpful to offer subscriptions for products that are bought repeatedly, like groceries or hygiene products: this way, you’ll secure a range of future payments and eliminate customers’ worries about running out of something or forgetting to buy something on time. Or, if you have both hardware and software products that are compatible with each other, you can cross-sell a software subscription in each device purchase.
The major things to consider when upselling
For detailed information on the best industry practices, check out our upselling guide. Here, we just want to summarize the basics that will help you get the most out of cross-selling and upselling opportunities.
- Relevance and personalization: the key to successful upselling and cross-selling is offering customers what they might actually need.
If you don’t have time to choose the best suitable cross-sell for each available product, you can leave it to the app. Digismoothie’s upsell apps include the Smart Auto-Upsell template that uses Shopify’s product recommendation API and automatically selects the most relevant offer based on what was added to the cart.
- Reasonable price range: when cross-selling, choose extra products that won’t significantly change the total cart value. It also makes sense to separate target groups by spending and pitch more expensive products to those who add more to their cart.
For instance, in the in-cart upsell and cross-sell app Candy Cart, you can set a specific cart value range for which your offer will be displayed:
- Sense of urgency: offers that are limited in time are a proven sales trick to evoke the fear of missing out and persuade customers to make a purchasing decision. You can experiment with your deal’s headline and description to create a sense of urgency.
In Digismoothie’s apps like Last Upsell, you can also customize what is shown in the pop-up above your particular offer—you can try out any wording and see what works best:
We hope you now have a better grasp of what is cross-selling and upselling, as well as how and when to use these techniques. Shopify apps can help you a great deal in automating various offers: within a matter of minutes, you’re all set! Plus, you get analytics dashboards to track your upsells’ performance, and if you decide to tweak the strategy, you can adjust any detail at any time.
Happy upselling, and if you have any questions, don’t hesitate to ask us.