Last updated: November 3, 2022
Contentsquare states that 54% of shoppers visit multiple websites before deciding what to buy and who to buy it from.
You worked so hard to get that customer’s attention with your marketing. Now that they’re on your website with the intention to buy, cross-selling is a chance for you to give your customers everything they need in one place, which is convenient for them and profitable for you. Don’t lose an opportunity to offer them an enhanced product experience while tapping into additional sales for your Shopify store.
At Upscribe, we’ve processed $500 million in subscription revenue from some of the fastest-growing brands on Shopify. In this article, we’ll take you through the ins and outs of cross-selling on Shopify, why it’s an important strategy to grow your brand, and how to make it work.
What is cross-selling
Cross-selling is the practice of suggesting complementary or related products to a primary product that your customer is purchasing. It’s an effective marketing tactic that helps to increase your Average Order value (AOV) and Customer Lifetime Value (CLTV) because the customer is spending more in addition to what they’re already buying.
In this example from Gymshark, a customer adds a sports bra to their bag, and they get recommendations for cycling shorts or leggings to complete the look. This is cross-selling in action. The leggings or shorts both complement the sports bra and create a full workout outfit.
Cross-selling is different from Upselling, which is an upgrade to a more premium or expensive product. With cross-selling, you’re suggesting the customer adds more to their product purchase. On the other hand, by upselling, you’re getting the customer to change the product altogether.
Why cross-selling is important for your Shopify store
The average order value is the average dollar amount a customer spends in one transaction in your store. Recommending other products that complement each other can increase average order value. Instead of buying just one product for a lower amount, they can buy more products which increases the order value and sales. In fact, McKinsey found that if done right, cross-selling can increase sales by 20% and profits by 30%.
Taylor Stitch could see a potential 22.6% increase in order values by cross-selling at checkout. Instead of paying only $168 for a shirt, the order value could go up to $206 if a customer buys the ball cap for $38. They’ve conveniently placed the “add to order” right above the express checkout options for quick and easy checkout.
Customer lifetime value (CLTV) is the total income you can expect to get from a single customer for the duration of their relationship with you. You’ve seen how cross-selling can increase the order value of one transaction from a single customer. Now consider offering that customer useful recommendations of things they need every time they come back to buy from you.
This shouldn’t be too difficult either. According to eConsultancy, the odds of selling to an existing customer are 60-70%. If your efforts are successful, in a given period, that customer will have spent more with your business than they otherwise would have had you not implemented cross-selling. This results in a direct increase in your CLTV. High AOV and CLTV make it easy for you to get a return on those high customer acquisition costs.
Triggers impulse buying
Impulse buying represents between 40-80.% of all purchases. While impulse purchases are considered unplanned, not all unplanned purchases are impulsive. Unplanned purchases can occur, simply because the consumer needs to purchase a product, but for whatever reason hasn’t placed it on the shopping list in advance. In these cases, recommendations can benefit the customer.
Imagine a customer buying scented candles like this Privy example. Recommending matches to go with the candles may trigger an impulsive purchase. While the matches were an unplanned purchase, they’re still helpful and necessary to light the candles. The customer will be happy they bought the matches and you’ll be happy you got that extra sale.
Reduces shipping and fulfillment costs
Cross-selling means you’re getting more products to the customer in one order instead of having multiple shipments for several small orders. This could reduce shipping and fulfillment costs because you can package everything in one box and send it all at once.
Smaller frequent orders can be more expensive to ship than one big box, which eats into the profits of your store. When you bundle products in more predictive ways, you can choose efficient packaging that saves you more on shipping as well.
Improves customer experience
66% of customers expect companies to understand their needs and expectations. If you know a burger goes well with fries and a drink, offer it before they ask. The customer will feel you understand their needs and appreciate the recommendation. This improves their overall customer experience.
“You may also like” suggestions are a way of connecting on-the-go shoppers with products they need in the shortest amount of time. These personalized buying triggers facilitate a great customer experience which yields high rewards for your business in the form of sales and repeat business. 91% of consumers say they’re more likely to make a repeat purchase after a good experience.
By recommending complementary products, you’re increasing the chances of customers finding and buying other products in your catalog that they may not have known about otherwise.
Strategically cross-selling complementary products helps you move inventory faster and reduces your inventory-holding costs. This is especially beneficial if you have a slow-moving stock of some products which can pair well with other primary products, or if you have new products that you’d like to introduce to customers.
In this example, Kylie Cosmetics introduces new collections regularly. To push sales of products in each collection, they have a “complete the collection” recommendation which introduces their customers to other products in the collection including a bundle with everything so they don’t have to buy separately.
Implementing Cross-selling in your Shopify store
The good news about cross-selling on Shopify is that there are plenty of apps to do it for you. You just have to pick the right one for your business. You want to measure the effectiveness of your cross-selling strategy and how well the app you’ve chosen is doing at helping you implement this strategy.
Here are a few guidelines to tell if your cross-selling strategy is working:
- Measure your average order value before you start cross-selling, then measure it after you’ve implemented it and have a few months of data to compare. You should see an improvement. Based on data from 150 million shoppers in this Salesforce report, purchases where a recommendation was clicked saw a 10% increase in average order values, and the per-visit spend of a shopper who clicks the recommendation was five times higher.
- Measure the amount of time your customer spent on your site. As a benchmark, the average time spent on a page across all industries was 55 seconds according to this Contentsquare report. You want your customers to spend a little more time on the product pages once you’ve introduced cross-selling. The longer they spend on your product pages the more likely they are to buy.
- According to the same report, product recommendations led to longer time on site with shoppers spending on average 12.9 minutes on site vs 2.9 minutes for those who don’t click recommendations. On the other hand, checkout should be quick and easy with no obstacles to paying once they’ve made a decision to buy so they should spend less time at checkout.
- Measure the conversion rates before and after cross-selling. Shoppers who used search and clicked on recommendations convert 3.7 times more often, with this number going up to 4.2 times if they use mobile. This is an opportunity to optimize the search on your store and offer personalized recommendations.
Cross-selling apps for Shopify
1. Upscribe: With the build-a-box feature, Upscribe lets you package complementary products in a bundle to sell at a discount to your customers. You can also give customers the option to subscribe and save even more with regular purchases of the bundle by using an effective subscription model.
2. Privy: This popular email and SMS marketing app also has built-in cross-selling features. Privy lets you customize popups to cross-sell to your store visitors with an easy-to-use drag-and-drop editor. You can select the products you want to cross-sell and the pages where you want the popup to appear.
3. Cross-sell & cart upsell: this Shopify cross-sell app uses a powerful AI recommendation engine but also lets you manually choose products based on sales history, orders and product collections. You can hide products if they are already in the customer’ shopping cart.
4. Reconvert: This app lets you strike while the iron is hot by cross-selling immediately after a sale. Reconvert lets you transform your thank you pages with targeted recommendations to customers then lets you track performance with advanced “thank you page” analytics.
Cross-selling best practices
Focus on the buyer’s journey
Try to map out the buyer journey for each of your buyer personas to see which touchpoint’s would be an opportunity to cross-sell. Buyer journeys reveal common customer pain points, how they interact with your brand, their expectations, and other insights which allow you to better optimize and personalize their experience.
Think about whether they call customer service, go in-store, contact you on social media or chat with a chatbot on your site.
The best way to understand the buyer journey is to ask the customers for insights. The more information you have about your buyer behaviors when they are on your site, the better you can be at timing the right moments to cross-sell.
Personalize the experience
52% of customers expect offers to always be personalized. Cross-selling only works if it’s personalized to the customers’ buying needs and experience. Limit the number of items you’re suggesting to the customer to create a more personalized and well-catered experience for your customer. Overloading the customer with suggestions can be confusing and make decision-making harder, which can work against you.
Focus on recommending products based on what goes with items they’ve clicked on or have in their cart.
Alo does a great job of cross-selling. In this example, they suggest other pieces in their catalog to complete an outfit based on the inspiration photo. This way, it’s not hard to imagine the complete outfit. They also have pictures with style inspiration from Instagram where “influencers” are wearing the exact outfit. This is a highly personalized and effective way of cross-selling.
Drive value by asking yourself, how will my customer benefit from using this product? What other products will help enhance the experience of the primary product? Don’t make unnecessary recommendations just to increase sales. This could hurt your business in the long run as you see more returns or lower conversions because of irrelevant recommendations.
If there’s value in the recommendations, customers will be more willing to open their wallets. Back to the first phone example, Samsung recommends a wireless charger as an add-on. The phone already comes with a data cable so the wireless charger is not a necessity. But as an experienced smartphone user, a customer is quickly reminded of their old mangled charging cables and a wireless charger quickly becomes appealing.
Listen to feedback and improve
Feedback can be in the form of interviews, listening to customers who have actually bought one or more products from your store—understanding their requirements, and suggestions for what would improve their buying experience. Look at the data, what are your customers purchasing trends? What is usually bought together and how are customers benefiting from their purchases?
From the number of people who bought recommended products, how many of them ended up returning the products, and why. This will help you focus on more relevant recommendations and inform your product development strategy.
A/B testing is also known as split testing and it compares two variants (A and B) to see which performs better. You can start A/B testing by first checking if your website conversion rates improve after adding product recommendations or not. Once you determine that product recommendations improve conversions, you can do different tests to determine which complementary products are most frequently bought together. With A/B testing, 50% of the traffic is sent to one version of your site which shows one set of recommendations, and 50% of the traffic is sent to another version with a different set of recommendations. You then keep the best-performing products.
- Cross-selling on Shopify is a strategic way to increase revenues for your store, while also delighting your customers with helpful product recommendations.
- Cross-selling shows customers what else you have to offer in your store in a way that’s personalized and relevant to their needs.
- This contributes to a great customer experience and will likely lead to them returning and buying from you again.
- The success of your store depends on getting repeat sales from your loyal customers and increasing revenue in a predictable manner.
At Upscribe we’ll help you build recurring revenue into your business whether you choose cross-selling or bundling and subscriptions. Schedule a demo to see how it can work for you.