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Upsell And Cross-Sell For Shopify

upsell-and-cross-sell-for-shopify

INCREASE CUSTOMER LIFETIME VALUE: learn from the tried-and-proven upsell and cross-sell playbook for increasing order size before, during, and after customer purchases.
Note: you can interact with the upsell and cross-sell playbook in our Shopify app demo store – click on ‘Visit Demo Store’ button or mouse-over / tap on individual bots listed below.

Why are upsell and cross-sell important for your Shopify store?

As a customer strategy, upselling and cross-selling is an essential tool for ‘helping customers win’. It’s about making recommendations that meet customer needs while fully informed about other options.

As a revenue growth strategy, it is always easier to sell to existing customers who are familiar with your brand or to shoppers who are buying than to convert ‘cold’ visitors into new customers.

Cross-selling can boost sales by 20% and profits by 30%. Moreover, personalized cross-selling accounts for 26% of income, despite affecting only 7% of website visits.

Speaking of upselling, you have a 60-70% probability of selling to an existing customer. In comparison, the likelihood of selling to a fresh prospect is only 5-20%.

Businesses in every industry should be exploring upsell and cross-sell opportunities to increase customer lifetime value and foster repeat purchases, brand loyalty, and brand advocacy.

The difference between upsell and cross-sell

Upselling and cross-selling are often thought to have the same goal, but there’s a slight difference between them.

Cross-selling occurs when you sell customers offerings that complement or supplement the items they are considering buying. For example, if you encourage a customer who is looking to buy a new phone to get a protective case at the same time, that’s a cross-selling win.

Upselling occurs when you increase a customer’s value by encouraging them to add on services or purchase a more expensive model. For example, if someone comes into your furniture store looking for a bedside table and you sell them a whole bedroom set instead, that’s an upsell.

Popular cross-sell and upsell strategies

Cross-selling and upselling are nifty product recommendation strategies that can sneak up on your shoppers seemingly out of nowhere. Done right, they are stealthy value-providers that buyers gravitate toward through perceived value of your brand.

There’s a very thin line separating much broader personalized product recommendations and upsell and cross-sell approaches, and in most cases they are used together.

A fairly comprehensive list of popular cross-sell and upsell strategies can be found in this post.

  • Supplementary products
  • Related products
  • Package deals
  • Products frequently bought together
  • Promote what customers also bought
  • Promote additional items for (almost) free
  • Provide free shipping if bundled together
  • Personalization via Customer History
  • Featured products
  • New arrivals
  • Seasonal offers
  • Daily offers
  • Bestsellers
  • Similar products
  • Products viewed
  • Products with customer reviews

Implementing these strategies on your Shopify store requires some additional skills and work.

Best practices

Since there are more than a few strategy options, you need to figure out which ones to choose, as well decide where to place cross-sell and upsell product recommendations on home page, product page, cart page, checkout, or confirmation page.

In addition, you need to consider staging more personalized experiences for different buyer segments at different stages in the buying process.

The decisions you need to make as a merchant are not binary. Instead, small nuances can make a big difference.

When do cross-sells work?

Cross-sells work well for considered purchases, typically high cost items, with high involvement rather than impulse buy. They also work for smaller purchases with small accessories.

Products that promote bundling are another good fit. For example, camera with lens or ‘shop the look’ in luxury fashion.

When do cross-sells fail?

Don’t try to push higher priced and lower priced items together. Be careful that you don’t just look at the correlation in your analytics data, but consider the primary and secondary intent.

When do up-sells work?

Upselling (suggesting a similar item instead of the item being viewed) must have a perceived difference in dollar value or a nominal percentage difference – 10-20% max. You need to show some incremental value for the increase in price.

When do up-sells fail?

When important attributes are different (red vs. blue dress), or when you show items that don’t have the features the customer is looking for. You can also fail by showing different brands that don’t interest the shopper.

Challenge: use of fragmented customer data

Ecommerce is generating a lot of actionable but very fragmented data.

For example, transaction and product data is stored in the Shopify database while visitor behavior data is tracked and managed by web analytics.

Integrating disjointed data is not a simple task and is almost impossible to accomplish for most Shopify merchants.

Opportunity: use of AI algorithms

The most effective way of actioning rich ecommerce data is by implementing machine learning algorithms, commonly called AI.

Such technologies are widely available but ecommerce companies lack the expertise and resources to use it.

The universe of available AI algorithms is vast. That is why it is also important to use the right algorithms for the job.

For example, Amazon and a few other big name retailers are changing the competitive game with the use of session-based AI algorithms that adapt to visitor behavior in real time. This is how they are able to unlock the revenue potential of 90% of qualified visitors who come to an average online store looking for something and leave without ever discovering a product of interest.

Growth Bots and upsell and cross-sell playbook

To reduce the complexity of the solution and to enable every Shopify brand to effectively compete with the ‘big boys’, we built the Obviyo Revenue Growth Automation app that provides the following game changing capabilities:

  1. Algorithms: the app is powered by the same machine learning algorithms that drive personalization and product recommendations on Amazon
  2. Growth Bots: micro-apps designed for each use case, driven by integrated real-time data, and powered by the right type of algorithm;
  3. Playbooks: a blueprint to inspire and to guide with step-by-step actions;

In this post, we are introducing our ‘Upsell and Cross-sell’ playbook and a curated set of Growth Bots you need to increase customer lifetime value.

A story behind the playbook

The main goal of this playbook is to help you jumpstart your upselling and cross-selling initiative. In the process we hope to help you develop a Revenue Growth Automation (‘hacking’) mindset that will enable you to continually iterate and improve your store results.

To help crystalize your thinking we are using physical retail analogous terminology introduced by Hannah Leary in her post about visual merchandizing:

  1. pre-purchase – buying experience before visitor has added a product to the online shopping cart;
  2. purchase – checkout buying experience
  3. post-purchase – what happens after purchase has been made

The biggest challenge in upselling and cross-selling is relevancy. If your upselling and cross-selling offers are irrelevant chances are customers may abandon their purchases.

To solve the issue of relevancy you shouldn’t hesitate to leverage your customer knowledge and introduce manually provisioned or rules based options. However, the best results are achieved when using advanced AI algorithms.

Stage 1: Pre-purchase

In the pre-purchase phase, visitors encounter your brand and products in search of items that will meet their need for comfort, connection, variety, or uniqueness.

The biggest unexplored revenue growth potential is during the pre-purchase phase because 90% or more of your visitors are not familiar with your brand offering.

Your first order of business is to use Growth Bots to help potential buyers quickly discover products of interest – otherwise the sales opportunity is lost, often forever.

Top Sellers By Revenue

PLAY: Drive bottom line revenue for your brand by helping returning visitors discover items of interest among best selling products.

WHY THEY WORK: It’s always great marketing to show what other customers love to buy from you. That’s why featuring your top sellers reinforces what’s brilliant about your brand.

PLACEMENT: Home page

Similar Items Cross-Sell

PLAY: Help your visitors discover products of interest by showing products other visitors selected after viewing a product they are viewing now.

WHY THEY WORK: Similarity based product recommendations are an effective way to guide shoppers through their product discovery steps. They assist with product exploration, enabling visitors to discover the wide range of items offered by a brand.

PLACEMENT: Product page

Inspired By Recent Product Views

PLAY: Inspire customers to further explore related or complementary items to those they have viewed.

WHY THEY WORK: These recommendations will introduce customers to products they didn’t previously know you offered, further earning their confidence that you’re the best retailer to satisfy a particular need.

PLACEMENT: Home page

Upsell premium items

PLAY: Drive bottom line results by promoting premium priced items similar to a product a visitor is viewing.

WHY THEY WORK: When it comes to luxury brands buyers often prefer products with a higher price tag, which generates additional interest in products offered by a brand.

In addition, this play can be viewed as ‘price anchoring’, where a product being viewed is less expensive than other recommended products, which can influence a buying decision.

PLACEMENT: Product page

Stage 2: Purchase

Once shoppers click on the add-to-cart button the buying experience changes. This action generates a strong signal of interest in your brand and the types of products your shoppers are interested in.

This information is super valuable and it should be further amplified by upsell or cross-sell of related products.

Add-To-Cart Upsell Popup

PLAY: Trigger a pop-up after a shopper clicks on the ‘Add to Cart (Bag)’ button that displays complementary items that they should also consider buying..

WHY THEY WORK: Adding products to a cart one at a time involves more decision making and more steps. Whereas, with an easy product add-on feature a customer can buy multiple products at once.

PLACEMENT: Product page

Product Add-On

PLAY: Reduce the number of steps in buying process with the ability to select multiple products to be added to online shopping cart with a single click on ‘add-to-cart’ button.

WHY THEY WORK: Buying products individually involves more decision making, and more steps. Whereas through product add-on a customer is able to buy multiple products together.

PLACEMENT: Product page

Cart Cross-Sell

PLAY: Inspire customers to buy related or complementary items to those they’ve already added to their cart.

WHY THEY WORK: Cross-selling is a highly-effective tactic for increasing cart value and demonstrating the breadth of a catalog to customers.

PLACEMENT: Cart page

Checkout Cross-Sell

PLAY: Reduce cart abandonment by offering impulse buy items.

WHY THEY WORK: Cross-selling is a highly-effective tactic for increasing cart value along the entire checkout funnel. By offering complementary impulse buy items you also create a ‘sticky’ checkout experience and reduce cart abandonment.

PLACEMENT: Checkout

Stage 3: Post-purchase

End of one buying cycle marks the beginning of a new one.

Your ‘thank you’ page is super valuable real estate that should be used to try to append more products to a just completed order, or to jumpstart a new buying cycle with other relevant product recommendations.

Related To Order

PLAY: Re-engage your buyers immediately after they’ve completed a purchase with products related to those they have just purchased. You have nothing to lose!

WHY THEY WORK: Purchase confirmation page is too often treated as a ‘dead’ page. Instead, you should view it as an opportunity to start a new buying lifecycle with product cross-selling, upselling, and other types of re-engagement. This is your opportunity to alert your buyers to products they didn’t previously know you offered.

PLACEMENT: Confirmation page

Post-Purchase Personalization

PLAY: Cross-sell to buyers who just completed an order with recommendations based on items they viewed during the buying session.

WHY THEY WORK: It is essential to continually educate your shoppers about depth of your product catalog. The order confirmation page is valuable real-estate that should be used to recommend additional products that buyers should consider now or in the future.

PLACEMENT: Confirmation page

Repeat Purchases

PLAY: Generate most revenue for your brand by help returning visitors discover items of interest among best selling products.

WHY THEY WORK: It’s always great marketing to show what other customers love to buy from you. That’s why featuring your top sellers reinforces what’s brilliant about your brand.

PLACEMENT: Home page

Inspired By Past Purchases

PLAY: Re-engage with your existing customers by showcasing products related to those they already purchased.

WHY THEY WORK: The simplest form of personalized buying experience is the ability to create relevancy to what your buyers have done in the past. In addition, this is your opportunity to alert your buyers to products they didn’t previously know you offered.

PLACEMENT: Home page

Conclusions

‘Upsell and Cross-sell’ is an essential strategy for growth of customer lifetime value.

At first, implementing an ‘Upsell and Cross-sell’ strategy might seem complex and out of reach for the majority of Shopify merchants. In reality, with Obviyo’s playbook and ready to use Growth Bots, most Shopify merchants should find it easy to implement.

This blog’s mission is to provide context behind the short list of upsell and cross-sell bots each Shopify site should have.

Special thanks to our friends at Obviyo for their insights on this topic.
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