Smart ecommerce business owners are always looking for ways to increase revenue. In addition to increasing traffic, conversion rates, and other common metrics, you can also boost your revenue by increasing your average order value, or the amount a customer pays on average per order.
Cross-selling is one tactic to increase average order value and overall revenue, and involves presenting customers with items related to those they show interest in purchasing. The goal is to get the customer to add more items to their cartby making strategic suggestions. As Time reports, Amazon credits cross-selling for 35 percent of its revenue.
How can ecommerce entrepreneurs harness the power of cross-selling to increase revenue? Start with a thorough enterprise ecommerce platform comparison to make sure you build your website on a platform that provides cross-selling features. Then, follow these tips to help you effectively cross-sell to your customers:
The key to cross-selling is product relevancy. If you want your customer to purchase an additional item, it better be closely related to the item already in their cart. You can’t just present random products. A customer who is buying a t-shirt probably isn’t going to be interested in adding a big-screen TV to their order.
The best way to offer a relevant cross-sell is to identify complementary items. You could offer ink to someone looking at buying a printer, or sunscreen to someone looking at buying a beach towel.
A cross-sell should be a quick, no-brainer decision for a customer. However, if the price of the suggested cross-sell item is too high, the decision becomes inhibited by cost.
It’s best to keep the value of the cross-sell at less than 25 percent of the overall order. For example, if the customer has a $100 item in their cart, any suggested cross-sell items should cost $25 or less.
Cross-sell products are meant to be familiar, everyday products that require no further explanation. If the item you are cross-selling is complicated and requires further investigation by the customer, they are not likely to purchase it. A pair of socks to go with a pair of shoes is easy enough to understand. However, some lesser known tech gadget to go with another technology purchase may not translate into additional sales.
Here is the magic formula: customers who have purchased X have also bought Y. In this powerful phrase, not only are you offering social proof that the product the potential customer is looking at has been purchased by others, you are also using social strength to recommend additional products. It’s a win-win!
When is the best time to offer a cross-sell in an ecommerce environment? The short answer is there is no short answer. It’s best to experiment with different locations throughout your ecommerce website.
You can offer cross-sells on product pages, category pages, in the cart, or in various stages of the checkout process. You can also offer cross-sells in follow-up emails as well. It would be wise to take a good look at Amazon to see how the kings of ecommerce do cross-selling.
At the end of the day, you have to ask yourself if your cross-selling efforts are helping or hurting your customer. If you are offering relevant, familiar, low-cost items that your customers would benefit from, it’s likely cross-selling is working well for you and your customer.
Just remember: Never bombard your customer with cross-sells and up-sells just in an effort to make an extra buck. It’s off-putting and harmful to your entire brand. Put your customers above all else, and you’ll see positive results.