Understanding the basics of upselling and cross-selling to improve e-commerce sales

by 300cbt Team

I went to buy an Avante, but the contract was actually with Genesis.

Have you ever experienced this? Electronic products also have different models and prices depending on their specifications. This is upselling. According to Forrester Research, upselling and cross-selling can increase sales by 10-30% when used strategically. Upselling and cross-selling are the most basic e-commerce marketing strategies. Let’s find out more.

Upselling = Offer a higher version

Upselling and cross-selling strategies may seem similar, but there are differences. For example, if you buy a 13-inch laptop (notebook) that costs $1,000, the seller can offer the customer an upgrade such as CPU or an upgraded version.

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upselling

upselling

▲ Laptop purchase screen


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▲ McDonald’s upselling techniques

Upselling is an offer to upgrade or purchase additional products, commonly known as McDonald's' "Do you need a drink?" Joe.

Cross Selling = Inducing additional purchases

Once a customer has selected a product to purchase, cross-selling involves suggesting products that are compatible with or require additional products. For example, if you are purchasing a laptop or computer, you might suggest purchasing an additional printer.

upselling ▲ Proposal to purchase additional printers


upselling ▲ Proposal to purchase additional printers


The "Related Product", "Also Bought", and "Products people who bought this product also bought" lists that usually appear at the bottom of the product description page in a shopping mall are representative examples of cross-selling.

Purpose and effect of upselling vs. cross-selling

From a seller's perspective, it has the advantage of increasing sales, but if you are conducting a promotion from a long-term perspective, product configuration and UI that do not harm the purchasing process are essential. In a way, it can be said that upselling and cross-selling are currently applied to almost all products in Korea's open market. However, because it shows too many products, it becomes less effective. For upselling and cross-selling products, it is most important to place them in the right place.

So which is more effective in sales: upselling or cross-selling?

upselling ▲ Comparison of sales effects of upselling and cross-selling (source: Predictive Intent)

According to Predictive Intent, upselling is known to increase sales by 4%, and cross-selling is known to increase sales by 0.2. The upselling effect is 20 times higher than cross-selling. This can be said to show that once you decide to purchase, the rate of additional purchases is very low.

Upselling techniques

Overseas sites basically use upselling. For example, when selling a service, three or more plans are usually created, with the main product placed in the center and additional banners such as Most Popular and Recommended added, or an annual plan with a 10-20% discount on monthly payment (annual plan). A typical example is the proposal for unit payment.

upselling ▲ General Price Plan Table

How to upsell

In the case of the e-commerce platform Shopify, there are various apps that support upselling functions. One of the most representative apps is the Product Upsell by Bold app, which is simple to install and suggests upselling or cross-selling products in the form of a pop-up when a customer clicks Add to Cart.

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▲ Upselling App by Bold

Reccomendify is an app that suggests cross-selling products on the Cart page right before the payment page.

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▲ Reccomendify App

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In addition to the example above, applying upselling and cross-selling techniques depending on the product sold, such as providing discounts based on the number of product purchases (Qty) and the number of product types purchased (Total Qty), will help increase sales. Why not analyze existing sales data and come up with your own upselling strategy today?

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