Magento eCommerce Cross-selling and Up-selling Explained

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Cross-Sell-and-Up-SelleCommerce works in a very complicated manner and whether a store will be a success or a failure depends on quite a number of factors. But, one thing remains the same…a customer who is decisive about what he wants or does not want is definitely a rare phenomenon to come by. In majority of the instances, people know only what they want but do not know how they could really achieve it. There exists a very vague distinction between giving appropriate suggestions and between trying to increase selling at a specific price which the customer does not identify as a sales tactic. Amazon eCommerce store development is a perfect example where we can clearly see the benefits that cross-selling and up-selling bring along. Internet Retailer’s survey in 2009 stated that 35% of its sales were generated because of cross-selling. So, why not using this feature in Magento eCommerce site.

It is in this eCommerce arena that techniques like cross-selling as well as up-selling can make wonders when used in the proper manner and reap in benefits for the businesses and the customers too. These two techniques are definitely an art and a science as well wherein they introduce the customers to complementary products to buy when they are looking at items of their interest. This technique has been prevalent in the offline retail industry since decades and there is absolutely no need to tell about the advantages that it will bring along for the business owner and the customer as well. Forrester research analyst also states that such kind of product recommendations were responsible for increasing the eCommerce revenues by 10-30%.

Before we actually check how to use these techniques in your Magento website, it is essential to understand what cross-selling and up-selling actually mean.

What is cross-selling and up-selling?

Cross-selling

This is a case where the customer is made to spend more by suggesting him products that hail from other categories too but are related in one way or the other to the product he is purchasing. For instance, in case the customer is buying a laptop, you will offer him to buy a wireless mouse that could be extremely handy and a laptop bag which he could carry and show off at work. The suggestions could be many across the segment.

These products generally are displayed only after the specific product has been added into the shopping cart. The main intention here is to make the customers purchase those related items which they did not think of when they were buying the product.

Up-selling

This is a case where the customer is made to spend more by suggesting him an even more feature rich product or an expensive product. Very frequently, the stores may have numerous options which may be similar to the product that the shopper is buying. For instance, in case you are selling laptops, you could up-sell when you sell the same laptop that comes in with a metal body or it comes in with additional memory or it comes in with an extra GB hard drive.

Here, you are suggesting items that you wish the customer would buy rather than buy the item he is looking at. Your suggestions are no doubt of better quality but they definitely are pricey. A perfect example of this would be the products that come under the heading of ‘Similar products’.

The distinction between cross-selling and up-selling is very narrow. Their tactics go back to the same origin and intent but it is the kind of connection between the products and various parameters that one would consider during the purchase that would differentiate between cross-selling and up-selling.

Why should you use cross-sell and up-sell techniques?

The main intent to use these techniques for business owner is to have high conversion rates. And, it has been found that these two techniques have worked wonders in reducing shopping cart abandonment rate and increasing the numbers of orders.

Recommended Read: What is shopping cart abandonment and most Common Reasons

As per the Marketing Metrics survey, There are 60-70% chances of selling more products to an already existing customer through these techniques while new customers selling chances are just a mere 5-20%. So, one should not leave any stone unturned to draw more business from customers who are already buying from your site regularly.

These are also proven techniques to increase the customer satisfaction. Some times, customer doesn’t know better options or availability of the product at your site but with the help of up-sell and cross-sell in estore, he can find what he is looking for. So, this will help in increasing the overall satisfaction of the customer.

Advantages of cross-selling and up-selling

We know that cross-selling and up-selling are marketing tactics but what are the advantages they bring along? These techniques are found to be profitable for the customers and sellers alike. For the customer, he is getting to buy a related product under one roof without having to search elsewhere. For the seller, he is able to sell more when he is showing the related products to the customers and he is enticing to buy them. Generally customers find these suggestions extremely useful as they would not have thought of buying those products if they were not prompted by the seller. So, when the shopper engages in such buying activity, the seller is at an advantage as he can not only win the trust of the customer but can establish a life time rapport with him.

Where should you use these cross-selling and up-selling techniques?

As we have discussed earlier, these tactics have been found to be very fruitful for the customer as well as the sellers. But when and where should the seller use them in order to reap maximum benefit?

These techniques should be used when a customer is going to make purchase, while making purchase, and after finishing the purchase. Let find out how.

– The products need to be displayed below the main products or at category and sub category pages.

– When customer has the items in his shopping cart, show these products below the order list or add in abandoned shopping cart emails.

– The seller can still persuade his customer to come back and shop from his store by sending in follow-up emails.

As you can see, these techniques can be incorporated at different stages and catch the attention of the shopper when he is purchasing.

Some effective tricks to use cross-selling and up-selling

You as a store owner can make use of the cross-sell and up-sell techniques as and when you deem it right but they need to be effectively used in order to leverage the benefits they bring along.

  • Automate Your Recommended Products: Make the entire process of cross-selling and up-selling automated so that no wrong product suggestions when products are many. Effectiveness will come by when you choose the right eCommerce platform or plug-in that supports such functionality.
  • Bundle Up: This is a strategy which will help convince the customer to buy the entire bundle of products that are related to one another. The whole set should complement each other and there should be a price break. This type of bundles allows you to add products which can never been sold separately.
  • Affordable Add-ons: These secondary products should come in at an affordable price. Only then will the shopper get convinced to put his money into it. So, care has to be taken to include only those items whose price is not more than 25% of the price of the initial product chosen. This is a rule in cross-sell and up-sell.
  • Proper Placement: These techniques can be used anywhere over your Magento shop but effective placements are at the product page and prior to check- out, at view cart page. So, try your techniques at these places.

The main motto to sell through up-selling is to give the shopper an affordable bargain and a reason enough to buy the expensive products. He should be shown a benefit that is significant enough that would entice him to buy the upgrade product. But, in case the sale is pushed too much, there is always a risk of losing the sale.

Cross-selling definitely pushes the related products in front of the customer to be picked and bought. This technique is found to be beneficial in B2B sales.

Up-selling seems to work when there is not much of a difference in price and the products come along with almost similar features. cross-selling works best when the price of the product is significantly lower than the original product.

When both the techniques are used well, they can definitely reduce the shopping cart abandonment rate and bring in a whole lot of advantages for the business owners as well as the customers. One thing needs to be ensured that the upgrade products or the complimentary products will satisfy the customer and add more value to the purchase that is being made.

Your Magento eCommerce store supports the cross-selling and up-selling functionalities. In case you need to add functionality to your Magento Website so that you can leverage the benefit, do touch base with us and our professionals will be able to help you out with the entire process of having a fully functional online store.

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3 comments

  1. How to use cross sell and up sell feature in Magento correctly? I see this feature but confused how can I use for my online wine shop to increase sales? Can you give me related example?

    1. Hey,

      Cross-sell and up-sell are indeed useful techniques for eCommerce store. For wine shop I would say wine glasses or opener would be your cross-sell and if you offer bigger pack of wine would be up-sell or a combo pack would be up-sell.

      We are going to publish how to use cross-sell, up-sell, related products in Magento tutorial very soon. So, subscribe to our blog for regular post updates.

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