Dr. Ralph F. Wilson, Web Marketing Today, Rocklin, CA
Nov 13, 2007, 08:02
Video: Examples of E-Commerce and Up-Selling (3:53)
How do the top online retail stores get conversion rates of 5%, 10%, even 15%? One factor is that they provide cross-sell opportunities for shoppers. This merchandizing technique is important for both retail and B2B e-commerce sites that offer more than just a handful of products.
Cross-Selling
Cross-selling is offering a similar product to what a shopper is looking at -- either an alternative model or accessories that go with the product (add-ons). Using a cross-selling strategy in your store is likely to result in:
Customers finding exactly what they are looking for, thus increasing the rate of order completion, and/or
Customers adding accessories to their original selection, thus increasing the order total.
In addition to related products, many merchants use cross-selling capabilities to display popular items and high margin products throughout the store. Who knows? A customer may just see the item and buy it on impulse along with his original selection.
Up-Selling
Up-selling is offering a better and more expensive product. If the shopper exhibits behaviors of going to a product page or placing an item in the shopping cart, you can be pretty sure he has an interest in that product. If he selects the good model, also show him the better and best models.
Amazon up-sells by offering two related books together for a slight discount, a technique known as "bundling." I use a similar approach. When a shopper browses my e-books, for example, I offer the single e-book at the regular price (such as $14.95), then offer a subscription to Web Marketing Today Premium (which includes nearly all my e-books as a bonus) for $49.95. Shoppers regularly recognize the opportunity for huge savings and pay the higher price -- a successful up-sell. This single merchandizing technique brings into my business tens of thousands of dollars in increased sales each year.
Displaying Cross-Sell Options
It's best to display cross-sell options both on your product pages and in your shopping cart. People are still trying to determine whether or not they should purchase even after placing an item in their cart, as evidenced by the high rate of shopping cart abandonment. If your shopping cart program offers this feature, cross-sell products displayed on the shopping cart page of the ordering system will be directly related to the product placed in the cart.
Many apparel companies position their cross-sell options in a right column on the product page. Others place them just under the product description. Cross-sell placement in the shopping cart is usually below the list of items in the cart. Wherever you place your cross-sell options, make them visible and attractive, using thumbnail images whenever possible.
Cross-Selling in Off-the-Shelf Shopping Carts
Free shopping cart programs offered by PayPal or your hosting service usually don't offer cross-selling capabilities. These features are usually found in shopping cart programs powered by a product database. You'll see them, for example, in recent versions of Miva Merchant, LeGarde StoreFront, Yahoo! Merchant Solutions, ShopSite Pro, MonsterCommerce, osCommerce (and knock-offs), and other leading small business carts. Check today to see if your shopping cart program offers cross-selling capabilities.
To set up your cart for cross selling you'll typically go through your product database one by one, adding in the appropriate field the SKU numbers of all related products, beginning with the most popular and highest margin products. If you have a lot of SKUs in your store, this represents a considerable chore. However, the payoff for this time investment is huge when you consider that this "chore" could increase your sales by 10% to 20% or more without any additional marketing costs. If you have an online store with many products, put this "chore" at the top of your priority list -- then wish yourself a Merry Christmas!
