You’ve successfully led your customer to your site, guided them through the sales process, and deposited them at checkout to close the deal. But if you want to make the most of each customer, you need to keep selling until the very end - and upsell and cross-sell offers can help.
For companies looking to increase average order values, grow revenue, and expand their business while improving customer satisfaction, upsell and cross-sell products are an essential sales strategy.
For the best results, you’ll need to be sure that you’re using both strategies so that you give yourself the best chance at converting offers. So, you should know what the difference between an upsell and cross-sell is - and we’ll tell you in this article.
In online business, it almost always costs money to get customers into your store. Whether it’s search engine ranking efforts, paid ads, or social media collaborations, you’ll have to spend money to make money. As a result, there’s an acquisition cost for each customer that can really eat into your profit margins.
If you want to make the most of your marketing budget and increase profitability, you’ll need to implement upsells and cross-sells to increase your average order value.
Your Shopify store’s average order value is one of the most important metrics for your business to monitor. A high AOV allows you to spend more on marketing and increase revenue because when you increase how much customers spend on your site, you can spend more to acquire them while still profiting. This allows you to expand marketing efforts so that your business can grow organically with improved market share and more social proof.
Luckily, upsell and cross-sell products are the easiest and most effective way to increase your AOV.
Upselling involves trying to increase the amount of money your customers spend on a single product in your store. You make an offer for some kind of upgrade to the product, usually at a discounted rate, that convinces the customer that the value is too good to pass up.
Upsell offers can include increases in the quantity of the product (BOGO or size increases), the quality (newer model or added features), customizations (color changes or design changes), the frequency of purchasing the product (subscriptions), added warranties, and more.
Some potential examples of upsells you’ve seen or can make yourself are:
Cross-selling aims to expand your customer’s cart to include multiple products instead of just their original purchase. Offers should be complementary to the current contents of their cart and make sense, or even be necessary, for getting the most out of their purchase. You’ll usually want to offer a discount as well to increase conversion rates.
When you cross-sell products, you can move underselling products through bundles, add high-margin accessories, and provide a more complete shopping experience for your customers. They’re very low-risk and can even be a positive for helping buyers without experience in your niche get everything they need at once.
Examples of a cross-sell include:
Upselling and cross-selling are similar in their purpose but different in their execution.
Both strategies aim to increase the amount of money your customers spend on your site so that you can take advantage of improved cash flow and greater profitability. They’ll also usually be placed in the same general locations in your sales process, including the cart, checkout, and post-purchase pages.
However, the primary difference is that upselling upgrades the existing product while cross-selling adds more products to the cart to increase AOVs. Plus, upsells focus more on providing value with discounted upgrades that make the deals irresistible while cross-sells generally focus more on convenience in addition to the value they offer.
Additionally, upsells can also maintain a higher profit margin than cross-sells because there is only one product cost to worry about. Upsell offers that are services like personalization and customization upgrades generally have a much lower cost to you and as a result, can generate “free” profit. With cross-sells, you have to take multiple product costs into account to create a profitable offer.
However, cross-sell products also give you the opportunity to generate more revenue than upsells because your customer can add multiple products (in multiple quantities) to their cart while upsells are pre-defined increases.
With each strategy having its pros and cons, it’s easy to see why your approach should include both cross-sell and upsell offers for the best results.
Upselling and cross-selling are essential elements of your sales strategy, so it’s important that you can implement them quickly, easily, and effectively - and the best way to do that is with the right Shopify upsell and cross-sell app.
UpsellPlus has everything you need to create effective offers that generate more revenue and increase your business’s AOV.
ShopBrain, UpsellPlus’s algorithm, provides you with smart recommendations based on customer activity that help to increase conversion rates so that you can easily build offers that work. You’ll also be able to place your ads wherever they work best, which can be discovered thanks to A/B testing and analytics so that you can refine your strategy for the best results.
Best of all, it’s free to get started, so start your free trial today.
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