Tips for Using Big Data to Optimize Upsell and Cross-Sell Strategies
Getting traffic to your website can prove quite difficult and converting that traffic once it arrives is even more of a challenge. Most e-commerce conversion rates fall between 2 percent and 3 percent, unless you're Amazon.com (9.6 percent) or ProFlowers (14.1 percent). Therefore, when you manage a hard-fought victory, capitalize on it through aggressive upselling and cross-selling strategies. Big data gives retailers a new opportunity to succeed in this area.
Benefits of Upsell and Cross-Sell
When a consumer enters a store searching for a specific product, a salesman comes to their aid, providing them with whatever they need while suggesting alternatives and complementary products. Perceptive suggestions by the salesperson enhance the store's image in the eyes of the consumer, as it reflects a level of thoughtfulness on the part of the store. Suggestive selling online can be a valuable tool as it serves as a practical method of increasing profits and leveraging customer-buying patterns that may be hidden within your company's data. Cross-selling and upselling offer great value, as they increase the following:
- average order value;
- conversion rates (they guide consumers to select appropriate alternatives in case they're looking at the wrong product or one that doesn't complement the product in their shopping cart);
- exposure to high-margin products;
- customer satisfaction (the recommendation of related products will enhance the product as well as the user's experience); and
- deeper awareness about the products being offered.
Upsell and Cross-Sell: Tips and Tricks
1. Suggest the obvious. Several cross-selling and upselling opportunities arise all by themselves. For instance, if you're offering tennis racquets, suggesting tennis balls, bags and other relevant accessories is natural. You can also consider mentioning a few other related products and services that you provide.
2. Relevant suggestive selling works wonders. Overloading customers with unrelated product suggestions only serves to exasperate them and hamper purchase scope. If not immediately purchased, it will definitely hinder your chances of developing a repeat customer. Therefore, product suggestions should be as closely related as possible.
3. Expert recommendations help. Another way to facilitate upselling and cross-selling is by offering recommendations by professionals, field experts and customers. This could be anything, from a chef's suggestion on a particular menu to a doctor's recommendation on drugs. This is a strategy used by Amazon.
4. Timing is crucial. The best time to cross-sell or upsell is when the customer is trying out some item. For instance, if the customer is looking for a low-priced camera and seems disappointed with a particular model's features, the person may not mind buying a higher-priced model with more advanced features. Or suggesting a belt when a customer is trying on a pair of trousers is quite fitting.
5. Offer products of a different price range. Supplementary product suggestions should be across a varied price range. If three items have been suggested, it's crucial that all three offer a welcome mix of price points. Most often, the item that costs the least will be chosen. However, it will leave a good impression in the minds of customers, increasing the chances of repeat sales.
With big data, retailers have more insight into what their customers want than ever before. Today's consumers expect retailers to use customer-buying patterns to make shopping a more enjoyable experience. The secret to successful cross-sells and upsells is complete focus on customer needs and requirements, instead of concentrating on increased sales. As they say, take care of the pennies and the pounds will take care of themselves.
Retail Case Study: Boosting Sales by Automating Upsell/Cross-Sell Capabilities
S.P. Richards (SPR), one of North America's leading business products wholesalers, distributes over 30,000 business products to a network of over 7,000 resellers in the United States and Canada from a network of 44 distribution centers. SPR works hard to make their dealers successful. Lacking insight into customer buying patterns, independent office products dealers were losing their competitive edge, resulting in lost profit opportunities due to the following factors:
- proliferation in product-related data across multiple sales channels; and
- the inability to automatically and continually convert customer-buying patterns into cross-selling opportunities.
SPR empowers independent dealers to boost sales and regain a competitive advantage through the automatic detection of customer-buying patterns for cross-selling opportunities, leading to the following:
- automated cross-selling opportunities across 50,000 office products and multiple sales channels;
- a 9 percent boost in sales; and
- enhanced customer satisfaction and ease of use.
SPR's latest value-add is automated upsell/cross-sell capabilities on its e-commerce website. This capability is very powerful and couldn't come soon enough for its dealers, which include Give Something Back, ReStockit and Village Office Supply.