The Upsell and Cross-Sell Bible for Subscription Retailers
Not presenting additional products when a customer adds an item to their cart — also known as upselling and cross-selling — is costing you more than you think. Research from Forrester shows that upsells and cross-sells count for more than 30 percent of e-commerce revenue, so now is the time to make them a priority.
To start, it’s important that we clearly define the terms “upsell” and “cross-sell” for those curious about these tactics, but not deeply invested in them yet.
An “upsell” is the display of a more expensive item presented to a customer at the time of checkout. So, if a customer is set to purchase a pair of $60 shoes, showing them a similar style that costs $80 would be an upsell.
The term “cross-sell” refers to presenting the customer with an add-on or equally priced item that complements their purchase rather than encouraging them to purchase a different item. For example, if a customer is buying a pair of rainboots, displaying an umbrella at checkout is an example of a cross-sell.
Whether it’s an upsell or cross-sell, the goal is the same: get customers to increase their average order value (AOV) by showing them product they might want but had not planned on buying.
Here’s a great example from Under Armour:
Under Armour is clearly suggesting related products it knows the customer is already interested in. This is a key component of upselling and cross-selling — making the customer feel like they're receiving personalized recommendations based on their own unique interests.
However, it’s important to note that Under Armour isn’t a subscription seller (yet), and while many of the “rules” for upselling and cross-selling do work for all varieties of e-commerce, our data shows there are some best practices that help subscription services stand out from the pack.
Key Rules for Subscription-Based Upsells and Cross-Sells
- Recommendation Testing: Test your recommendation logic based on category, products added to cart or viewed, variants, and supplemental items. While you can get inspiration from what others are doing, the proof will be in how your visitors react. Test variations like the number of items presented, scrolling vs. showing more items, or not showing product prices.
- Create Scarcity: Countdown timers and aggressive discounting are good approaches, as well as Amazon.com's “X items left” messaging that appears under cross-sold items. This immediately creates a sense of urgency, which goes a long way in convincing a shopper to make a spontaneous purchase.
- Personalized Messaging: The psychology of your cross-sell messaging is important as well: you want to make the customer feel like an individual by using language like “Recommended for you” or “We think you’ll love this.”
- Promote Your Best-Selling and Most-Reviewed Products: You’re trying to get a customer to take a chance on a product that they had not planned on purchasing. Therefore, directing them to items that other customers have enthusiastically vouched for will help your cause.
- Pay Attention to the Price of the Upsell: It’s important to make sure the item you’re trying to upsell is no more than 25 percent higher than the original product. If someone is planning to purchase a pair of jeans for $80, they might be willing to spend $100 for a higher-quality item, but it’s unlikely they would go higher than that on the spot.
- Display the Upsell Prominently: You can’t expect a shopper to scroll to the bottom of the screen and click on an upsell offer that blends in with the rest of the content on the page. Use bold font that stands out and immediately captures the shopper’s attention.
- Consider Cross-Sell Discounts: Consumers love to feel like they’re getting a great deal, so offering discounts on cross-sells is a great way to drive more sales. This can be in the form of a one-off discount or a recurring discount on a monthly subscription.
When done correctly, upselling and cross-selling can have a huge impact on a subscription company's bottom line. Keep the aforementioned tips in mind and you’ll start seeing higher AOVs and wider margins before you know it.
Ro Bhatia is chief product and strategy officer at LimeLight, an e-commerce platform built with flexible billing solutions, data analytics and industry leading anti-fraud tools. LimeLight takes the complexity out of online sales for direct-to-consumer (DTC) brands to scale and grow revenue.
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Ro Bhatia is chief product and strategy officer at LimeLight, an ecommerce platform built with flexible billing solutions, data analytics and industry leading anti-fraud tools. LimeLight takes the complexity out of online sales for Direct to Consumer (DTC) brands to scale and grow revenue.