The holiday season is warming up quickly, and you must have been up to your ears prepping for the big sales. Whatever task you’re working on, it should aim for one ultimate goal only: to drive sales. And the fastest way to do that is to boost up that average order value (AOV).
AOV is usually considered a tough-to-crack metric related to customer loyalty, but in fact, you can get great results with just a little marketing effort. Your mission is to suggest relevant upgrades (upsells) or additional similar products (cross-sell) in the right place, at the right time. When done well, upselling and cross-selling are very beneficial for your customer-brand relationship, as well as your revenue.
Upselling and cross-selling can be applied to all industries - from retail and accessories to software and cars. No matter which sector you work in, you don’t want to miss learning something new on how to boost online holiday sales.
In this article, we first discuss what you can expect in the holiday season 2020 and then how to apply the best upsell and cross-sell techniques.
Holiday 2020 predictions
The global pandemic has been raging and retailers and brands face new challenges. There are many uncertainties this holiday season. Here are some changes to keep in mind:
- Customer behaviors have changed drastically during the outbreak, shifting most shopping activities to the digital landscape. As a result, their expectations of eCommerce performance have grown.
- Gen Z and millennials are on the rise to have the largest purchasing power, with their first concerns being sustainability and transparency.
- Within two months of the global pandemic, the eCommerce industry witnessed a five-year transformation, which accelerated the innovation of voice shopping, AI-influenced browsing, and machine learning.
With these significant waves, most brands need to make sense of how to prepare for the big days ahead. We have researched what experts like Deloitte, Forbes, and BigCommerce think about the holiday season of 2020, and we have uncovered several key factors brought about by the changes.
A longer holiday shopping season
An NRF report surveyed 54 retailers about the 2020 holiday season, and 74% responded that they believe consumers will spread out their holiday shopping over several months. In fact, nearly half expect shoppers to start their shopping in October.
This means that brands have to constantly reinvent themselves with new marketing offers, gifts, discounts, or tricks to get buyers hooked. It is surely sweet and sour, because a longer shopping season challenges brand creativity, bringing out the best in brand and customer relationships.
However, an indulgence in offers and discounts for customers can have a negative impact on brand reputation. The last couple of years have witnessed countless luxury brands, such as Gucci, Givenchy, or Burberry, cheapening their perceived values by giving discounts and selling in outlets.
Mobile, social, & contact-less shopping is how people shop
While brick-and-mortar sales were mostly put on pause, retailers turn to their online presence to keep the sales flowing. It led to both Q1 and Q2 showing a dramatic boost to eCommerce for many stores, including Gamestop (up 800%), Macy’s (up 53%), Kohl’s (up nearly 60%), and Ulta (up 200%).
A recent report by PwC stated that a majority of consumers (65%) are concerned about catching coronavirus during the shopping season, which makes online shopping much more attractive.
Personalize, personalize, personalize
According to a 2019 survey by Harris Poll, the three greatest sources of frustration among consumers are: sending offers for a recently purchased item (34%), sending irrelevant offers (33%), and ads failing to recognize them as existing customers (31%). Personalization works so well that 49% of surveyed consumers say they are more likely to purchase from retailers that send them personalized content and offers.
In order to achieve this result, brands need to integrate all available data - from demographics and past activity to behavioral data and industry benchmarks. If you’re still hesitant to pick a decent analytics platform to do the job, Boost Product Filter & Search can provide you an insightful analytics dashboard of shopper behaviors, which helps you understand your customers better.
Once gathering all the necessary data, you can use Product Promotion features, such as Product Ranking, Merchandising, and Product Visibility, to control smart product triggers for the right customers.
However, around the holidays, consumers always look for a bit more “magic” - especially this year. So offering an unusual and unique experience will capture a great deal of attention. Whether it’s AR experience through a phone and a physical product or a newly released board game, we’ll likely see lots of cross-over with technology in holiday campaigns.
Econsultancy had an article about how luxury brands must focus on digital experiences to fight the discount trend - which is especially true at this time when people opt for contactless shopping.
Personalization can even evolve from brand experience to product experience. Brands can go beyond inserting someone’s name in an email to make focused product or service recommendations, customized emotional appeals, and efficiency-driven offers like drop ship or personalized greetings.
Many brands even let online shoppers curate thoughtful gifts via customization - a growing trend that drives higher engagement and AOV.
Who doesn’t want to build their own BonBonBon box using the BonBon Builder? Source: BonBonBon
Gifts are back to basic
The pandemic has kept consumers from the “experience shopping” of travel, vacation, and dining, which increased savings for them. This advances their purchasing power in the upcoming weeks.
Burt’s Bees is so prepared for this year’s gifting season with their take on personalization.
In addition, taking into account the uncertainty of the pandemic infection rate, consumers will keep pass on holiday travel and family-and-friends gatherings. More money to spend plus more time apart equals more gifts exchanged to make up for the bonding.
People are up for stay-cations
With fewer large parties to attend and more time at home, we can expect more self-purchases directed toward home decorations and household improvements. This means a darn good opportunity for creative housing merchandise and housework appliances.
How to upsell & cross-sell in holiday 2020
In 2012, Amazon saw a 29% increase in sales after introducing its version of upselling: product recommendations - like those “frequently bought together” panes. Looking at this success, we find that Amazon doesn’t simply recommend whatever merch that they hope shoppers may like. Instead, the endorsed merch are relevant, helpful, and efficient products.
Thanks to billions of data points gathered from customers’ purchase history, Amazon is able to suggest valuable shopping ideas to consumers.
The online retail giant has taught the world the first and foremost rule about upselling and cross-selling - and even marketing - always help customers win.
Help customers win
Whether it’s upselling or cross-selling, neither should just be a sales tactic. We are stepping into a very sensitive digital age where consumers have so much information, and thus, power - in their hands, that marketing gimmicks simply don't work anymore.
Over the past few years, we are focusing more and more on human-centric marketing and the development of customer-centric business. It’s all about helping your customers win now - so that you can win too.
How can we help customers win? You might wonder. The answer is simple: Focus on what they need. What products or services have they bought from you? What are their uses? What can be the extensions of these products or services which we can provide? If a customer is looking for a mask that helps oily skin, upselling with a mask for very dry skin just won’t work.
“Would you like some fries with that?”
The simplest and easiest upsell that rockets the sale of fries at McDonald’s.
If the customers have already bought from you, it’s a good sign because it means that they already trust you because of the original purchase. The goal here is to maintain their trust. You can do this by making sure that the upsell or cross-sell is something that would actually be beneficial to them. This way, they will continue to trust you and buy from you.
Here’s the interesting thing about most purchases. Even though they are intended to solve a problem, they also introduce additional problems.
- You buy a knife. It gets dull. You need a sharpener.
- You buy some software. You need to learn it. You buy training.
- You buy sunglasses. They get fingerprints on them. You need a cloth to clean them.
Think carefully about the product you sell, and try to understand the new challenges or problems that it introduces. Then, upsell the customer on the solution to that new problem.
If you’re not sure when to upsell or cross-sell a product, pay attention to the context. Always pitch a new upgrade within the context of an idea. If you see an opportunity to help a customer increase their leads from email marketing, you should come up with a real plan to help them get there.
Your customers need to fully understand why you think an additional purchase is a good idea. If you approach them and say, "I think you need to spend more on home decoration," they might get the wrong idea and jump to the conclusion that you're just trying to line your own pockets.
Consumers are very nervous about upselling and cross-selling, so ask yourself before planning: Why should we upsell this product to the customer? Does it solve a problem? How does it help them?
Always make it relevant to the original purchase. It’s hard to say no to something that sounds like it would go perfectly with your new purchase.
If done right, upselling can help your brand develop a stronger relationship with customers. For example, you offer a bundle of three products for $100 cheaper than the cost of them separately. Your customer wins because they are saving money.
You win because you’re making extra money by selling something that the person probably wasn’t originally planning on buying. That’s how you focus your upselling efforts on customers with an evident gap in their current plan.
Deliver with strategy
Long gone is the time of feeling and sensation marketing. Today, people make data-driven decisions every minute. With data comes insights, and with insights comes smart marketing. Here are some questions about your customers that you should be able to answer before running a holiday campaign:
- Why did this person buy from you in the first place?
- What products did they purchase, and what does this say about them?
- What are their demographics, and what patterns do you typically detect from past buyers of a similar make-up?
Choose a solid analytics tool to gather an in-depth understanding of your customers. Source: wordstream
Spend time digging through and analyzing past buyer metrics to analyze your customer purchase behavior and offer products personalized to your buyers. If you notice a trend of product pairings, you know there’s an upsell opportunity. Once you are able to do that, you’ll have a much better chance at upselling and cross-selling to these past buyers and similar future shoppers.
For example, if you sell beauty products and a previous customer purchases shampoo and conditioner, consider how long it will take for her to go through those bottles. Once that time is coming near that she is down to the last few washes, what can you do to entice her to buy from you again? Maybe offer her a subscription-based product with an encouraging discount?
If your typical buyer is on a budget, then you could offer her a loyalty discount to appeal to her money-saving needs. If you sell more high-end haircare, you could re-appeal to her with an ad showing some of her favorite celebrities that have endorsed these products.
The bottom line is: devote the time to think strategically about your customer personas so you can re-appeal to them with compelling messages that speak to their specific wants, needs, and desires.
Create targeted lists of past buyers
Once you have spent time digging through the data and understanding your various buyer personas, it’s time to organize them into segments so you can target each list with the right offer.
The fabulous thing about these types of campaigns is that you already have their contact information from their past purchases. This will allow you to generate highly targeted lists of past buyers so you can use personalized messaging and put each list in their own campaign.
This step is critical in keeping things regulated, so the right people are getting the most relevant information catered to them.
For instance, if you just purchased a new couch for your studio apartment, you don’t want to see an offer for a different couch a few weeks later. But perhaps you’d be interested in some decorative pillows or a side table that looks like the perfect solution for placing your wine glass down. This is where cross-selling shines.
Use smart remarketing tactics
Remarketing is the absolute best way to automate upselling and get people to convert again with minimal effort on your end. While you will still need to configure and monitor your remarketing campaign, once they are up, they will essentially run themselves as you watch the results come in.
How a remarketing campaign works in a picture. Source: Clicksquad
Once you’ve taken the step of gathering each group of buyers into their relevant lists, it’s time to run some ads! Remarketing campaigns make this insanely efficient and easy. Configure remarketing campaigns in your favorite social networks and Google to appeal to specific buyers with the correct messaging.
An example of Madewell doing remarketing on Facebook after we search for women’s crop pants.
You absolutely need a strategy in place to show your customers items they would be most likely to buy within an appropriate time-frame. If the shampoo you sell lasts for an average of 60 days, then start remarketing them after 30-40 days of their last purchase. Keep these ads running until they convert because you don’t want to allow your past customers to get down to the last drop and then turn to their local pharmacy in desperation.
If you offer a points system where repeat customers earn loyalty points (Sephora and Ulta are good examples), you can use search and social ads to remind customers that they have points saved up to use toward a splurge!
There are plenty of statistics out there around the times of day and days of the week when people are most likely to buy, depending on what you sell. However, do not place complete trust in them. Instead, you should look at your own data, and then take advantage of ad scheduling features on search and social platforms to ensure you are serving your ads at the most critical buying times.
Successful upselling is based on understanding your customers’ needs and making the shopping experience more enjoyable. Remember, a good upsell always leaves the customer feeling like they won.
When to upsell and cross-sell
In our article about the basics of Upsell & Cross-sell, we discover that these selling strategies can be integrated into any stage of the shopping journey, including pre-purchase, during check out, and post-purchase.
Today, we will focus specifically on two options for you to promote your products in the holidays: milestones and throughout the shopping experience.
Time upsells with milestones
Conversations about the future offer a natural opportunity to bring up new ideas and projects you want to accomplish with your customers. Pitching an upsell is especially effective after helping execute a big win for your customers since they have definitive proof of your expertise.
Make multiple offers throughout the shopping experience
The goal of a product page is to sell. However, many e-stores end up losing shoppers by cramming their product pages with overwhelming offers and links to related (and even unrelated) products.
With careful moderation and organization, upsell and cross-sell are key to increase the average order value. Shoppers are becoming more and more sensitive to aggressive and spammy offers and become distracted from completing the original intended purchase.
Isn’t it lovely that your cart pops out right after you add an item, and a gift bag with similar products are recommended instantly? Source: SKIMS
So with a coffee store, it would be like this: A customer adds a 2lb bag of espresso to their cart for $10 and gets an upsell offer to buy 3lbs for just $5. Then on the cart page, they're offered a cross-sell for an espresso cup for an additional $4.50. Without the offers, this transaction would have been just $10. With the offers, the transaction is now $19.50 — that's an increase of almost 100%.
What to upsell and cross-sell
Choosing what to upsell and cross-sell is a quest for data analysis and trend study - where you can apply both your logical reasoning and your savvy taste. Whichever path you lean on, make sure to record and track its performance, as well as be ready to switch it up with a new experiment. Conversion rate optimization is a life-long process for all brands, and you should never sleep on your day of good sales. Stay alert and be pro-active.
Similar relevant products
This is when you must use customer data to personalize the offers as much as possible and suggest products that genuinely add value to the purchase. Remember to show a good range of similar products but don’t overwhelm your customer with too many choices. Decision-paralysis is real. Once the customers are annoyed with your recommendations, they will simply leave.
If nothing comes to your mind right now for ideas of upsells and cross-sells, or you don’t yet have a solid analysis of past purchases to make sense of, you can always introduce similar items. For example, Amazon offers customers a whole series of upsells and cross-sells, such as:
- “Frequently bought together”
- “Customers who bought this item also bought”
- “Sponsored products related to this item”
- “Compare to similar items”
- “Special offers and product promotions”
Another approach is to upsell your most sold or most reviewed products. Remember: It should add value and improve your customer’s life, without exception. Showing irrelevant products, regardless of how many reviews or sales they have, likely won’t convert.
Once a bath bomb is added to the cart, Sephora pops out to suggest other “happy” purchases that one might love (wow you see what they just did there?!). They also remind us of the free shipping for $50 order.
If your products are more component-based instead of version-based, you can provide additional upgrades or parts. Let your clients know about additional treatments or part upgrades you can offer. For example, you could provide a spotless window rinse, a stronger premium part for an appliance repair, or a particular type of fertilizer when mowing the lawn.
Incentivized future purchases
One way to make past buyers feel especially valuable is to incentivize upsells and reward loyal customers with discounts, free gifts, or free shipping if they purchase again.
Studies show that product cost, being an important decision making factor, is not the only one and is not only the most important one. Reviews, coupon codes and discounts, free shipping or shipping options, customer reviews, branding, and other factors influence the result of shopping. In other words, if your upselling or similar products suggested an item that satisfies one’s needs perfectly, it’s very possible that the customer won’t hesitate at a higher price.
You can also include free samples with every upsell purchase to incentivize conversions and raise awareness for other products - now that’s what we call a great “teaser”. Check out how Mac flawlessly does it this holiday.
Who doesn’t love a mini MAC as an extra gift? Source: maccosmetic
More expensive versions
This is a no-brainer solution to upsell when you offer different service packages alongside each other. It’s not uncommon for professionals to provide three service packages. Each package offers different services or service levels, moving from the entry-level package to the middle-of-the-road package, and all the way to the premium package.
Many brands use side-by-side comparisons to demonstrate the value of the more expensive version of the product, or how specifically the product is better for customers.
Dell provides a wide range of up-sells for customers with detail comparisons of their features and functions.
An important note when you upsell more expensive items is to ensure the product you’re trying to upsell is within a reasonable price range. The golden rule is 1/4, meaning customers will rarely pay more than 25% of what they planned to spend. If they have added a $100 dress to the cart, they will be more likely to change to a $125 dress than one that costs $300.
Even though bundling doesn’t require learning the theory of relativity, it does require a few best practices to follow.
First, products within the bundle should also be sold separately. If the customer can only get the item within the bundle, then it’s a single product, rather than a package deal. Meaning the consumer has no choice and receives no real perceived bargain. Second, recommend items that will fit your consumer’s current budget, not your lofty sales goals.
Bundles come in extremely handy when people will buy more gifts this holiday for distanced loved ones, so you’d better prepare for that.
Old Navy suggests 3 different clothing sets that go perfectly with the product, which makes it so time-saving and intuitive for shoppers.
How to craft an upsell or cross-sell offer
Instead of caving into the “free shipping on all orders” method, you can offer free shipping as an incentive for your shopper to spend more. Everyone loves free shipping, so give it to them - just not for free.
For example, you could offer free shipping on orders over $50. Now when you offer them an upsell, they'll have more of an incentive to accept it! One trick you could try is to trigger an upsell when they reach a certain cart value. For example, if they're at $45 and they need to get to $50 to qualify for free shipping, trigger a $7 or $10 upsell item, that way they get to the minimum, plus a little bit more!
Slyde, a store that sells body surfing boards, features their most relevant product add-ons right below their offer of free shipping and promise of stress-free returns, which is an irresistible offer.
It doesn’t matter how long we have been using this method, it’s gold. It’s the holiday season, it’s a busy time, so give them a feeling of urgency, such as a time-bound offer (It activates adrenaline pretty well). Tell them how grabbing the offer in this particularly busy time could be beneficial to them. Remember to price them wisely and know which products are more likely to get them to purchase.
Another way to create the FOMO effect is by communicating real-time updates on your stock (“only 2 items left”, or “someone from X just bought this item”).
In this global pandemic, people have become more and more nervous about any changes or potential loss. Give your customers the warm feeling of safety by including a guarantee to reduce buyer hesitation or convince them with real-life examples. Customers are naturally on guard when they sense an upsell. If you can gain their trust through a solid guarantee then your promotion will have a higher chance of success. This will convince them better than anything you have to say.
When and where possible, add user-generated content. That’s how genuine customer reviews bring value to the purchasing process. Most of your leads won’t take your words seriously, so show them how people who have used the upsell or cross-sell version and the problems they have solved.
People want to hear an impartial opinion, not an advertisement. According to Yotpo, “from reviews shared to social, the conversion rate is an average of 40% higher for Facebook, 8.4 times higher for Twitter and 5.3 times higher for LinkedIn.”
In other words, don’t be pushy. Showcase available alternatives but allow your customers enough space to make up their minds on their own. Use the right language to communicate the benefits of buying or the risks of not buying the recommended product. Value proposition is key. Educate customers on the risks, or missed opportunities, and of not taking advantage of the offer.
Don’t set an intrusive pop-up and reminder that screams “SALE” or “GET IT NOW” to their faces. It’s the holiday season, you wouldn’t want to miss any opportunity for sales.
We shall repeat this advice over and over again: Be personal, be personal, be personal, because customized messaging is powerful.
At a minimum, your cross-sell or upsell language should communicate on an individual level. As humans, we pay attention when someone says our name. That’s one reason why Starbucks’ baristas ask for our names with each order.
Use words like you, your, and yours. This way shoppers can imagine themselves with the product. Let your customers know that you do pay attention to them by mentioning their past purchases (for example: “a beige cotton shirt”), and then suggesting something similar (for example: “a beige t-shirt” or “a cotton shorts”).
A small gift
Congratulations! You've successfully convinced a customer to spend even more money on your deal - on top of the money they're already spending on the primary product.
Here’s the best tip that we will give you this holiday season: make sure to reward your customers for spending more - and for trusting your consultative guidance. You’ve seen them becoming more loyal (by buying more), so what’s better than that? Give them even more reason to keep being loyal (and maybe outspokenly supportive).
Missha even goes the extra mile and gives customers three free gifts with only 1 purchased item. Korean beauty lines indeed have mastered their strategy way better than US brands.
Here’s the best tip: make sure to reward your customers for spending more
Some ideas for showing your gratitude could include:
- A free gift-wrapping kit
- A thank-you letter
- A piece of company swag. Why not make them your (free) brand ambassadors that do free public marketing and promotion for you?
- A free gift. This gift can be an attractive promotion for a future purchase, so choose wisely. It can be your newly launched lines or the best-sellers that customers never tried before.
- Free samples of their choice (or your choice): Small trials of a product can lead to larger purchases later on.
- A free gift, sample, or discount code for a future purchase. Want your customer to buy the better product? Maybe give them coupon codes or a one-time discount. Monetary incentives always work best. If you want to make a higher upsell, be sure to break it down into a payment plan - for example, only $29/month for six months - to create the illusion of a lower price.
L’occitane offers both free gift and a gift-wrapping service in the check-out cart. How dare they execute this so elegantly that makes us never want to buy from any other brands?!
Remember that upselling is still selling, so don’t let your customer go with just one small pitch. Keep nurturing and following up with them to push them into that next purchase or upgrade. Building and maintaining an email list is without a doubt one of the best ROIs in the industry. In fact, some estimate the return on investment is as high as 3,800%, according to Hubspot.
What to do with the results?
Now, you started your campaign and got some results (or you are running the major campaign and collecting some data). We should never waste any bit of data, but to find efficient approaches to make the best out of those numbers.
Always look at data to see your campaign performance and ask why.
If you’re still baffled about how to look at the records, here are some helpful questions you should ask yourselves according to various types of results.
Note: We’re taking the number of purchases as an indicator, but it’s possible you have other important parameters in mind, like renewal rates, repeat purchases, and so on. This is just a model of how you need to think about the results.
- Case 1
- Number of purchases: increase
- Revenue: increase
- Question: It seems that the campaign is working. Why is it? What strategies helped you to achieve this?
- Case 2
- Number of purchases: increase
- Revenue: decrease
- Question: Has the average order total changed? Are the prices executed well? Are the prices of products in connection with cross-sells and upsells doing well?
- Case 3
- Number of purchases: decrease
- Revenue: decrease
- Question: Looks like the campaign is not working. Why? Do your customers need it? Does it bring value to them?
Some consider upselling and cross-selling advanced strategies - but we beg to differ and send them this article.
Now, tell us what you think about upsells and cross-sells! Do you think upsells and cross-sells can grow your business? Which strategy or tip did you find most helpful?
If you’re new to eCommerce, or just started to testing some upselling and cross-selling methods, take your time to experiment with each tip. It’s easy to feel overwhelmed by so much information and the massive workload of the holiday season, but you’ll get the hang of it!
Just remember: When set up properly, upselling and cross-selling can have a significant affect on sales - so don’t miss out on them!
If you enjoyed this post, you can check out more similar tips and examples from our intro guide of Upselling & Cross-Selling: All you need to know.