Tuesday, December 16, 2014
For any online business, one of the easiest ways to increase the order value and revenue is to sell more to the customer. As a business owner, you should never underestimate the importance of an existing customer. Always remember one rule of thumb, it cost more to find a new customer than selling more to your existing one. Your existing customer will always be less sensitive to the price and more loyal to your store as compared to a new customer.
An effective strategy known as “Cross-Selling” is a great marketing tactic that aims for selling more products/services complimenting the item that a customer is looking to purchase. Before we go further into learning more about this strategy, it is important to understand the definition of cross-selling. Why? As the term up-sell and cross-sell are usually talked about together and it is important to understand the difference. As the name implies, an up-sell (selling an upper value product/service) is a marketing technique for suggesting your customer a higher priced value item in replacement of the item that your customer is looking to purchase. While, cross-sell is a technique of showing the related items to your customer and asking to buy more in addition to the item that is already in the shopping cart. The two terms are interchangeable in many scenarios because the ultimate goal is same – ask your shopper to spend more money (or in other words sell more to the customer).
Ask for more
Did you know 50% of the people buy additional products if asked? It is always a good marketing strategy to ask your customer to buy more. One of the famous cross-sell statements is - “Would you like fries with that?”. It will be surprising if next time you go to a fast food place and they didn’t try cross-sell and up-sell techniques on you. You have probably heard these statement many times:
- Would you like to add drink to make it a combo? - Cross-sell
- Would you like to go from medium to a large size drink for an extra dollar? - Up-sell
You can easily use these techniques on your online e-Commerce store by presenting your customers with additional related products that they can add to their shopping cart during the checkout process. This kind of marketing will significantly increase the average order value on your online store site
Choosing the related product
The art of cross-selling starts with a deep understanding of your products, market and your customers. A cross-sell offer does not need to be any other item or product. The offer should be closely related to the product initially listed for purchase like extra accessories, maintenance service and support. Here are a few examples of offering related/cross-sell products:
- Display a wall mount if anyone is buying a T.V
- Display a hands free or external battery kit if anyone is buying a mobile phone
- Display a carry bag if anyone is buying a laptop
- Display paper or ink if anyone is buying a printer
With your related product/cross-sell strategy, try educating the customers on variety of what your business has to offer by presenting relevant products and services
A few important points to keep in mind:
- Cross-sell strategy works better if the suggested item’s price is lower (or even half) of the primary product that is being purchased
- Too many suggested options can easily overwhelm the customer so keep the options limited
- Focus on providing maximum value to the customer while suggesting additional options as a whole package
Displaying cross-sell products
The best place to display related products / cross-sell options is on the product page as well as the shopping cart during the checking process. This kind of cross-selling is based on the same style as “Would you like fries with that?”. The placement of the suggested items is quite important and asking your customer to buy more during the checkout process makes a logical sense because the customer has his/her credit card out during that time. Many online stores display the related product under the product description section on the product page or in the right column (related products can be used as an up-sell technique). The placement of cross-sell products in the shopping cart is usually below the list of items in the cart along with thumbnail images so that the suggested items are clearly visible.
The art of cross-selling products has been around for a long time but still many online businesses lacks in using this strategy that can potentially increase the average order value. While running an online store site, you can spend a lot of time in crafting this strategy and setting up related / cross-sell products, but if done correctly, the effort will certainly payoff by the increase in sales / order value without any additional marketing costs.
nopCommerce supports related products. Displaying related products is a wonderful tool to "up-sell" customers while they browse a product's page or before checkout. nopCommerce also offer the feature of cross-selling by which you can suggest your customers additional items during the checkout process in order to increase your sales and order value.
Author: Lavish Kumar