How to up-sell, cross-sell and optimise
If you've ever been asked if you'd like fries with your burger or offered a larger portion at only a slightly higher price, then you'll understand the concept of cross-selling and up-selling. While the first encourages you to buy a complementary or related product or service, the second incentivises you to buy a bigger or better product than you might have originally intended.
Likewise, if you have ever been given a free drink at a favourite restaurant, you'll have already been rewarded for your loyalty as a regular customer.
There's no reason why you can't apply exactly the same principles to your web business to dramatically increase the volume and value of your transactions and boost your revenue to new levels of profitability.
There are five ways you can do this:
- Offering a greater quantity for a slightly higher price
For example, giving a three-for-the-price-of-two discount or a 'large' portion for a 'medium' price, such as a case of wine for the price of 10 bottles.
- Offering complementary products
For example, promoting accessories for electrical goods, such as batteries, tapes and carry-cases.
- Offering related products
For example, offering a discount on boots when a customer buys a winter coat, or swimwear with summer clothes.
- Offering a premium product
For example, ensuring that customers can't visit your site without being aware of the existence (and the advantages) of your highest-quality, big-ticket products.
- Rewarding loyalty
For example, offering a virtual discount voucher redeemable the next time your visitors your site, or if they refer you to friends and family.
Making the offer
How you express the offers and how you integrate them into your web site format and transaction system is between you and your designers. However, there are three main approaches, according to the three categories of e-commerce businesses:
Repeat nature businesses - baby supplies, groceries
What you are aiming for here is to make your web site a regular stop-off point on your visitors' online shopping travels. What you need are incentives to keep them coming back, such as a discount on their next order or a 'points' account that accumulates with each order they place and that they can 'spend' on your site. The reward cards offered by the supermarkets are an excellent example of this and are extremely effective in binding the customer to the supplier on a long term basis.
Another idea might be to use the data that you accumulate on each customer to make targeted offers. For example, if a customer regularly buys a particular product, then it's highly likely he is also buying related or complementary products (nappies with baby toiletries, for instance). If you offer a discount on these related products, you are not only increasing your sales, but helping the customer to streamline his shopping at the same time. Likewise, a drinks e-tailer could offer regular customers a special discount on premium products, such as champagne or related products such as glasses and cocktail accessories.
Single purchase businesses - furniture, hi-fi, computers
Because customers will only visit the site for a one-off purchase, the objective here is to ensure they spend as much as possible while they are there. There are a number of ways to do this. You could offer competitively priced product 'bundles' such as the PC/printer/scanner/software combos offered by computer e-tailers. You could also highlight special offers on related products, such as half-price speakers with every stereo, or you could up-sell visitors to buy the premium products, for example, by offering a free carrier or tie with your designer label suits.
Another important point to make is that when it comes to major purchases, your customers need the decision-making, specifying and purchasing system to be as stress-free and as positive as possible. Therefore, you'll need to give them a first-class service throughout your site and present your credentials impeccably. The site itself must be fast-loading, the navigation must make sense, every process needs to work, pictures must be in place and links must be operational. (There's more about this in the Functionality instalment). What's more, your site needs to look the part. Plenty of top brands lose out online to smaller competitors simply because the site didn't have the same level of quality, choice or service.
Random or infrequent repeat businesses - books, music, clothes
The objective in this case is two-fold: one - to encourage visitors to come back again more quickly than they might otherwise have done and two - to get people to spend more while they are there. We have covered the second point in the section above, but to encourage visitors to come back again, you could, as with the repeat-purchase scenario, offer loyalty discounts and incentives. Likewise, you could draw attention to the rest of your product range or offer volume discounts such as two CDs for the price of two.
