CRO specialist Peter Boyle outlines how your website can both delight customers and increase average order values using smart cross-selling campaigns.
How can you increase sales and revenue?
It’s a question that often leaves eCommerce managers scratching their heads. The common approach is to optimise top funnel elements in an attempt to increase overall lead and customer numbers. Whilst increasing conversion rates and expanding your customer base can bring good results, it’s by no means the most effective way of quickly securing extra revenue for your business.
Securing new customers is an uphill battle. It takes a long time to demonstrate the value of your products and build enough trust for a complete stranger to consider purchasing from you. Instead of focusing on methods that are slow to start and which bring comparatively low rewards, you need to look at how you can better sell to your existing customer base.
While your competition is paying through the nose to push their marketing and messages in front of as many new prospects as possible, you could be clearing up by increasing the average order value (AOV) of the sales you’re already making.
Through a smart cross-selling campaign.
What exactly is cross-selling?
It’s surprising how often cross-selling is overlooked, especially considering its prominent position in many of today’s largest online retailers.
In basic terms cross-selling aims to increase AOV by persuading your prospects to purchase extra products. It features heavily on sites like Amazon where for every product you view, you’re presented with a few supplementary add-on products.
It’s a method which has become a staple on many large retailers sites because, well, it works.
Imagine you run a business whose best selling product costs £10 and brings in £10,000 per month. You’ve been tasked with increasing overall revenue so you focus on an expensive optimisation campaign aimed at new customer acquisition.
After a lengthy campaign, you managed to secure a lift of 10% in overall sales, or an extra £1000 per month. Not too shabby.
However, a company with the exact same sales record decides instead to focus on a cross-selling campaign. For every £10 item that was added to a cart, they recommended a supplementary product worth £5. The campaign costs next to nothing to implement and is up and running in a fraction of the time of your optimisation campaign.
The effectiveness of cross-selling varies, but if we assume this campaign hits a 35% success rate (the same as Amazon) then monthly revenue goes up by £1750. That’s an extra £750 every month for a fraction of the work and cost and in a far shorter time span.
Cross-selling really is one of the most effective ways to increase overall revenue. However, don’t assume it’s as easy as simply offering more products to your prospects.
What makes an effective cross-selling campaign?
Make your offers relevant
Your primary concern with a cross-selling campaign should be ensuring that your offer is relevant. You’re aiming to offer more value to the customer, not to cause hesitation and unnecessary friction. If a prospect adds an exercise DVD to their cart, you’d have little luck offering them smoking paraphernalia or a double chocolate gateaux. Those items may well reduce overall conversions.
Finding the perfect product isn’t exactly easy. Thankfully there are three effective methods for promoting cross-selling which should also help you zero in on the perfect products to offer.
1. Supplemental, But Not Essential, Products
In certain industries, the usefulness of products can be greatly enhanced with a few small extras. Take the tech sector as an example. The variety of add-ons and enhancements available make it the ideal industry for cross-selling supplementary products.
For instance, a customer purchasing a TV would likely be happy with nothing but the television itself. However, their enjoyment of the product may be enhanced with a wall mount, HDMI cables or, as in th below case from PC World, a brand new sound system.
2. Get the Set
Completing the set is a method often employed again by the tech sector (think full audiophile setups), but also to great success in fashion retail. Asos uses the “get the set” method to great effect.
Rather than taking the old-fashioned approach and displaying each item as a singular piece on a plain background, they model the items on real people as part of an ensemble. Towards the bottom of the page, you’re presented with the option to add the “shop the look” and add the rest of the outfit to your basket.
3. The social approach
The social approach differs a little from every other method of cross-selling. It’s used most notably by Amazon with their “frequently bought together” section of every product page. It’s interesting in that it doesn’t rely on predetermined algorithms, product sets, or “expert” recommendations. It uses the browsing and purchasing behaviour of the wider customer base to offer dynamic product couplings.
It’s an incredibly effective method as the product combination suggestions are often not connections you’d traditionally make or recommended by industry pros, yet still work incredibly well together.
But what about deals?
When conversions are low there’s always the option to offer a money saving deal or bundle. It’s one of the oldest tricks in the book and has proved time and again that there’s nothing better to incentivise customers than giving them a little something back.
When it comes to cross-selling and upping your AOV, money off incentives generally take one of two forms.
1. The bundle
As with the “get the set” approach outlined above, sometimes a single purchase just isn’t enough to get the full benefit of a product. In “get the set” you can pick and choose which elements of the outfit you like the most to recreate as much, or as little, of the overall outfit as you like.
The bundle deal, on the other hand, is a pre-determined set which is offered at an often heavily discounted price. Below is an example of a full sound system set from Richer Sounds offered with a discount of just over 20%.
Cross-selling a bundle seriously limits the suitability of your offer. The number of people who would want the above full set is far lower than those who are just looking for a single component. However, when for each successful conversion you’re effectively tripling the order value for that customer.
2. Order thresholds
This is one of the most popular cross-selling techniques and can be seen at every level of product sales. It’s technically not cross-selling as you’re not actively recommending a supplementary product to your prospects. You are however incentivising them to spend more by notifying them of an order discount threshold such as the below.
Whilst not technically a traditional method of cross-selling, it’s incredibly effective of increasing AOV and overall revenue. It formed the lynchpin of a campaign we ran for M&S France which brought a 13:1 ROI and over 3000 new leads.
By offering this deal you’re creating a win/win scenario for all involved. You as the company are increasing your AOV whilst the customer, despite spending a little more money, is getting incredible bang for their buck. Coupling this with the traditional cross-selling technique of suggesting supplementary products can have a profound effect on your overall AOV and revenue.
Whether you decide to take the traditional approach and recommend specific products for your cross-selling campaign or in fact rely on a bundle or offer to sell more products and increase AOV, you need to remember the golden rule of cross-selling.
It’s all about increasing value for the customer by promoting related products.
Stop thinking about what’s going to bring the biggest lift for you as a business and instead look at what provides the most value. You may end up recommending products which bring a smaller AOV increase, but you’ll create a far better campaign which will stand the test of time and continue to bring a good return for months or years to come.