Are you struggling with low order values, or worse, high customer acquisition costs? Is the lifetime value of your customers stagnant?
When you’re already spending a hefty amount to bring customers to your store, your goal should be to increase their Average Order Value (AOV). Along with that, you should be looking to give them a great customer experience with product recommendations that will elevate their customer loyalty and increase their Lifetime Value (LTV) with your brand over time.
That’s the power of effective cross selling. It helps your customers discover products they might want and creates a smooth customer experience, leading to an increase in revenue for your ecommerce store.
Cross selling is a marketing strategy that encourages customers to purchase a range of complementary products to the items that they’re going to purchase or have recently purchased.
But why does it matter?
It increases average order value (AOV) by getting customers to check out with more items. Plus, exposing your customers to a wider variety of products also helps in brand building and should lead to increased retention as a result.
The good news: You don’t have to spend extra money to increase your average order value or sales. This means higher profitability for your store as there’s no added CAC and other costs like shipping and packaging remain the same.
Cross Selling Vs Upselling
While cross selling is a strategy that focuses on suggesting complementary and related products, upselling focuses on getting the customer to check out a more expensive product.
Let’s suppose a customer added a mobile phone with 64 GB of storage to the cart. Upselling would mean suggesting a more expensive version, probably the same mobile but with a storage option of 128 GB, while cross selling would mean suggesting complementary products such as headphones, and other mobile accessories such as a mobile cover.
The focus of cross selling is improving the customer’s experience with your brand and products by exposing them to a variety of products that work well together. It’s both a revenue driver and a retention strategy as a better experience and more loyalty will keep customers coming back.
With upselling, you still want to improve the customer’s experience with your product, but you do this by getting them to replace the lower-priced item with a higher-priced one by presenting it as a better or more “premium” experience/result.
Cross Selling Tools in Peel
Many of Peels top retention tools are great for crafting your cross selling strategy. Here’s a shortlist of the top tools that can help you cross sell like a champ:
The Purchasing Journey feature gives you a visual map of your customers’ purchases. It shows you what products your customers are most likely to buy in subsequent purchases, based on what they first purchased.
Need a great way to map out what product recommendations appear on what pages and carts? Purchasing Journey is the perfect place to start.
Yup, that’s right. We automate Market Basket Analysis. If you’re not familiar with it, Market Basket Analysis shows you what combinations of products are most commonly purchased on your site.
Ecommerce teams have traditionally done this by hand, which means manually pulling and cleaning tons of data, creating complex formulas, and tons of time spent in endless spreadsheets.
But now, Peel automates Market Basket Analysis for ecommerce teams, which provides the perfect signals for cross selling. Product recommendations? Check. Bundles? Check.
LTV by Top Products
Here’s a cool hack you can find in our Cohort Analysis. Take LTV by customer, choose our “Combined Cohorts” option in the filtering options, choose all the months you want to look at, and then you can select your top 10 products.
That’ll show you the lifetime value of customers who first purchased each of your top 10 products in their first purchase. If you’re using cross selling as both a customer retention tool and a means of driving up LTV, this is the move!
It’s a great way to help you determine what products you’re pitching in your cross selling efforts.
So there’s what you can use to back your cross selling decision. Here are some practical moves you can make to execute on your site.
How To Cross Sell
Here are 5 strategies you can use to leverage the power of cross selling for your ecommerce store.
1. Cross Sell At Multiple Touchpoints
There are three key areas where you can make use of cross-selling:
- During checkout
- Post Checkout
The purpose here is to cross-sell different products while customers are still figuring out what to add to their carts.
Lula Fox does this by adding a “Shop the Look” option on their store where customers can choose to shop the whole range of makeup products that go with a particular look.
When shoppers have already added items to their cart, they are in a better place to act on the cross selling options you show them.
Crate and Barrel does that by showing cross-selling options when an item is added to the bag.
That’s not all. At the final stage of the checkout process, the brand first shows the product someone is about to buy, followed by additional items a shopper might like to purchase.
You can showcase cross selling options on your thank you page after a customer has finished placing an order.
Lucyd, a smart sunglasses brand, did that and the result was an average thank you page order value of $100+ and a 5.6% boost in their net revenue.
2. Offer Product Recommendations
When cross selling doesn’t feel like you’re just pushing products, it will result in more conversions.
One way to do this is by displaying options that are essential to a product’s performance. For example, here’s how Instax recommends different film products when a person is shopping for a polaroid camera. The film is essential for the product and so it has a better chance of selling.
This strategy can work for a whole lot of other items such as electronics, clothes, bags, and even pet products.
3. Create Bundles
Bundling is an effective strategy to package items that go well together to increase AOV. These bundles are often presented to customers at a discount to encourage them to click on the “Add to Cart” button.
Here’s how Look Fantastic creates bundles with relevant products:
4. Make Use of Free Shipping Thresholds
Many ecommerce stores put a threshold of the order value of $25 or more to qualify for free shipping.
You can then strategically place cross selling options to get them over this threshold and increase AOV in the process.
If not free shipping, you can activate a free gift card for orders over a threshold. That’s what Licorice does by showing different product recommendations and highlighting the amount required to qualify for a free gift on the top.
This strategy helped Licorice lift their AOV by 17.16% with 1 in 3 orders coming from product recommendations.
5. Trigger Email Campaigns
Nearly 22% of all emails are opened within the first hour.
This shows that your cross selling email campaign can bring great results if devised effectively.
Here’s an example by Dollar Shave Club where the customer receives an email like the one given below just before their order is sent.
They ask their customers if they want to add a few more products to their box before it ships. Why does this work? The customers are still in the buying zone and they can add these value-adding products to the cart by just tapping a button instead of going through a lengthy process.
Best Cross Selling Apps
Cross selling tools help you make sure that your strategies don’t end up being too salesy or ineffective. Here are three tools you can use:
- ReBuy: With ReBuy, you can make use of AI-powered recommendations for cross selling and deploy them at key decision points.
- Privy: With Privy, you can create simple cross selling pop ups that increase AOV without the need for offering a discount.
- ReConvert: Without making it feel distracting, ReConvert helps you showcase targeted product recommendations after a customer has made the purchase.
- Slide Cart: You can motivate customers to increase their order value by setting thresholds, placing cross sell items in the cart drawer, and much more with Slide Cart.
Increase AOV and Revenue with Cross-selling
With tactics such as cross selling, you can capitalize on the shoppers and customers your store already has and increase your AOV and sales in the process.
But how do you decide if your cross selling efforts are bringing the results you want?
For that, you need to track your AOV, LTV, repurchase rate, total sales, and revenue. Peel helps you do just that, so you can experiment and improve your cross selling strategies in the process.
Try Peel free for 7 days and set your new cross selling strategy in motion.