Strategies to drive more sales come down to a few fundamental aspects: increase the number of purchasers, increase the average purchase frequency for each customers, and increase the average spend on each order. Total sale is essentially multiplying those 3 areas.
SEO and marketing generally bring more people to the store and therefore increases number of purchasers. Re-marketing efforts coupled with special offers and discounts nudge customer to purchase more often. And today we will talk about a popular tactic that can help increase AOV (average order value) through cross-selling.
What is Cross-Selling?
Cross-selling is a strategy to promote another product that is related to products in the shopping cart. Cross-selling products are usually in different categories or even different styles. For instance, you are ready to pay for this t-shirt, and on the check-out page, the store suggests a pair of jeans to go with it or t-shirts with different designs that catch your eyes.
People usually get confused by cross-selling and upselling, which, on the other hand, is another popular strategy to sell a better and more expensive version of a product that the customer is already buying.
While cross-selling and upselling are both being widely used in the e-commerce battlefield, today we will focus on cross-selling strategies and examples with practical details for you to utilize the tactic to boost your sales.
How to create effective cross-selling strategies?
You must have had a similar shopping experience on e-commerce websites, but you didn't notice that this is also a kind of cross-selling. For example, when you visit an e-commerce website, the store often recommends related products based on the items you have already added to your shopping cart or your purchase history, and you possibly would be attracted to them because of their relevance, and then add a few of those in your cart.
When developing a cross-selling strategy, the end goal is increasing the customer's average order value. To do it effectively, you typically need to use a software that understands relationship of products in the catalog and potentially the customer's purchase history in order to suggest more personalized product recommendations.
3 Cross-Selling Strategies
The key of a successful cross-selling is in both the quality and relevance of the products you recommend and the wording you use in which you present those cross-selling products.
1. Segmentation & Customized Information
One of the easiest and most common ways is to provide consumers with purchasing advice based on their past purchases. The only thing you need to do is to pay attention to their purchase histories, such as colors they prefer and their sizes, and use this information to group different types of customers and send customized newsletters, messages, or place remarketing ads to attract them to buy again.
2. Provide special offers to induce additional purchases
When consumers are shopping on your site, it’s a solid way to make more sales by providing special offers at appropriate timings. For example, when a customer adds a top to the shopping cart, you can suggest him/her purchase a pair of pants that goes well with the top for a 10% off or free shipping.
3. You might like… / They also bought this…
Many e-commerce sellers skillfully use "other customers' previous purchases" to bring up current customers’ buying interests, and eventually let them buy more. For instance, when a customer is shopping for a suit, you can actively recommend shoes that are often ordered with the suit, because after all, it is difficult to sell another suit, but they have the opportunity to buy accessories that match.
Recommend other popular items when the consumer selects a particular piece of clothing.
Apart from recommending similar products, some e-commerce companies will also take the initiative to suggest different styles of products to match the products selected by consumers.
Complete the Package
Put similar items in a package, or create a kit for a specific purpose, sometimes for a reduced price, to convince and encourage customers to buy the whole set while at first, they might just want to buy one of the items in the package!
Measure & Experiment
To conclude, cross-selling is a common and effective way to boost your AOV and hence more total revenue. But as with every other tactics, it is important to do it in in a balanced way and you don't want it to potentially hurt your conversion rate or other critical business metrics.
We highly recommend running cross-selling in A/B testing environment, and you can even test different cross-selling strategies to pick the best winner.
Finally, cross-selling is just one of the ways to increase AOV, and we will provide more business tips on similar topics later on. Hope you enjoyed the read!
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