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28.Nov.2017 Ram - eCommerce
eCommerce marketing is like a bottomless pit, there are million things to do to from acquiring new customers to retaining old customers. How many ever conversions you may get, unless and until you are successful in increasing the average cart value, it is difficult to get good ROAs and be profitable.
In this blog, we are going to discuss how to improve your average cart value by improving product visibility using these two major strategies:
Upselling and cross-selling are the most undermined strategies, but when implemented the right way, it is the best and the most cost-efficient way to run a profitable online business.
Upselling helps in persuading the customer to upgrade from their current choice. This technique will push them to spend a little bit more than the original product they intended to buy.
For example, your customer is browsing your online store to buy a smartphone with 16GB storage. They are plenty of choices and they have zeroed in on their favorite build and make. But, before they hit the payment page, a slightly better phone, one with 64GB that is presented, for an additional $50.
Now, that is 4x the storage for just extra $50. Most customers are tempted to change their choice since the new choice gives more value for money.
This is upselling at play. It makes the customer spend an extra $50 dollars on a product that they never wanted to buy initially. If you think about it, this is what most in-store sales rep are trained to do. By using the same principle, your online store can generate additional income by subtle upselling techniques.
Now, cross-selling is something different and much easier to implement in your eCommerce store.
Now that the customer has bought the smartphone which has 2x storage, more than what they initially wanted to buy. Now, before they can checkout of the store, display product recommendations stating ‘Customers who bought this also bought’.
When the right suggestions are given, customers are more open to picking up these additional products, invoking additional revenue. For successful cross-selling strategy, the customers are shown complementary or related product suggestions like a headphone, a power bank, phone case, etc.
Both concepts, upselling and cross-selling, are implemented with the view to generate more revenue from the particular transaction. It stems from inculcating the need into the customer, when the product is up-sold for a fraction of the cost, the customer is more open to being ‘up-sold’. It’s a about making the right suggestions.
If you are running an online store, you cannot simply ignore integrating upselling and cross-selling strategies into your eCommerce process. According to this Kissmetrics infographic, you can earn an additional 10% to 30% in revenues by using upselling and cross-selling.
As for our customers, Hi Vis Supply, they successfully increased its average cart value by 25% in less than a month by integrating an upselling & cross-selling concept based out of our signature product, personalized product recommendations.
Bundling refers to putting together essential items that the customer might need along with the product being bought. Let’s assume you are buying a camera. Along with the camera, you might need additional batteries to last longer shoots, a tripod for shake-free shots and a memory card for more storage.
When all this comes together in a single order bundled together, it becomes easy for the customer to make a purchase decision. In most cases, the ‘just in case’ mentality kicks in making the customer to buy the bundle as a whole than buying just the camera.
You can also give multiple bundle options for the customer to choose from. This makes them more delusional to stick with one product and persuades them to buy a bundle instead.
I am a great fan of Spotify. I have a been using their free service for quite a long time. Although I used to hate the interruptive ads, I never had planned to upgrade to a paid plan. The thought of upgrading to a paid plan never occurred to me, until I came across the comparison of features between the paid version of the premium plan.
As soon as I saw what features came for the paid plan, there was no looking back. This side-by-side comparison of paid and free plans definitely is a motivator to upgrade than stick on to the not-so-great free plan.
The same applies to your online store too. Whether you are selling products or services, show what more you are offering for an additional price. Informed customers will be more than willing to spend on your store.
Capitalize on customer’s psychology of impulsive shopping behavior and make them spend more with intelligent product suggestions. There are custom-built tools in the market that can display product recommendations based on the customer’s past browsing and shopping behaviour. Even data of recently seen products can be used to re-target these customers. Ultimately, this will help you ramp up your conversions significantly.
Upselling and Cross-selling is a proven tactic that most online store owners should use to increase their sales. You can easily implement these with tools like TargetBay product recommendation to display product recommendations the right way.
So, with 2018 coming up, how are you planning to use upselling and cross-selling on your online store? Let us know and we will help.
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