Business owners are always looking for innovative ways to maximise their sales. The two most important strategies in this regard are upselling and cross-selling. Of course, simply implementing these strategies will not guarantee results. Instead, merchants need to come up with comprehensive strategies for both. They must be tailored to the business and in line with the target audience’s requirements.
As the title indicates, this article will discuss the benefits and best practices associated with:
- Magento Upselling
- Magento Cross Selling
Before we go further, let’s first understand what these two terms mean.
What is Magento 2 Upsell Products?
This involves convincing the customer to buy a pricier product than they originally planned. Suppose you are an online retailer offering electronics such as laptops and desktop computers. A potential customer is looking for an i3 12th Generation laptop with 128 GB SSD and 8 GB RAM.
During the process, you can offer them a higher end laptop with i3 13th Gen Processor, 256 GB SSD, and 12 GB RAM. While the customer planned to buy a basic laptop initially, they become more interested in the higher end laptop. Obviously, the higher end laptop will be more expensive, thereby increasing the retailer’s sale value.
What is Magento 2 Cross Sell?
This is a sales technique in which you convince users to buy additional/related products, apart from the primary product they are about to buy. Let’s build upon the previous example for better understanding. A customer wishes to buy a laptop. The store will recommend them a bag, wireless mouse, and other related items.
Of course, these items are not necessary, but they can enhance the user experience. For example, the bag can protect the laptop against dust, while the mouse can be used for gaming purposes or is a perfect equipment for people that are not comfortable using a touchpad.
Magento 2 Upsell Product vs Magento 2 Cross Sell
As mentioned earlier, both strategies are an effective way to increase overall Magento 2 store sales. While the basic purpose of both these strategies is to increase the average order value, they differ in their approach. One recommends related products, while the other encourages to opt for a pricier product altogether.
Benefits of Magento Upsell and Magento 2 Cross Sell
Since both strategies have the same objective, there’s no point in discussing their benefits separately.
Higher Average Order Value
The most notable benefit of both these strategies is that they increase the average order value. If a customer initially wanted to spend $100, effective cross selling and upselling can increase the order amount to $150 or even $200.
Effective Utilisation of Marketing Resources
Online store owners spend thousands of dollars on marketing each year. Despite it, the return on investment is quite low, even for well established stores. These two strategies can enhance the return on ad spend. Once the customer reaches the buying stage, it is more financially beneficial to encourage them to spend more rather than vying for additional customers. Remember, the cost of acquiring a customer is quite high.
Enhances the Shopping Experience
Another thing to consider is that the target audience demands personalisation more than ever now. Due to their very nature, cross selling and upselling require a deep understanding of user behaviour. By catering to their requirements, merchants can ensure greater personalisation. In turn, users are likely to reward the store with repeat purchases and greater loyalty.
Inventory Management
Upselling and cross selling are quite beneficial with regards to inventory management. Naturally, every store has products which take a while to sell or don’t sell at all. Through cross-selling, stores can bundle these products with popular items, thereby increasing the probability of their sale.
Usually, high-value items are only considered by those who have the budget for it. Most users apply a price filter based on their budget. Through upselling, you can easily provide the valuable products more exposure. Users may consider them for whatever reason, allowing you to sell these items quickly.
Customer Satisfaction
When you offer items which really enhance the primary item’s value or ensure value for money, then it helps build trust. Customers appreciate businesses that consider their best interests rather than monetary gains alone. This can help lead to repeat purchases, thereby increasing the store’s sales.
Moreover, customers have no reason to shift to another store since they are extremely satisfied with what they have to offer. In other words, your Magento 2 store’s churn rate decreases, while the average customer lifetime value increases. All in all, you and your customers benefit equally.
Best Practices for Cross-Selling and Upselling in Magento
Now, let us turn our focus towards the best practices for cross selling and upselling in Magento 2.
Use Tools
Firstly, Magento 2 has various built-in tools for cross selling and upselling. These features analyse the customer’s behaviour, past purchases, preferences, and other factors. Of course, you may also opt for third party extensions such as ‘Who Bought This Also Bought ’ for advanced features.
For instance, this extension allows merchants to auto-suggest products frequently bought together and display the banner at any position or page. Merchants should also consider using email marketing tools for cross selling and upselling purposes rather than rely on the online store alone.
Strategic Placement
Most merchants do not understand the importance of strategic placement. When cross selling, we recommend doing it on the cart page. The reason is that this stage indicates that the user is ready to complete the purchase. Of course, they may abandon the cart, but let’s not delve into it for now.
You can convince them to buy more products, provided they add value to the primary purchase. As far as upselling is concerned, we recommend doing it on the product page and the checkout stage. On the checkout stage, you can offer them last-minute discounts to convince them to buy a higher value item.
Create Logical Bundles
If a user is buying a laptop bag, it makes no sense to offer them jeans or a t-shirt as part of the cross-selling approach. After all, the two are completely unrelated. Neither adds value to the other. So, when creating bundles for cross-selling, make sure there is a logical connection between the two.
There are various extensions available for this purchase, including the Frequently Bought Together extension by FME. Such extensions make it easier to cross sell through features such as offering discount on recommended products. For upselling, ensure that the product description clearly highlights the extra features/value.
Segmentation
Each business has different customer groups:
- Loyal
- Need-Based
- New
- Impulse
- Referred
It is imperative for any store owner to understand that the needs and wants of each customer group vary. Therefore, when engaging in cross or upselling, there is a need to tailor the strategies accordingly.
Monitor the Performance
There’s always room for further improvement. The same applies to your up and cross selling strategies. Use A/B testing to experiment with different approaches to these strategies. In other words, try different product bundles and pricing to determine which works the best. We even recommend changing the placement.
Be Customer-Centric, Not Greedy
The purpose of upselling or cross selling should not be to increase the average order value. When you prioritise money over customers, you may benefit from a temporary increase in sales. However, in the long run, even your loyal customers will leave. So, ensure that up and cross selling suggestions add value to the customer.
Automation
Lastly, automate your up and cross selling suggestions. There are several tools available for this purpose. The tool will automatically trigger a campaign based on various aspects, such as cart abandonment or minimum order value.
How to Add Cross Selling and Upselling Products in Magento 2?
Follow the below steps:
- Login to your Magento 2 Admin Panel.
- Navigate to Products -> Catalog
- Select the Desired Product
- Click on the Edit button
- Find the ‘Related Products, Up-Sells, and Cross-Sells’ section in the left-hand menu.
- Click on the Add Cross-sell Products or Upsell Products option
- Select the Desired Products and click on Save
That’s it. Of course, the in-built feature is quite basic. If you wish to get the maximum out of your cross and up selling strategies, we recommend using a third-party extension. They offer numerous advanced features, including automation. For more information, check out Who Bought This Also Bought and Frequently Bought Together .
Final Thoughts on Magento 2 Upselling and Cross Selling
This concludes our article on best practices for cross-selling and upselling in Magento 2. If you have any questions, reach out to our support teamsupport team . Once again, we would like to reiterate that the priority should always be the customer. The moment you start neglecting the customer in the hopes of maximising revenue, you will start losing even your most loyal customers.
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