3 Ways to Increase your AOV Through Cross-Selling and Upselling
Cross-selling and upselling are two of the most powerful ways to generate additional revenue, without all the stress and expense of acquiring new customers. With upselling and cross-selling, you focus on increasing the “AOV” (Average Order Value) of each customer, getting the absolute most out of every conversion you’ve already acquired.
According to some reports, upselling increases your revenue by 10-30% on average, and upsells are around 68% more affordable than acquiring a new customer. At the same time, cross-selling increases sales by 20%, and profits by around 30%.
So, how do you leverage cross-selling and upselling strategies the right way for your brand?
What are Upselling and Cross-Selling?
To take full advantage of these strategies, you first need to know what they are.
Upselling and cross-selling are sometimes used interchangeably in the sales and marketing space, but they actually refer to two different concepts.
With cross-selling, you encourage your customer to purchase something in conjunction with the primary product they’ve already added to their basket. For instance, if a customer on your website adds a necklace to their basket, you can suggest complementary jewelry to finish the ensemble.
With upselling, you encourage the purchase of an upgraded or enhanced version of the original product. For instance, using the jewelry store example, you’d offer your customer the chance to switch their purchase of just a necklace for a whole jewelry bundle including a necklace, earrings, and maybe a matching bracelet.
How to Improve your AOV with Cross-Selling and Upselling
Offering your customers additional products to accompany the items they’ve already added to their basket or convincing them to make a more expensive purchase will naturally increase the revenue you can potentially access.
However, like any sales strategy, you’ll need to make sure you’re approaching the process correctly.
To make upselling and cross-selling a success, you’ll first need access to information about your audience. That’s because personalized recommendations and suggestions will always drive more sales than throwing products at your customers at random.
According to Invespo, personalized cross-selling and upselling strategies may only apply to around 7% of website visits, but they also account for around 26% of revenue.
Collecting information about your audience so you can provide specific recommendations on what they should buy means you can transition from being just another pushy sales company to a brand offering genuine value.
Once you have the right information to personalize your suggestions, you can use one (or all) of these 3 strategies to guarantee an increased average order value.
1. Suggest a Small Number of Specific Products
Pushing complementary products to the cart and checkout page can significantly increase your customer’s basket size. However, suggesting too many different products at once can be problematic. While you might want to give your customers a range of options, studies show that the majority of consumers feel overwhelmed when they have too many choices.
Consider adding one or two products to your suggestions in the cart page or create a carousel so your customers can skip through and look at other recommendations when they feel like it.
According to a study from Bain, reducing the complexity of the purchasing process and narrowing the choices your customers can make can boost revenues by up to 40%, and reduce costs by 35%.
To ensure you’re suggesting the right accompanying products, leverage insightful information about your target audience to showcase dynamic content. Dynamic product suggestions based on the items your customers were looking at in the past, or the products they’ve purchased before will naturally be more relevant, and more likely to ensure conversions.
2. Create Dynamic Bundles
Another excellent way to increase your order value instantly is to suggest a selection of items frequently purchased together. This is a great way to make your customers feel like they’re getting a good deal (particularly if you offer a discount on a number of products).
Suggesting frequently-bought-together bundles also means you can simplify your customer’s purchasing process yet again. If they see an outfit they like on your store, for instance, it’s much easier for them to click a button to purchase the entire bundle, than it is to look for each item individually.
You can use tools to automate bundles suggested when your customers add specific items to their cart. It’s also worth looking into dynamic content suggestions, so you can create different bundles for your customers based on items they might have already purchased.
Remember, the more relevant your suggestions, the more likely you are to get a sale.
3.Try Post-Purchase Cross-Selling
Finally, your opportunity to increase the average order value of each customer doesn’t necessarily end after your customer has checked out. You can offer customers a final opportunity to add something else to their basket and avoid paying for extra shipping on the “Thank You” page.
You could also use the receipt or cross-sell email confirming the order to provide suggestions on other products your customers might want to buy in the future.
Learn more about how to write effective cross-sell emails.
Even if your post-purchase cross-selling efforts don’t immediately convince your customers to buy something else, they could make it more likely your client will come back and buy something again in the not-so-distant future.
Master the Art of Upselling and Cross-Selling
Upselling and cross-selling are two of the most valuable strategies you can use to increase your average order values and earn more profits from your business.
With the techniques above, you can improve your customer’s experience, enhance your potential revenue, and boost your chances of better long-term sales, all without investing a fortune in extra marketing and sales strategies.
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