Effective Online Cross- and Upselling
By Michael Dell’Arciprete

As customer acquisition costs continue to rise, many marketers have turned to optimizing performance from existing customers as a way to improve sales while limiting costs, specifically through cross-selling and upselling. Following is a list of proven best practices to help online marketers boost sales through cross-selling and upselling on their websites:

1 Show relevant items. Make sure your cross-sell or upsell is an item that is a logical progression from the original purchase. For example, a leather camera case is a natural cross-sell opportunity for a customer who has just bought a digital camera.

2 Speak to the customer. Make recommendations to highlight other items customers might be interested in based on their original purchases. Amazon.com does a terrific job of this by displaying other products bought by customers who bought the original item.

3 Solve problems. Cross-sell or upsell a product to make customers’ lives easier. Batteries are appropriate for electronic items while grinders are appropriate for coffee beans. This way, customers receive greater savings and value because they only pay one shipping and handling charge. Alert them to this fact.

4 Let customers sell to customers. Use product reviews. Customers want to know what other customers are buying and recommend. At Boca Java.com, reviews by customers have helped new flavors of coffee gain credibility quickly, just days after being introduced.

5 Upsell in every channel. Upselling can be done over the phone, on your website, in inserts in product shipments, in e-mails and in any other marketing vehicle.

6 Upsell in the shopping cart. Show a thumbnail of what they’re buying, and move up the value chain using a good, better and best model. For example, upsell three possible products, priced at $7, $15 and $30, respectively.

7 Make it easy to return to the original product or catalog page. Don’t let a customer looking at an upsell opportunity get lost on your site or distracted in any way so that they fail to make the original purchase.

8 Show impulse items for cross-selling opportunities. Examples of successful impulse items and services include gift wrapping, warranties and batteries.

9 Offer discounts on one item when you buy another. This upsell technique is used effectively by Amazon.com. Amazon has effectively “trained” its customers to reach the $25 threshold needed for free shipping.

10 Position your cross-sells next to the “submit” button. In my experience, this is the best place on a web page to cross-sell. People still read left to right, so this should generally be on the right-hand side of the page.

In addition to adhering to these best practices, it is equally imperative to avoid these common pitfalls:

No Brand Wars! Don’t suggest competing brands that offer essentially the same product (e.g., Sony and RCA) in the “view cart” page–this only results in confusion and can ruin site conversion by making customers second-guess their initial choice.

Don’t let seasonal items linger past their time of relevancy. Unless merchandise is being presented as a “save for next year, by buying now” promotion, letting items linger past their relevancy wastes customer’s time, distracts them and damages goodwill.

Don’t present out-of-stock items for up- or cross-sell unless backorders are available to customers seamlessly. Back-ordered items can cause delays in the shipment of the primary item being purchased. Such delays will result in customer dissatisfaction.

Don’t talk over the customer. Don’t show unusual merchandise without the benefit of extremely easy-to-read product descriptions. This will create an uncertain customer and jeopardize the initial sale.

Don’t present too many cross-sell options. A crowded site loses its effectiveness in presenting truly outstanding offers.

Meet Michael Dell’Arciprete in person and learn more about his acclaimed and innovative upselling, cross-selling and merchandizing techniques at the Electronic Retailing Association’s eRetailer Summit, March 1-3 at the InterContinental Hotel in Miami, Fla. To learn more about Dell’Arciprete’s presentation and the many other educational offerings, please visit www.retailing.org/summit.

Overall, a merchant should develop a cross-selling strategy that focuses not only on proper marketing techniques, but also a commitment to add value for the customer. Most important, cross-selling and upselling is not about finding a way to dump slow-moving merchandise. If the customer leaves feeling that they uncovered a better value than originally expected, then the program was truly successful.

Michael Dell’Arciprete is vice president of marketing at Boca Java, the leading online retailer of gourmet coffees, teas and accessories. He can be reached at mdell@bocajava.com.