In a traditional retail environment, sales associates know exactly how to increase order value and basket size. By quickly surveying a consumer’s in-store behaviour, they can offer complementary items and accessories to drive up the value of any individual sale.
But today, as consumers continuously adopt online shopping, upselling requires a new set of tactics and it's increasingly critical for retail marketers to optimise digital revenue opportunities to deliver on the promise of long-term, profitable growth through e-commerce.
Richard Zhang, senior solutions strategist at Sailthru, outlines the steps from basic through intermediate to advanced upselling techniques that can transform digital retail performance.
Optimise your basket for quick wins
The most basic level of upselling can be achieved with limited customer-specific insight. Providing simple messages at “add to basket” or “review basket” stages about other relevant products – ‘customers who bought this, also bought that’ or ‘top products’ – can be very effective.
This approach is even more successful if the upsell messaging is based on every item in the basket. By increasing the relevancy of the offers, retailers will increase the likelihood of an individual adding to their purchase.
For recommended items in the basket, retailers must use clear messaging, images, pricing, and product titles to ensure the buyer understands what each product is and how it relates to what they are already planning to purchase. Take it a step further by using “add to basket” calls to action that enable the customer to immediately add items without being redirected to product pages.
Up your upselling game with personalisation
While this basic approach will increase revenue, it lacks the personalisation increasingly expected by consumers and proven to deliver long-term results. Retailers that understand an individual’s product interests, purchase history, average order value, and purchase frequency can become far more sophisticated in their approach.
Rather than leveraging “customers who bought this, also bought that” basket messaging alone, retailers should test forms of 1:1 personalised recommendations at every step of the funnel. By adding recommendations on all product pages that take into consideration the individual buyer’s complete data history or showcasing top products to anonymous browsers, a retailer can increase the chances of purchase conversion. By then adding recommendations within the basket that combine the basic approach outlined above with recommendations tailored to the specific buyer, both upsells and cross-sells can be further increased.
To ensure the right approach is taken at every step in the path to purchase, it is critical that every retailer test these forms of personalisation to determine which approach works best for its specific customer base.
Advance your approach with contextual messaging
This “intermediate” approach can be further optimised through the use of predictive analytics. By understanding the predicted action of the individual customers – how much they are predicted to spend, the number of items they are predicted to purchase, and even the specific items they are predicted to purchase next – a retailer can promote upsells and even spark future purchases.
With predictive analytics based on every customer interaction, from web and mobile sites, to apps, email messages and in-store activity, retailers can deliver truly contextual messages and offers that transform upselling. With the ability to confidently predict customer behaviour, a retailer can accurately and automatically assess the type and level of discount that would be required to trigger a purchase. For example, a retailer can tempt a customer towards a free shipping or percentage-off discount threshold by offering products that consumer is specifically predicted to purchase in addition to other products within that individual’s predicted price band to increase the value of the sale.
Where top retailers start
Retailers looking to make the jump from basic through intermediate to advanced upselling must truly understand their customers. The fastest growing retailers in the world leverage enabling technologies to build omnichannel customer profiles that includes email, web, mobile and in-store data. These profiles are used to automate personalised product recommendations, develop predictions on a daily basis and to deliver contextual experiences at an individual, 1:1 level.
These retailers are the ones which understand that effective upselling can increase short-term conversion and long-term metrics, such as customer lifetime value. By connecting their upsell strategy to their greater plan for customer retention, these smart retailers are able to ensure that their strategies reflect the need for omnichannel experience design. For example, in addition to maximising the upsell during the initial purchase, the purchase confirmation – via email or mobile app – is leveraged as an opportunity to drive the purchase stream via personalised recommendations and promotional offers. This thinking can, and should be, extended to mobile apps – where a retailer can implement beginning, intermediate and advanced approaches to upselling – in addition to even carrying these recommendations to their in-store experience.
By embedding upselling techniques within the overall focus on customer retention and improving the customer experience, retailers can begin to deliver on the promise of long-term, profitable growth through e-commerce.