Take Advantage of Cross-Selling and Upselling Opportunities
responsible for generating extra revenue through these methods of selling. However, as technology has evolved, the burden is now being handled by advanced recommendation systems that are in tune with the needs of individual users.
WHAT ARE CROSS-SELLING AND UPSELLING?
In the world of business, there are two popular methods for selling additional products to your consumers: cross-selling and upselling. It is often assumed that they are the same thing, but they are very different and while recommendation systems are capable of offering suggestions that appeal to both styles, it is important to understand the differences between the two.
Cross-selling refers to product recommendations that are sold in an effort to accessorize with the main purchase. For example, if you buy a new laptop, a cross-selling recommendation would suggest that you buy speakers, a printer, or a mouse for your new computer. On the other hand, upselling would suggest that you upgrade to a faster processor, add additional ram, or a larger display. One deals with similar products, and the other deals with increasing the value of the product they are buying. Both of these selling methods have their own advantages.
HOW TO TAKE ADVANTAGE OF THE TWO SELLING METHODS VIA RECOMMENDATION SYSTEMS
Consumers like being recommended products; while most consumers shop with an idea in mind, they are receptive to being suggested items they wouldn’t have considered or things that will improve their targeted purchase. Recommendation systems provide companies with a rare opportunity to provide product suggestions through cross-selling and upselling, without being pushy and agitating their customers.
Traditional salespeople can sometimes be seen as too pushy and can make a customer feel as if they are being coerced and forced to interact with someone they don’t want to. Recommendation systems provide the same service, but in a much passive way that lets the user still feel in control. Using the laptop example, consumers rarely have an issue with a drop down box that shows the various upgrades for the laptop they are looking to buy. People don’t like feeling cornered, but they like having options.
Data gathered by Predictive Intent suggests that upselling performs 20 times better than cross-selling on product pages. Why does this happen? Typical consumers are interested in upgrading their purchase, as it directly influences its performance, but they are less receptive to cross-selling because the items recommended are not always tied to their purchase and its performance.
HOW RECOMMENDATIONS HANDLE UP-SELLING AND CROSS-SELLING
Recommendation systems were designed to improve a consumer’s interaction with a choice-based platform. They have been popularized by services like Amazon and Netflix and they appear in almost every facet of our daily lives. When browsers shop at their favorite stores online, these stores collect relevant data about their users through advanced recommendation systems. These systems analyze the data and provide meaningful suggestions that improve the overall shopping experience.
In terms of cross-selling and up-selling, recommendation systems study customer preferences and create links between their choices and products that are offered by the store. As the system evolves, it develops sophisticated connections that are geared towards helping companies sell product by recommending them to customers that wouldn’t have known about them without a simple recommendation. Sometimes a consumer requires a nudge in the right direction and this is exactly what recommendation systems are designed to do.
PUTTING RECOMMENDATION SYSTEMS TO WORK FOR YOU
Recommendation systems provide companies with the opportunity to achieve consistent uptime for their cross-selling and up-selling tactics. When a customer is tailoring their purchase – be it a computer or some other device – the recommendation engine will suggest variations for their purchase. These valuable cross-selling and upselling opportunities are nearly costless to the company and can drive additional sales and help you increase your profits.
According to Shopify, product recommendations shouldn’t total more than 25 percent of the original purchases value. Products that cost more than the original purchase can hurt your chances of landing a sale and potentially scare away customers who suffer from purchase anxiety just before checking out. Balancing your cross-selling and up-selling recommendations is a tricky business, but an important one if you want to see them perform for you in a meaningful way.
There are many recommendation systems in existence and it is important that you find one that caters to the needs of your business. Trouvus is proud to offer recommendation systems for a wide variety of ecommerce platforms and we currently offer a free plugin for any business that uses the Magento ecommerce platform. Please feel free to contact us through our website if you have any questions about recommendation systems and how they can help you increase cross-selling and upselling in your online store.