Sales are awesome!
It’ll be hard for any business – online or otherwise – to disagree with this fact. However, while any sale is a small victory in a market rife with options, it may not always be profitable. For some businesses, it takes more than the “baseline purchase” to turn a profit. That’s where upselling and cross-selling comes into the picture. These are avenues to revenue that cannot be ignored.
So what is upselling and cross-selling?
Both are ways of convincing consumers to increase their order value while they are in the process of making a purchase. Usually, these options are beneficial not just to the retailer, who makes more money, but also for the customer. Here’s why:
Upselling means offering the customer an option that comes with more benefits than the original order – at a slightly (and usually discounted) increased rate.
Cross-selling means that once the consumer has selected an item, they will be presented with other items that are usually related to the initial item. For retailers and e-commerce businesses, this doesn’t just mean consumers feel understood (by, let’s be real, an algorithm) but usually also comes with the added benefit of not having to pay shipping for something they might have wanted down the road anyway.
Let’s look at some examples, shall we?
If you’ve ever tried to build a website, you’ve probably seen something like this:
This example is taken from WordPress. It clearly lists the different options and prices for different types of website, complete with a nearly laid-out overview of the benefits of each. But the upselling at WordPress doesn’t end there.
In fact, when you are initially presented with WordPress plans, this is what you’ll see:
The prices here are significantly lower because they’re designed to generate more revenue immediately: an annual plan instead of a monthly one. The benefit here is clear: the price per month is significantly lower if you pay for a full year instead of reserving the right to cancel each month.
When you move the slider to “Pay monthly,” this message pops up, alerting the financially responsible customer to the monetary benefit of an annual plan.
This, ladies and gentlemen, is a shining example of an upsell funnel.
Another example is Apple (I won’t explain what this company does 😉). As shown in the images below, Apple tries to upsell multiple times as the customer adds an iPhone 12 Pro to their bag. First it’s a matter of size (Pro or Pro Max), then it’s storage space (with a further possibility to choose immediate payment or monthly installments), and so on…
But Apple, being Apple, doesn’t stop at upselling. Once all options for upselling have been exhausted, the customer is left with no other option than adding the iPhone 12 Pro to their bag. (This may not seem significant, but it cancels out the option of going straight to payment.) What follows next are multiple related products: phone cases, wireless chargers, AirPods, etc.
Apple has expertly built an on-page funnel that presents a cross-sale as the only logical step for the iPhone 12 Pro buyer.
Of course, these examples are taken from billion-dollar tech giants, but it just goes to show how truly valuable upselling and cross-selling truly is. And more importantly, it serves as inspiration even for smaller businesses.
Build it into your sales funnel!
The concepts of upsells and cross-sells are not difficult to understand. What’s more difficult is applying them in real life.
Sure, it requires a bit more thinking and strategizing, and a bit more processing power, to implement multiple options for each sale – but it’s all in the spirit of increasing average order value.
Upsells and cross-sells traditionally occur while the purchase is in action (when something has been or is being added to the cart). The buyer is already in shopping mode and moving towards a payment, so their minds are already on spending money and adding a small extra amount might not make too big of a difference.
However, sales funnels are usually also designed to drive sales after the first purchase. For example, remember those messages you receive from phone service provider offering you a better plan for a sliiightly higher monthly fee? Or all those emails you receive from retailers recommending products based on your last order? These are examples of highly effective after-the-fact upselling and cross-selling funnels.
Okay… but how does this affect affiliate marketing?
It’s a good question with a fairly simple answer. There is no doubt that affiliate marketing is on a rollercoaster going up (if you’re skeptical, check out this blog *LINK TO ‘HOW MUCH MONEY DO AFFILIATE MARKETERS MAKE’*).
Affiliate marketing is an excellent way of getting products to consumers – but it also requires a paid commission. For consumer goods (whether physical or online), this commission is usually paid on a per-sale basis, so the goal for affiliate marketers becomes to generate as many sales as cost-efficiently as possible.
But as mentioned, the initial product might not always be profitable to a retailer who not only needs to pay for stocking and shipping the item but also affiliate commission on top.
A popular way of increasing order value is to incentivize upselling. Some advertisers build this into their affiliate sales funnel, offering additional commission for upselling and cross-selling. This effectively means that affiliates are rewarded not just for bringing new customers but also for increasing the value of existing ones.
So once again – sales are awesome, especially when they increase benefits for all parties involved!