Figure 8-8. Upsell example from 1800Contacts.com
Increasing the average order value is one way that many retailers have been able to increase their online revenue. By understanding customers’ buying intents, retailers can display complementary or similar items as cross-sells or upsells on the page. Cross-sells are items that are complementary to the product selected, whereas upsells are products that are similar to but more expensive than the product selected.
Three factors contribute to the success of cross-sells and upsells: how they are displayed, how easy they are to access, and where they are located on a page or within a buying process. As we discussed in Chapter 7, some companies bundle multiple items into one package (i.e., purchasing eyeliner, eye shadow, and mascara together is far less expensive than purchasing each product on its own) to encourage customers to purchase the cross-sells. Other companies sell multiple units of the same product (bundles) at discounts that increase as the number of units increase (upsell). An excellent example of this is 1800Contacts.com (see Figure 8-8), which sells one contact lens pack for $29.99 and a 12-pack bundle for $335.88 (equal to $27.99 per pack).
As we mentioned before, the main difference between upsells and cross-sells is that cross-sells offer items that complement the product being considered, whereas upsells are the same type of product but at a greater cost.
Whether you should offer cross-sells or upsells or both will depend on what you are selling. Some items lend themselves nicely to cross-sells. For example, clothing stores typically cross-sell; they may show a sweater along with a scarf that complements the sweater, since a shopper looking for a sweater may also be interested in a scarf that goes well with it.
Other items that can be upgraded for an increase in price lend themselves nicely to upsells. Companies that sell gifts and flowers use upsells heavily. For example, Figure 8-9 shows a page from the Harry & David website that highlights a $30 box of chocolate truffles. As an upsell, customers can “Go Deluxe” and purchase the Moose Munch Party Drum, which contains an assortment of goodies, for only $9 more. By upselling in this way, Harry & David increases its average order value.
Anticipating what the user will want to buy is crucial when considering an upsell strategy. That’s why companies display best sellers in different categories, or show what other items are usually purchased with a particular item.
