The Art of The Cross-Sell
Everybody loves a discount; I love a discount, and you love a discount no matter what the percentage. The trick here for any ‘seller’ is how to discount an item just enough so that it still has a decent profit margin while offering value to a customer. Some of you may be shaking your head, thinking IMPOSSIBLE! Well, in this blog, I’m going to tell you how you can do just that through two great strategies called the cross-sell and the bundle deal.
You would have seen this on many websites with more and more eCommerce companies adopting this strategy. In essence, a cross-sell is when a customer is given the option to add a complimentary product to the one they are already purchasing. Usually at a discounted rate. See the image below for an example of this:
In this example, Mighty Ape have noticed the high volume of customers purchasing these two items together (keyboard and mouse), thus prompting them to bundle them together, which offers savings of approx. $5. While this isn’t HUGE savings, it tends to be still enough to convert customers into buying the bundle due to the complimentary component of the mouse to the keyboard and the convenience of not having to search the internet for a mouse that matches the keyboard.
The great thing about a cross-sell is that you’re already sending one product meaning shipping and processing are paid for, so why not add in lower value item that only enhances the customer’s experience at a low cost to the business.
Another effective strategy is a bundle deal which can offer a group of select products for a discounted rate making it extremely appealing to the customer. This is always a great way to increase the cart size of an order which keeps profit margins high, and shipping costs the same (give or take). A general rule of thumb in bundling is to make the discount off approximately the price of one of the items included, so really the customer is buying four items for the price of three. (as seen below)
Deciding the value proposition
Whether you sell 5 or 100 SKU’s, there is always going to be a value proposition you can add with a cross-sell, the key here is to research and use your eCommerce analytics to make a choice. Shopify’s analytics tab is great for this as it provides an easy to read dashboard showing all customer habits and tendencies when navigating your website.
There are a couple of factors you can focus on when choosing the value proposition:
Does it compliment the purchased product?
What is the margin you are giving up if discounted?
Will it enhance the customer’s buying experience while increasing cart size?
If you answered correctly to these points, then you’ve found yourself a winning formula! Making sure that the 2nd item compliments the first is crucial for the cross-sell. You wouldn't offer a USB charger if the customer is purchasing a set of 6 wine glasses. Instead, look for a combination of products that complement each other and adds value to the customer's experience. An example of a complementary cross-sell could be when selling leather shoes. A complimentary product would be a leather maintenance conditioner which intern increases the life and longevity of the shoes. Lastly of all, making sure that the second product doesn’t totally negate your profit margin so that you’re still profitable. That is why cross-sells are often done with smaller and less expensive items so as not to mess up the profits you’ll make with the more expensive item. Smaller pieces also fit great when already packed up with larger items, so that shipping costs aren’t affected by the cross-sell.
Now when bundling these complementary products, you’ll want to follow the formula above while curating a collection that the customer can’t pass up. Using the leather shoe example, you could bundle leather conditioner, with a cleaning brush and spare laces. This would add even further value for the customer at a discounted rate where the customer is saving the price of one of the items listed above.
Letting the people know!
So, you’ve got yourself a winning cross-sell or bundle combination, NICE! (virtual high-five). Next step is how are you going to let customers on your website know about this awesome deal. I’ve found in the Shopify app store there are a few particular apps which are perfect for this, such as Discounted Upsells & Cross Sell and Upsell Bundles both from Booster Apps. These both have a user-friendly interface that allows seamless installation and integration with almost all Shopify themes. You can ever brand the display in line with your business using colour selection.
These app’s allow you to set triggers based on rules such as ‘show when product x is added to cart’ or ‘bundle with product x,y,z when product w is added to cart’. These allow you to have complete control over your selling methods to create a unique customer experience that can benefit both your eCommerce store and the customer’s overall experience and satisfaction.
Wrap Up
From this, you should know the differences between a cross-sell and bundle deal and which one you would use for your business (if not both!). You’ll also know how to carefully select the right product to use to complement the customer’s purchase. There are great app’s out there that will make this strategy easy to implement!
Decide on which selling strategy best suits your business (either cross-sell or bundle)
Create the unique selling point which keep’s your profit margin and customers value high
Use one of Shopify’s great apps to help you integrate this to your eCommerce store
If you’re still not sure about the best way to go about this, reach out to us, and we’d be happy to help sort your eCommerce strategy. CONTACT HERE