Cross-selling works -- so it is not a surprise that 80 percent of merchandisers offer some version, according to a 2004 Merchandising Survey conducted by the e-tailing group. But too often merchants are offering too much.
Two major issues affect the outcome of cross- and up-selling, Lauren Freedman, president of the group, told us. "There's the issue of relevance, and that of location," she said. Through her work with dozens of merchants including Crate & Barrel, Scholastic, and Hotels.com, Lauren has come to some conclusions about what works -- and what doesn't -- in cross-selling relevancy and placement. She suggested the following tip
1. Merchants understand what fits and what doesn't better than other consumers. So if you plan to pre-populate a cross-sell with suggestions from other customers, test it against your own suggestions, as well. "Those suggestions are the ones that seem to convert the best," she said.
2. Product pages are better suited to cross-selling rather than up-selling. Save up-selling for the checkout page and beyond.
3. Price point matters. "If you've got a customer in a kitchen area, you might test a gadget as well as an appliance. See which works best."
4. If you don't have a lot of relevant cross-sells, suggest best-sellers and hot products. A children's bookstore that collects information about a customer who generally buys books for toddlers might suggest a picture book as a cross-sell, for example -- but if the store doesn't gather customer info, a safe up-sell might be the new Harry Potter title.
5. Try up-selling at the shopping cart level and the post-order level, particularly on order confirmation and shipping confirmation emails. "The beauty of the post-order email is that everyone opens them," she explained. To a shopper who has purchased a pair of pants and a sweater, for example, you might say something like, "Want to get the whole outfit? Check out these shoes and handbags..."
6. Consider HTML formats for confirmation emails. Lauren acknowledges that many merchandisers use email confirmation systems that allow only for text messages but, she said, this makes up-selling on those emails difficult.
7. Testing is critical. "Remember, what's right for one category or brand is not necessarily right for the other," Lauren said.
While Lauren puts a great deal of faith in a merchant's gut instinct, "the beauty of the web is that you can test and change, and it's efficient to do so."
She adds, "The more you test and learn, the more you can see different permutations of a possibility, and the opportunities available. You might think something won't work and it turns out to be the best thing."