A UX Guide to Upselling and Cross-selling
Lessons on pricing to make more strategic sales
Upselling and cross-selling are methods of increasing revenue by introducing better or comparable products to a customer as they make their purchase.
In 2006, Amazon reported that 35% of their revenue came from their cross sells and upselling efforts, which makes such strategies crucial for any company to increase visibility of value adding products to customers.
Though the term in and off itself has a bad rep simply due to its name, I believe upselling and cross-selling can evolve from an underhanded attempt to trick money out of a customer and instead, be defined as a dynamic strategy to promote visibility of valuable and relevant products.
Upselling
Upselling is a sales technique whereby a seller induces the customer to purchase more expensive items, upgrades or other add-ons in an attempt to make a more profitable sale.
Cross-selling
Cross-selling is a sales technique to get the customer to spend more money by adding more products from other categories than the product being viewed or purchased.
Although the two terms may be used interchangeably, it becomes simple when we break down the term. The “up” in upsell can remind us of “upgrade” — or a pricier version of the same product.
For example, if you were browsing for a music player and the salesperson recommends a high end sound system rather than the basic system. A cross-sell can remind us of “across” which is related and equal — this can signify a related product that complements the present purchase. For example, car insurance or a rearview mirror system after a car purchase.
Upselling/cross-selling in everyday life
Imagine this, you are pulling up to a drive through and finish your order. The cashier promptly adds on a “Would you like fries with that?” before you make a payment. Or you are browsing for a few hours on Amazon for a wedding gift and you start seeing related items at the bottom of every page you browse to.
While this also serves as a navigation device to help you put even more hours into finding the perfect gift, Amazon and many others companies know that to make a sale — you must convince the customer what you are selling if valuable. And they will only find out about the item if it is first surfaced in a meaningful way.
Nowadays, many companies are built on a freemium model — the service is essentially free but offer more advanced features behind a paywall. Obviously, a stable revenue is necessary to sustain a business, but the initial free experience draws in a wider audience. The tricky part is moving your free users to paid users, which is where upselling/cross-selling comes in.
If you flip your perspective and think like a company — what are ads trying to do?They are trying to get the user to do some kind of action which results in conversion.
There’s several factors that occur when thinking about ads as a product. People approach online experiences with an intent to do something, whether it’s search for a service (ex. car repair), find a product (ex. a gift for their cousin), browse (ex. the news) or download an app, etc.
Digital ads are a common technique to upsell and cross-sell past buyers. However, the misalignment between intent and what ads people encounter results in a negative reaction.
When ads are too intrusive
When and where ads are displayed makes a difference. No one signs up to be advertised to when they land on a website but there may still be a need to surface new upgrades/products to existing customers. Companies are using more data to find the right moments to show ads, because this results in a win-win situation, to meet the demand from potential customers instead of casting a wide net to a large disengaged audience.
What types of ads are being shown to me? Again, taking a data-driven approach can increase the likelihood that the content you’re being shown is both interesting and relevant — a seamless part of the overall experience in the flow of what you’re doing.
The traditional approach of using demographic data is being replaced by online behaviors and actions which are a better and more localized way to serving up personalized content.
When ads are obnoxious
No one likes flashy, obtrusive banner ads. Or the dreaded popup — it gets in your face and demands you to do something about it. These very ads also (obnoxiously) make their close button hidden or hard to click.
When there are too many ads
There’s a term called Saturation — meaning the more people are exposed to something, (ex. like an offer for a discount), the less they are affected by it. One of the issues with scripted ads is that they feel inauthentic. After awhile, they will lose relevance and meaning as people come to expect that this is just another company trying to make a short pitch for their attention (where the pitch always has a “gotcha”, or taking advantage of unsuspecting customers).
Some people even drop out of products completely because they feel inundated with ads. This is a breach of trust and feeling of being a means to an end — something that breaks the relationship between user and company.
When ads feel creepy
There isn’t much that can be done about this part, as more companies use a data driven approach to do ad-targeting. But this can result in a feeling that ads are following you across platforms and devices.
Timing + relevance = success
From the perspective of a customer’s lifecycle, the best time to upsell would not be right after a purchase it made. It would be right before the purchase decision and during the process of choice reduction. Cross-selling would occur right after a purchase or during choice reduction as well. I see these sales techniques as aids to help customers make the right decision that will result in the highest value add back into their lives.
Examples
Dropbox
* incentivize users toward actions like getting started,
* referring a friend for more space
* clearly showing free trial options over immediate purchase options
Spotify
* free/premium compared side by side to show features
* show some features in the free version, lock other features till upgrade
* eye catching premium account button
Conclusion
The most effective methods of upselling and cross-selling have always leaned less towards in-your-face neon shining banner ads and more toward subtle prompts that leaves you with the freedom to choose between products that pair well or leave you a little closer to what you really want. And while the term itself has a tendency of sounding too mercenary and calculating, we can adjust our perspective and UX to make it not so.
And that’s more of what you want as a customer: relevant, useful products and services when it makes sense for you — not being bombarded by a constant stream of sales pitches.
