Cross-Sell, upsell, really - what’s the diff? Generally…

• An upsell is to get the customer to spend more money - buy a more expensive model of the same type of product, or add features / warranties that relate to the product in question.

• A cross-sell is to get the customer to spend more money buy adding more products from other categories than the product being viewed or purchased.

The terms cross-sell and upsell are often used interchangeably because, let’s face it, this gets confusing. Say the customer is viewing a 4GB iPod Nano for $169.

8 GB iPod Nano, $229 -> Upsell, same product family, more expensive
8 GB iPod Touch, $299 -> Upsell, same product family, more expensive
16 GP iPod Touch, $399 -> Upsell, same product family, more expensive
Apple In-Ear Headphones with Remote and Mic , $79 -> Cross-sell
Skull Candy headphones, $69, -> Cross-sell
$25 iTunes card -> Cross-sell
8 GB Microsoft Zune, $249 -> Upsell, more expensive, same category
4 GB Creative Zen mp3 player, $159 -> Neither cross-sell or upsell, rather an “alternative product suggestion”
Portable DVD player, $299 -> Cross-sell. Cool gadget, customer “may also like” but not related to mp3 player.
Griffin FM transmitter for car, $79 -> Cross-sell

Really, there should be a third category - “alternative products” which are really a navigation aid rather than something that truly boosts the cart value or items per sale. Consider the following example from Harry and David:

The label “Go Deluxe” suggests an upsell. One suggestion is to double up on the chocolate truffles and get 2 for $44.85, a true upsell. The other takes a product from another category (that is of higher $ value) which would be considered a cross-sell if suggested in addition to, rather than instead of the product being viewed. In this case, the popcorn is an alternative product suggestion rather than a true upsell of the truffles.

Clear as mud?

You May Also Like?

There’s no stock way to present product recommendations. Common labels for recommendations are:

“Recommended products”
“You may also like”
“Customers who bought X also bought”
“Customers who viewed X also viewed”
“Frequently bought together”
“Stuff you need” (Radio Shack, for accessories)
“Stuff you may want” (Radio Shack, for items in other categories)
“More from this (category, brand, author, artist)”
“Looks hot with”
“Complete the look”

For usability, the best labels clearly communicate why products are being recommended (”this is a more fully featured item than the one you’re looking at,” “people like you liked this,” “these are top sellers in this category,” “these items will look good with what you’re looking at…”) rather than “Recommended” or “You might also like.”

Often retailers mix of upsells, cross-sells and alternatives in their merchandising zones. CompUSA separates upsell from cross-sell with “Want to Upgrade?” suggestions and “More Recommendations”:

Aside from label clarity, another benefit of separating your suggestions into separate merchandising zones is more accurate tracking of what types of suggestions are more effective. Are you more successful persuading customers to add to their order or upgrade to a more expensive model?

So while we don’t need to get too hung up on what cross-sell is vs upsell (there’s room for a bit of crossover in definition), and we should add the third category of “alternative products,” understanding the general differences can help us make better decisions in selecting product associations, labeling merchandising zones and measuring the conversion of different suggestions.

Get Elastic reader and ecommerce blogger Scott Wilson (aka That Software Guy, The Cart Blog and @thatsoftwareguy) informed me today of a new merchandising tactic on Amazon. It appears Amazon has replaced its “Better Together” cross-sells with bundling. Of course, this could be a split test, but Scott and I both can see this technique in action when we visit Amazon.

Before - Better Together

Screenshot credit: Register Hardware

After - Frequently Bought Together

The customer now has the option to add all 3 to the cart, or pick of the 3. Giving the customer some choice but not too much choice is key here. I imagine the uptake would be far lower if the customer was presented 5 or more choices, simply because it requires too much thinking and could cause a “paradox of choice.”

Word choice: Frequently Bought Together vs. Better Together

Though Better Together sounds more smooth, it could be that there is a higher degree of social trust with “Frequently Bought Together” — it’s more clear on why the cross-sell is presented (rather than head scratchers like marmite and .Mac software. Of course, this could be a short-term test.

I also spotted some product pages pitching “Best Value” cross-sells rather than “Better Together” which may be more appropriate in this economy:

Personally I think this is a great idea, and it’s another reason I’d love to be a fly on the wall in the Amazon web analytics war room.

This is a guest post by Ayat Shukairy of Invesp Consulting.

Cross-sells and up-sells are popular because they can increase average order size for a single customer. But can they be distracting and hurt conversion? Many online retailers avoid placing cross-sells or up-sells at sensitive buying stages such as the start of the checkout process. …

But let’s go back a bit: Tracking your visitors’ every move on your ecommerce site to understand what they liked, disliked, browsed to, selected, etc. (behavior tracking, personalization) can be considered to be either:

1. Really cool because visitors may feel they have their own personal shopper that will continue to recommend other items they may enjoy
2. Intrusive because every movement the visitor makes on the site is tracked and recorded
3. Annoying because the selling just won’t stop

Retail Examples of Cross-Sells and Up-Sells

Cross-sells and up-sells are used on the majority of ecommerce websites, and are rather successful. In the most primitive cases, an ecommerce store will manually set up cross-sells and up-sells via product catalog administration. In the more complex scenarios, ecommerce companies rely on recommendation software that monitors a customer’s activity on the site from what they are browsing, to what items they select to place inside their cart. Based on that activity the recommendation software suggests cross-sells and up-sells to the site visitor.

Below is a cross-sell on a product page of Lancome.com:

In this case, I was looking at the product page for eyeliner product. Lancome successfully recommended complimentary items.

When I added the eyeliner to my cart, again Lancome successfully displayed cross-sells recommendations under a title “Complete this Product with.”

Amazon.com bases cross-sells and up-sells on information they gather from the activity of other customers who purchased or viewed the same items being viewed or selected:

On the product page of a denim skirt I wanted to purchase, Amazon.com displayed the following recommendations:

After I placed the items in the cart: two types of recommendation displays appear:

1. Recommendations for items across our store…
2. Customers who bought items in your shopping cart also bought…

So when I place a denim skirt in my cart, I am presented with:

• 2 other non-denim skirts
• A whitepaper (which is really random)

Sometimes the recommendations are repeated, but the above screen shots display the standard Amazon response to cross-sells and up-sells.

Where is it most effective place to display cross-sells and up-sells?

Clearly, with every ecommerce company, there are variations to when and where to suggest recommendations for the user.

Common practices of placing cross-sells and up-sells:

• Product page
• Shopping cart view
• Initial stages of the checkout process
• After an order is placed

Many ecommerce companies in general feel that displaying product recommendations during the checkout process can increase cart abandonment rates and lower conversion significantly.

A deeper look at Shopping Cart Cross-Sells:

Studies show that visitors who enter their shopping cart and decide to continue shopping may not return 75% of the time. Offering customers cross-sells could potentially encourage customers to navigate away from the shopping cart to view the items, possibly to never return.

However, a study conducted by MyBuys.com based on the experience of 1,345 ecommerce shoppers indicates that the majority of consumers expect online merchants to make additional recommendations. Additionally, 77% of consumers have made additional purchases when encountered with personalized recommendations.

Let’s examine two e-tailers different approaches to shopping cart cross-sells:

When I was ready to complete my order at Victoria’s Secret, I was directed to my shopping bag, the first step in the checkout process. Victoria’s Secret offers an exclusive sale item pop-up right within my shopping cart. The Cotton Rib Henley Sale item was an attempt at a cross-sell:

I click on the “Buy Now” button on the pop-up, and I am re-directed to the Cotton Rib Henley Shirt Page:

I was navigated away from the shopping cart, and I simply can’t add the Cotton Rib Henley Sweater! I have to scroll down through the other cross-sells in order to add to cart and get back to the shopping cart (and be bombarded once more with additional pop-up cross-sells).

Lancome.com does it a bit differently. My shopping bag opens up alongside the product page and indicates that I can “Complete this Product with” a variety of different items. If my cursor scrolls on top of the recommended cross-sell products, a pink icon “Quick Shop” appears.

After clicking on the icon, I haven’t navigated away from the cart nor the product page, but another pop-up with the newly selected product appears.

Each approach is completely different; Victoria’s Secret directed me to their product page ultimately navigating me away from the checkout process. Lancome’s approach, although untraditional, kept me on the first page of the checkout process in the background and I actually completed the order.

What product selection should you recommend within the shopping cart?

a. Complimentary items: Ecommerce companies and recommendation specialists find that listing complimentary items is the most effective way to avoid raising cart abandonment rates and raise average order size. I was interested to see what type of cross-sell recommendations I would receive at an electronics ecommerce site such as BestBuy.com. Not surprisingly, a cross-sell to purchase their service plan pops up:

Best Buy could benefit from including an add to cart option immediately within this pop-up rather than forcing the user to click on the service plan details, get to another pop up page and add the item. I realize Best Buy’s struggle — there are details related to the service plan that must be addressed by the buyer before the actual purchase. When I clicked on the service plan cross-sell, I am presented with another pop-up that describes the service plan and asks me to select my state before I can add it to my cart:

They do not force the user to navigate away from the cart, which is a plus.

After seeing what ecommerce electronic stores do, I moved onto a very different category: pets. Petsmart.com offers complimentary items on the right side of the shopping cart.

By giving consumers complimentary recommendations you are helping them avoid going back out to the online store and locate these items. However, I am forced to navigate away from my cart being directed to the product page to view the selected item.

b. Mismatching items: Offering items that are unrelated to the shopping cart contents can be more challenging. After arriving on the Stacksandstacks website, I added “mini basting brushes” to my cart:

Stacks and Stacks offers unrelated cross-sells within my cart, such as a closet shoe rack, wall tie organizer, etc. The issue from the perspective of the buyer is that when a buyer visits a site with something in particular in mind (a list of what he/she wants to buy), cross-selling with unrelated items may not be an effective approach. MyBuys.com research found only 2% of visitors felt that product recommendations related to them.

If you decide to offer unrelated cross sells within the cart keep a few things in mind:

• Offering sale items is more lucrative and encouraging for the buyer to consider
• Offer items with “Free Shipping” option can also be an incentive to purchase
• In our tests, we noticed that instead of labeling the recommendations as “You May Also Like”, you can do a lot better by using the phrase “Customers who purchased your item also enjoyed.” The second phrase draws more attention the site visitor because you are combining common interests which appeals to the humanistic visitor. Of course there are no set rules, so test both labels and see what works better for your site.

I visited Headsets.com where I added the Plantronics noise-canceling wireless headset to my cart:

Headsets.com recommends a list of items that are mix between mismatches and items that are complementary. They also have the recommendations labeled as: “Customers Who Bought the Above Item Also Bought” which again is a helpful way of creating feelings of commonality and association.

c. Recently Viewed: Amazon sums it up best by offering on the right side of my shopping cart a clear display of all the items I browsed through during my shopping experience. Any reluctance that I may have had in selecting one of the recently viewed items might be rehashed, encouraging me to go back and explore the item once more. Amazon.com has always pushed the fold in ecommerce implementations and design:

Notice that the items are just listed without the images except the “featured item” at the bottom of the list.

d. Matching Items or hybrid: If I’ve recently viewed golf gloves and made a selection, offering me more golf gloves may not be effective since I just placed a pair in my cart.

Golfsmith.com offers a hybrid of choices. I had selected a pair of gloves, and the cross-sells included a different pair of gloves. There are also complementary items that may appeal to a golfer in general: golf balls and a pack of tees. Usually, adding an item such as golf-gloves is because of a need that I have for them, so offering me more gloves may not be useful.

One of the biggest fears of displaying items in the shopping cart is losing the customer to a growing statistic of cart abandonment. However, if you are able to increase average order size by understand what appeals to your site visitor through optimization and testing, cross-selling is a great way to accomplish that.

Your Turn

Now it’s your turn to share: How do you make recommendations for products on your website? Is it done via software or is it a manual process? Have you had a negative or positive experience by listing cross sell items in the shopping cart?

About the Guest Blogger: Ayat Shukairy is a Managing Partner at Invesp Consulting, an ecommerce conversion optimization company. She also blogs regularly about landing page optimization, ecommerce, conversion optimization, and web usability for the Invesp Blog.

As customer reviews become more and more common on ecommerce sites, we can expect innovations to emerge in design, usability and quality.

It’s always a good idea to keep an eye on Amazon for usability innovations. Today we’ll look at an example of how Amazon helps customers filter product reviews when there are literally hundreds of them. Not only does Amazon help customers hone in on specific types of reviews, it also takes the opportunity to show relevant merchandising based on the customer reviews themselves. In this post I’ll also suggest something that Amazon isn’t doing yet that could help you save sales when review content actually discourages a customer to purchase the item in question.

I’m going to use the example of a book that’s going to be a top-seller on Amazon simply because it’s endorsed by perhaps the most influential television personality in the world - Oprah Winfrey. Most people will not feel the need to read reviews because they trust her opinion so much. Others will be so excited about the book they will read the reviews just to tide them over until the book arrives at their door.

Continue Reading:
Saving Sales From Negative Customer Reviews »

We just wrapped up our webinar on merchandising (cross-selling and up-selling) with Mike Svatek of Baynote.

This was an incredible session and I’m sure you’ll get a lot out of catching the Webinar replay which will be posted within the next few days. The replay will walk you through all of the screenshots used in the presentation - I’ll only be using select screenshots for this recap.

Mike chose the king of cross-selling Amazon to illustrate the concepts in the webinar, sharing an impressive statistic:

35% of Amazon Sales come from cross-sells & recommendations
Venturebeat (Dec 06)

How does Amazon do this?

Merchandising Based on Intent

First-Time Visitors - Pre-Intent

If Amazon has no information on you (your first visit, you are not logged in or your cache and cookies are cleared) you’ll see default merchandising (pre-intent) within a number of merchandising zones, what Mike refers to as a shotgun approach:

Continue Reading:
Webinar Recap: Effective Merchandising: What Sells? »