Successful Shopify merchants are always looking to increase their Average Order Value (AOV) because it’s a great way to boost revenue and profits. However, some ways of increasing AOV might not resonate with your customer base.
For example, let's say you hike the prices up for some of your products. Now, you'll end up making more on each sale, but you may lose customers and your conversion rates might drop. While it may be an obvious choice, higher prices definitely aren’t a surefire way to increase profits and could even result in losses.
So what's a good way to increase your AOV? Cross-selling and upselling are some effective strategies if you execute them properly. A cross-sell or upsell funnel helps increase your AOV by providing customers with valuable recommendations and suggestions.
These strategies work well because you provide customers with real value, while mutually benefiting from an increased AOV. So, how can you use cross-selling to increase profits? Let's find out.
What is cross-selling?
Cross-selling is the strategy of recommending related products to an existing customer in your store. A classic cross-sell example is a vendor asking if you want fries with your burger.
Cross-selling is an effective strategy for driving revenue. In fact, McKinsey & Company identified that cross-selling can increase sales by 20% and profits by 30%. An example of exceptionally successful cross-selling is Amazon's Frequently Bought Together feature. It rakes in revenue for the ecommerce platform through related product recommendations. 35% of Amazon’s revenue comes from its recommendation engine.
Some strategies for increasing cross-sell performance include promotions, discounts, warranties, and 7-day to 30-day free trials on the cross-sell products.
Cross-selling can increase sales by 20% and profits by 30%.
The difference between upselling and cross-selling
Cross-sell and upsells are terms that are often confused. While the concept behind each strategy is different, the goal is common: Encourage customers to spend more. Where cross-selling focuses on related product recommendations, upselling recommends shoppers upgrade their cart items.
So, adding cheese in your burger would be an upsell, and adding fries makes it a cross-sell.
Upselling is great because:
- It increases your customer lifetime value
- It boosts customer satisfaction
- It adds value for your customer
Cross-selling, on the other hand, is beneficial because it:
- Provides customers with more variety
- Encourages sales of low-margin products
- Helps you stand out from the competition
How your Shopify store benefits from cross-selling
Cross-selling is an excellent way to keep your customers engaged and interested in your store. The key benefits of cross-selling include:
- Boosting cart sizes and AOV
- Improving customer loyalty by providing relevant recommendations at the right time
- Selling more stock (particularly when optimized to sell overstock items)
- Reducing fulfillment times and costs
- Creating a strong customer experience by giving customers everything they need to enjoy your product more fully
Types of cross-sells
Cross-selling is almost a value-based strategy, and so it relies heavily on personalization and customization to be effective. What is valuable to one customer, may not be valuable to another.
This is why powerful ecommerce cross-sell apps use algorithms to make personalized recommendations to shoppers. Here are some of the common types of cross-sell strategies.
Product bundling is the most common type of cross-sell strategy. It assesses the purchased product and bundles related items for cross-selling. Amazon's Frequently Bought Together feature is a famous example of product bundling. Sometimes, stores feature discounts and promotions on the cross-sell bundles to drive up sales.
If you're going to offer up bundles, make sure the items are either relevant to the item a customer is looking at, relevant to what the customer is interested in, or ideally - both. You can use AI to create dynamic bundles, or set your own bundles manually based on what you intend to be purchased together.
Some types of product cross-sells are more brand-focused. For example, if a customer buys an iPhone from your store, you could recommend Apple’s AirPods to them. This strategy is particularly relevant for multi-brand stores (like Amazon or Anthropologie), as opposed to single-brand stores (like J Crew or adidas).
Checkout cross-sells, and particularly cross-sell popups, are popular among ecommerce stores. This strategy aims to target customers when clicking the checkout button. It pitches cross-sell products to customers before they confirm their order.
Note that you can also provide cross-sells on the cart page, whether you have a standalone page or are using an AJAX (popout) cart. In both spots, it can be super effective to offer cross-sells that will help a customer reach your minimum free shipping threshold.
Post-purchase cross-selling has gained significant popularity in recent years. Store owners place these cross-sell offers on post-purchase pages like the order confirmation page, thank you page, order tracking page, and more. The idea is to cross-sell products after the customer has completed the original transaction to drive their next sale.
49% of shoppers have said they purchased a product they didn't initially intend to buy after receiving personalized recommendations.
When and where to use cross-sells
What’s the optimum placement for a cross-sell offer in sales funnels? It’s hard to tell. Here’s a chart to help you make a more informed decision.
Recommendation Box Type
Frequently Bought Together
Below the items on the cart page
Related Items or Cross-Sell
After Frequently Bought Together
Right above the footer
You May Like
4th or 5th section of the home page
LimeSpot: the best Shopify app for cross-sells
LimeSpot is an AI-driven ecommerce conversion platform available on the Shopify app store, as well as on BigCommerce. The platform helps Shopify merchants optimize audience discovery and drive profits. With LimeSpot, you can showcase highly relevant products using detailed trend analysis, product data, and customer behavior analytics.
Create multiple types of cross-sells
LimeSpot helps store owners easily set up product recommendations for cross-sells. When setting up a cross-sell, you’ll choose a reference product to generate cross-sell ideas. Reference points can include the current product a customer is looking at, or products ‘currently in cart’, ‘previously purchased’, and ‘previously visited’.
Personalized product recommendations
LimeSpot lets you personalize all of your ecommerce store's digital touchpoints, from the home page to PDPs, to the cart and email. You can automate personalized recommendations, making cross-sells more efficient and effective. LimeSpot's algorithms focus on continuous performance improvement, learning from customer interactions over time to offer more relevant cross-sell recommendations.
Segmented shopping experiences
LimeSpot gives Shopify merchants the option to curate everything for each customer. Every element of your website can be personalized in real-time for a truly targeted customer journey.
You can leverage customer data, customize page assets, and personalize collections by audience so every visitor has a shopping experience that’s unique to them.
Become a cross-sell expert today
Successful cross-sell offers factors in customer intent and behavior. Thanks to its extensive customer analytics reports, LimeSpot makes only relevant cross-sell offers to your customers.
With well-timed, personalized product recommendations, you can boost sales with the right cross-sells. Sign up for LimeSpot’s free trial to learn how the AI-driven platform revolutionizes the buying experience.