According to Forrester research, cross-selling and up-selling is responsible for anywhere between 10% - 30% of e-commerce revenue. Cross-selling attempts to sell a complementary product or service (e.g. offering a printer to customers buying a computer), while up-selling attempts to sell a more expensive version of the same product (e.g. offering a faster, more powerful computer). However, superior results can't be achieved by making generic offers across the board or pushing products without concern for fit or need. Today's customers know when you're trying to squeeze more from their wallet, and irrelevant offers end up decreasing their engagement.
Cross-selling and up-selling is most effective when customers are provided with targeted “just for me” offers, which are personalised to the specific needs and characteristics of each individual customer. The challenge in generating these types of personalised offers is the amount of data analysis required to decide:
- What specific products or services should be recommended? to what customers?
- What items should be recommended together? at what price?
- What is the next item the customer is likely to look for?