Upselling and Cross-Selling: Engage More Customers as a D2C eCommerce Brand

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Statistica Research Department published a study that states, after growing 45.5% (worth $111.54 billion) in 2020, the expected D2C eCommerce sales in 2023 is over $175 billion, only in the U.S. It throws an impression that plenty of high paying customers are ready to engage with your upselling and cross-selling strategies. If accomplished properly, these upselling and cross-selling methodologies can immensely stimulate your average order values (AOVs) and Lifetime values (LTVs) of a customer and, at the same time, scale your D2C brand exponentially.
With the ever-increasing competition in all markets, your customers have multiple options to choose from. They can leave brands even if they experience the slightest hint of inconvenience. In order to pierce through this competition, you have to leverage strategies that not only help you connect with your customers but also help your customers become loyal to your brand.
To understand upselling and cross-selling a bit better, let’s get some deeper insights into the marketing world by exploring these terms a little further. So, are you ready to dive in?

Difference Between Upselling and Cross-Selling

Upselling is the kind of sales technique where you target already engaged customers by encouraging them to buy upgraded or comparatively expensive products to add to their carts. Especially for a D2C brand, upsell is a great tactic to generate relatively higher revenue from a sale with limited marketing strategies involved. Meanwhile, upselling examples can include a situation wherein a customer wants to buy a standard wristwatch from an online store, and the website suggests a new smartwatch model with a Bluetooth connectivity option.
In cross-selling sales technique, you target both new and existing customers by suggesting relevant or additional items to their prior purchase. From a D2C perspective, offering related add-ons to an original product is an effective marketing strategy to convert customers by adding value to their purchase. Cross-selling examples can be taken from your daily life situations, where you select a burger from your online app, and they offer you a deal with complementary fries and a drink.

Top 3 Benefits of Upselling and Cross-Selling

Here are the three core advantages of effective upselling and cross-selling strategies:

Draws-in More Revenue
By increasing your average order value (AOV) to over 10-30%, upselling helps you attract more customers willing to pay more for your offered, high-end products. Also, when it comes to evaluating the lifetime value (LTV) of a customer, upselling is relatively found to be 20x more profitable and 68% more economical than maintaining a new customer.
On the other hand, according to McKinsey, cross-selling can also impact revenue by increasing sales by over 20% and profit margins by over 30%. Thus, keeping an eye on metrics (like AOV and LTV) can improve your upselling and cross-selling strategies for improved results.
Quick Conversions with Personalized Customer Approach
Data-driven upsell and cross-sell help enhance your customer experience with an optimized and personalized approach. Subsequently, personalized customer targeting has a higher conversion rate, which dramatically adds to both the LTV and AOV of a D2C brand.
The significance of personalized upselling and cross-selling can be analyzed because 81% of the customers said they want their respective brands to get to know them and understand when to engage them. But that’s not where the tables turn. Another study shows that 77% of the customers have selected, recommended, or even paid more for a brand offering a personalized experience.
Builds a Loyal Customer-Base
Research uncovers that 32% of both the seasoned and potential customers reorder from the same company in their first-year interaction. This indicates that the probability of an increased LTV by proper upselling and cross-selling is relatively high. As they say, the key to a successful D2C, or any business for that matter, is a happy and satisfied customer. And if you upsell and cross-sell with a value-driven approach, it can be a win-win situation for both the brand and its customers.

Final Thoughts

Upselling and cross-selling are among the most complicated actions to perform well, primarily if your D2C eCommerce brand depends on them. However, it can also surprise you with some unexpectedly incredible results. Like back in 2006, Amazon shared that cross-sells were responsible for 35% of their ultimate sales that year. Now, with a massive increase of 76% in online sales due to the pandemic, you can imagine the wonders a personalized upselling strategy is capable of doing to your D2C eCommerce business. So happy upselling and cross-selling!

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