Success with Upsells, Cross-sells, Bumps and Downsells?

Backend techniques that may increase profits

[derekwong28]

I went to the World Internet Summit recently in Singapore. One of the gurus there who used to be a general manager of Toyota dealer saie that using backend techniques such as upsells, cross-sells, bumps, and downsells could increase profits by as much as 50%. Examples of where these techniques could be found extensively in sites such as Aodaddy and Amazon. I wonder whether anybody is having success with these techniques and if so the extent of increase in revenue.

Here is a brief summary of terminologu

Upsell - ask the customer whether he would like a large or better version
Cross-sell - sell related products
Bumps - offer two or more items at a reduced price
Downsell - offer a customer a stripped down version at a reduced price.

[Habtom]

Do all those apply to online retailers?

Hab

[derekwong28]

Yes it does. In fact, this is probably more effective in online marketing than offline marketing.

The guru was in question was the general manager of a toyota dealership. He said that they used to sell toyota camry cars at $16500 whereas they had to pay $17000 per car. Therefore on paper, they were losing $500 per car.

However, they knew that they were going to make a profit by "monetarising their backend" ie. offer tinted glass, sunroof, extended warranty and other options. Therefore, on average they make about $1500 per Camry.

His message was that you can lose money on your main product provided that you can monetarize your backend properly.

Another technique he mentioned was the "Sales Funnel" i.e. sale to the customer a succession of products at increasing prices e.g.

The first sale could be an eBook at $19.95. The customer is then induced to buy a DVD set at $79.95, then a multimedia home study course at 299, a two day seminar at $799, and finally a full mentorship program at $5000.

Sorry "another" should read "anyone" in the headling of the thread.

[oziman]

For sure this works -

I've seen it with shipped products where the buyer gives his email but then abandons the cart. He then gets an email which offers 10% off if he comes back - you'd be surprised at the conversion rate. An interesting way to approach the shopping cart.

Same goes for volume/cross up sells.

This is a given - amazon does it extremely well and I know I've bought books (that I ended up liking) solely because of their cross selling stuff.

[jsinger]

I've seen it with shipped products where the buyer gives his email but then abandons the cart. He then gets an email which offers 10% off if he comes back - you'd be surprised at the conversion rate. An interesting way to approach the shopping cart.

Very tacky. I'm SURE it works well once customers learn to game that system.

Danger of upsale/cross-sell is that it can end up cluttering the check out process. When the customer is at the checkout counter, best approach may be to grab his money while he's in the mood.

From my experience looking at competitors' sites, the cross-sell product is often utterly unrelated to what the customer already has in his cart.

Makes sense sometimes (film with camera, batteries with a toy) but, most often the upsale attempt results in annoying and confusing clutter that can be counterproductive to the sale.

Another problem: I figure that any site that high-pressures me while I'm shopping is going to swamp me with email spam later.

[Essex_boy]

Sales Funnel- Ive been caught by that, teh effective thing is you know how good teh firm is before they offer X to you so you trust them already. Simple really

I been reading a book on increasing your conversions its it does say that its best not to do this as the customers mind is taken off of the purchase process i.e the momentum is lost and so might they.

[Mr Bo Jangles]

No one does it better than GoDaddy - I don't get annoyed by it on their site, but rather take my hat off to them. You might get annoyed by it on their site if the rest of their systmes didn't work - but my experience is that they do - they are a class act in domain purchase and management IMO.

No affilation except that they keep taking/getting my money *_*

[seodimensions]

I think there is something to this. I've read recently...that an online store can upsell/cross-sell during the return process. Some companies fight the return and lose customers and others are very flexible with their return policies and upsell during the process (and keep a long term customer). Smart.

[D_Blackwell]

I've seen it with shipped products where the buyer gives his email but then abandons the cart. He then gets an email which offers 10% off if he comes back - you'd be surprised at the conversion rate. An interesting way to approach the shopping cart.

I dropped a service that I liked - but decided wasn't worth what I was paying. After dropping them I got an offer to rejoin at a about a 25% discount, with no time limitation teaser - a permanent price. I might have kept the service if it had been that much less to start with, but was furious at having been paying 25% too much all along. I just felt stupid - and abused.

[Habtom]

>> I might have kept the service if it had been that much less to start with, but was furious at having been paying 25% too much all along. I just felt stupid - and abused.

Offering for less if they come back, doesn't seem it is going to earn you a long time trust. I feel like it is playing around trust a little bit. The person might say, what if I stay for some more time, 50% off? The next time he buys something, I think he/she will know that the item could be offered for much less if I just turn my shoulders.

It doesn't seem much of a good idea to me.

Habtom