Right-Selling

In a previous consideration of cross-selling and upselling tactics, I stumbled across the notion that, in some instances, steering the customer toward a less expensive item that is a more appropriate to their needs is the smart move.  It doesn't really fit the definition of "upselling" because that is a short-term tactic mean to gain as much revenue from the customer in a single selling session - so it stands to reason it should be considered an entirely separate tactic, which I'll call "right-selling" for lack of a better term.

My sense is that right-selling is not very widely practiced or considered, though that's largely based on personal experience and conversational accounts of others whose typical encounter with a salesman involves an unpleasant process of having to decline upgrades and features they didn't want in the first place and do not see the value of purchasing.   It's clearly a practice of trying to sell more today at the cost of creating a customer who will be more inclined to buy from someone else the next time they are in need.

And therein lies the problem of upselling: it is a trade-off designed to increase short-term revenue (and likely profit, because the mark-up on "deluxe versions" and "additional features" is significant) that is indifferent to the consequence of losing of long-term customer value that may be greater.   I will concede that in some instances,  the math works out the other way, such that the short-term revenue gain is worth the long-term loss when future values are discounted - but these instances are likely rare.

Some vendors, and some entire industries, are infamous for this kind of practice.   The example that comes to mind is Best Buy, and appliance retailer who is very pushy about extended warranties.  The last time I purchased an appliance from them, I had to decline their extended warranty four times - once from the clerk who "helped" me select the item, again from the department manager, a third time from the cashier, and a fourth time from the delivery crew.  This is likely the reason that the last time I purchased from them was about a decade ago - and likely it was also the "last time" in the sense of "never again."

On the other hand, some vendors have won my loyalty by right-selling.  For example, auto mechanics are infamous for attempting to sell additional and unnecessary services to customers who need a simple repair.   In fairness, sometimes the damage is more extensive that the customer realizes and more work is genuinely necessary, but mechanics have upsold services too often and too clumsily for customers to trust in their honesty.   In my own experience I have had two repair shops that right sold me - telling me that I needed a less extensive and less expensive repair than I had described to them.

The benefit in doing so is that they won my loyalty, almost instantly.  I have not considered, and would not consider, going anywhere else for automotive services they offer.  (The only reason it's two shops rather than just one is that I moved to a different city.)   I do not expect that I am alone in this, as being right-sold is a very common element of referrals and testimonials I have received from other shoppers.   These people, too, were delighted by right-selling and have given their loyalty to the vendor who practiced it.

The general principle to be derived from these case studies is that customers have a set of expectations - they know what their needs are and have a sense of what it ought to cost to meet them to a satisfactory degree - and where there is a mismatch, they are suspicious.   If the vendor attempts to sell them a more costly solution, they immediately suspect mercenary intent and trust is undermined.   If the vendor suggests a less expensive alternative to meet their needs, they just as immediately recognize that the vendor is concerned about their needs rather than his own profits, and trust is seeded.

The "immediately" in those phrases is significant because there is eventually a reckoning that considers the ultimate outcome of the purchase.  Regardless of whether the customer has been up-sold or right-sold, they will base their final and lasting assessment over whether the purchase solved their needs.  A "successful" (from the vendor's perspective) up-sell that renders no perceived benefit amplifies their sourness about the vendor's motives, and a successful right sell that results in a product that does not solve the problem undermines their confidence in the vendor's competence.   Both are bad for long-term customer loyalty.

So in the end, it seems to come down to the same basic principle: know the customer's needs and sell what is necessary to meet them.   The loyalty of the customer is won or lost, reinforced or undermined, with each and every transaction - and whether it's cross-selling, up-selling, or right-selling it's about offering a product or service that provides a genuine benefit to the customer.   That is not a trade-off for making a profit, but the method by which profit is made.

Making Good Recommendations

In the previous post about cross-selling or upselling, my main concern was differentiating the two practices rather than lumping them together.   Along the way, thoughts bubbled up about how to approach each task effectively.   Rather than making the original post insufferably long (or "more insufferably long" given my tendency to ruminate), I've extracted those passages and am presenting them as a separate entry:


In General

The decision of whether to cross-sell or upsell can be made based on an understanding of the buying process: cross-selling offers additional products once the decision is made to purchase a specific one, whereas upselling interrupts the decision process to suggest a different item that is better suited to the shopper's needs.   This distinction should be made before either practice is attempted.

Once the approach has been chosen, there is a separate decision as to which specific products to offer in a cross-selling or upselling attempt.   This is a significantly different decision that cannot, or should not, be made according to the stage of the buying process, but instead requires a more careful consideration of the needs of the individual shopper as assessed by their characteristics and behaviors.


Cross-Selling

Effective cross-selling requires careful selection of the suggested products.   If it makes sense that the shopper will require the additional products to accomplish the goal for which they selected the main product.   An item may be an appropriate cross-sell because the primary item is of little use without it (batteries for a flashlight, filters for a coffee maker) or it may be an item that is used in the course of performing an anticipated task in which the main product is used (trash bags with a rake, oven mitts with a banking pan).

It should not, in any case, be without a plausible connection to the primary product.   Poor cross-selling occurs in instances when no apparent relationships exists between the main product and the suggested product (because you bought a coffee pot, consider buying motor oil).  If the relationship between the items is not evident to the shopper, he develops the sense that the seller is pushing random merchandise with no regard for his needs or interests ... because that's exactly what the seller is doing.

The problem that arises when sellers attempt to fill in empty space with product promotion is that it undermines the value of suggestion.    Where there is a logical connection between one product and another, shoppers become conditioned (in the Pavlovian sense) to recognize that suggested items add value to the primary item.   Where there is not a logical connection, they become conditioned to recognize that there is no logic to the cross-selling, hence no value to themselves, and they learn to ignore it in future.

With that in mind, design should be undertaken with the goal of producing an interface that can accommodate suggestive selling, but does not require it.  In the latter case, there is the temptation (which is often irresistible) to fill the void with random and unrelated products.  Such practices not only result in a low take-rate for a specific offer, but in diminishing effectiveness of the cross-selling program in general.


Bundling

Effective bundling also requires careful selection of the bundled products.   As a subset of cross-selling, it still means that the shopper should need the additional products to make use of the main product, but it must be far more stringent in considering whether an additional product should be bundled.   In particular, bundling should be limited to items without which the primary item will be useless, rather than items that might be needed in case the shopper is performing a specific task.

The benefit of the bundle is that it enables the shopper to purchase multiple items at once - but the drawback is that the shopper may have the perception that they have no option to buy the original item without the suggested ones - and will opt to purchase neither from a given vendor.   For example, a store that bundles trash bags with a rake (and does not allow for the purchase for the bags without a rake) will sell fewer trash bags to shoppers who need that item only and do not wish to purchase a rake.   Such shoppers will take their business elsewhere - and there's a risk of their doing so immediately, without investigating the possibility of buying the items in an un-bundled fashion.

The solution is fairly simple: to offer the shopper the option of purchasing any item in a bundle rather than making the additional purchases mandatory, such that he may add only the main item if he so desires, or take advantage of the bundle if he so desires.   Also, when items are offered in bundled fashion, provide a prominent and unmistakable affordance to purchase them separately.

Badly conceived bundling has the same flaws as badly conceived poor cross-selling: where there is not a clear relationship between the main items and the bundled items (and for bundling, it must be very clear) the shopper will reject the bundle and shop elsewhere.  He will in future ignore your suggestions without giving them much attention and, if you bundle extensively, he may decide not to shop your store or site at all.


Upselling

Effective upselling is different, in that it requires careful selection of an alternate product not in reference to a specific product, but in reference to the shopper's needs in a more general sense. That is to say that suggesting they by Deluxe-A instead of Standard-A should be based on the knowledge of the shopper's desired outcome, and the confidence that the additional cost of acquiring Deluxe-A will be justified by additional benefits the shopper will receive for having chosen it.

It's also worth noting that upselling is not limited to a "deluxe" version of a given product, but may involve selling a different product altogether - rather than a deluxe broom, the customer's needs would be better served by a vacuum cleaner.  To do this, you would need to know the customer's needs (they are seeking to clean a carpet rather than a hard surface) either by inquisition or inference.

(As an aside, it occurs to me that this may not always be an "up" sell to a more expensive item, but could be a lateral or downgrade to a more appropriate but less expensive item.  This does entail sacrificing short-term sales because the original item was more expensive for the seller, but my sense is that it is a better long-term strategy for earning trust and loyalty - but that's likely a separate and longer meditation.)

In order to upsell well, a seller must know his shopper well.   Shoppers are leery of up-selling and distrustful of merchants who are constantly trying to get them to pay more for an upscaled product whose additional features offer them no benefit - as such the practice of showing a "deluxe" version creates instant mistrust that must then be dispelled by explaining the value of the additional features to the shopper.

In general, standard products generally outsell deluxe products because most shoppers do not really need the added features.   Too many sellers take the attitude that shoppers don't understand the value and need to be educated about the product - the irony of which is that in such situation it is the sellers who do not understand the shoppers needs and need to educate themselves about their customers.

It's also worth noting that product customization is often a species of upselling, at least in instances in which the customer has the ability to make changes to the product for an additional price.  The same problem of assumption occurs, and it is incumbent on the seller to educate himself about the shopper's needs rather than the shopper's to learn about the value of the product in order that the shopper will be amenable to paying a higher price.

Poor upselling makes the general assumption that Deluxe-A is a better alternative to Standard-A for everyone - and it very often is not.   As such, attempting to upsell a shopper whose needs are served by Standard-A will not only fail, but it will cause the shopper to regard the seller as untrustworthy and ignore their suggestions in future.


Sometimes, Your Best Option is to Do Nothing

Grandmotherly advice for social interaction is that if you can't say something nice, then don't say anything at all.    This dictum is equally worthwhile to consider from cross-selling or upselling that if you can't suggest something appropriate, then don't suggest anything at all.

Marketers are too eager to blabber at shoppers in order to make a sale, and designers and developers are too eager to set a "default value" when designing and building applications because the page would look odd with an empty space and it's easier to cram something into the hole than design an interface that works equally well without a selling module.    This has led to a serious problem for cross-selling and upselling systems, in that if the system is unable to determine (based on rules created by the marketers) which products would be appropriate to suggest, there must be some product to use as a filler even if the product is wholly irrelevant and inappropriate to the shopper.

It should be obvious this is an extremely inadvisable solution - as has been mentioned in the previous content, suggesting inappropriate items trains customers to regard your suggestions as worthless and the general level of trust that shoppers are willing to place in the brand will be diminished - such that the harm in making bad suggestions is that any future suggestion will be disregarded, even if it is carefully made and well considered.

A likely reason that the marketing profession is covalent on the notion of suggestive selling is that some shoppers appear to like it and others appear to hate it.   But I would posit that it is not the difference between shoppers, but the difference between sellers.    A salesman or store clerk who is adept at understanding the needs of his customers is valued, and even loved, by those customers - not only for making valuable suggestions but for refraining from trying to "push" when no suggestion is appropriate.   One who is not adept at understanding the needs of his customers is annoying and obnoxious - he is not merely "not loved" but over time becomes to be distrusted and even disliked.  It is, in essence, the difference between being regarded as a helpful salesman or a pushy salesman.

Said another way, if you have found that cross-selling and upselling have not worked out for you, it is likely because you are doing it very badly and entirely too often - and rather than dismissing the value of cross-selling and upselling in general, humbly accept that you have acted inappropriately, and making a concerted effort to change your behavior - or just as humbly recognize that you are no good at it, and stop pushing.

Cross-Selling or Upselling

To better understand the concepts of cross-selling and upselling, the two concepts need to be disentangled.   The use of "and" often leads marketers to consider cross-selling and upselling to be essentially the same with very subtle differences.  However, ignoring the difference will lead to errors that can undermine their effectiveness and disrupt the customer's behavior in a way that negatively impacts revenues, so it merits careful consideration.

(Note: I've prepared this material in the context of a very specific discussion about "cross-selling and upselling" on product pages in an ecommerce site - just not enough space in the discussion forum's 1000-character limit to fully explain.   As such I need to provide some redundant detail from the conversation as well as broader detail so that it makes sense in the context of a blog, read by others who weren't party to the discussion - but it's essentially about determining the right places in a flow to cross-sell or upsell the shopper.)

Cross-Selling

The distinguishing characteristic to cross-selling is that the seller wants they buyer to purchase another item in addition to the item they are presently considering.   The phrase "in addition to" is critical, in that the seller still wants them to purchase the original item.

The problem with cross-selling on a product detail page is that the shopper has not yet completed the action of selecting the original item.   To consider other items at this time derails them from their task flow, and may end up distracting them to the point that they do not complete the original task (they leave the page to consider the suggested items and do not return to purchase the original), or suddenly feel overwhelmed by it (they get the sense the original item will be useless without the additional ones and decide the total cost is not appealing).

Cross-selling is appropriate to the shopping cart view, particularly in the moment after an item has been added.  At that point, the buyers' momentum has run its course: they have added the intended item, and are now open to consider other items before completing the purchase.  More importantly, their decision to purchase the original item and its precipitating actions have not been interrupted.

Specifically, cross-selling is not appropriate until a decision to purchase an item has been made.   In that sense, I can see only two pages in a purchase flow where cross-selling should be done: the shopping-cart view (which encourages the shopper to add additional items before finalizing their purchase) and the order confirmation page (which encourages the shopper to return in future to purchase additional items).

There are also instances before and after the shopping task when cross-selling can be done: advertising can preload a "set" of items in the shopper's mind before he enters the store, and cross-selling on an invoice or shipment notice can bring them back to purchase other items.   But when the shopper is in the process of evaluating options, cross-selling can only be disruptive.

Special Case: Bundling

The "cross-selling" done on Amazon's site has been cited as proof of cross-selling, but there is a subtle distinction to be made:  all bundling is cross-selling, but not all cross-selling is bundling.

Bundling requires the purchase of items in a set - per the example of Amazon, the offer to "buy all three and save" requires you to purchase all three items to get the deal and (presently) provides no opportunity to purchase only two of the items without the third.   The shopper who wants only two of the items must go through a longer process (add the present item, seek out the second item, add it to the cart separately, and forego the deal).  Therein lies the problem - is that the task becomes daunting and the shopper may decide at any time to abandon the entire transaction.

The experience could be somewhat improved by creating flexibility in the bundling options - to enable the customer to choose either or both of the complementary items on the intended product page before adding to cart.  This creates a bit more complication, but far less than having to add the items individually.   But again, this would be cross-selling rather than bundling because the customer is able to opt into buying each item rather than having them bound together in a bundle.

Bundling makes perfect sense and is generally acceptable to buyers when the accompanying items are necessary to the use of the primary item - an in some instances failing to bundle disappoints consumers ("batteries not included" is a disappointment if it is discovered only after the customer has arrived home with the item and no batteries) and vendors will even merge the two into a single product (batteries are included in the package of the original item, rather than a separate package bundled to it).

Upselling

The distinguishing characteristic to upselling is that the seller wants the buyer to purchase another item instead of the item they are presently considering.   The qualifier "instead of" is the essential difference between cross-selling and upselling, in that the seller no longer wants buyers to purchase the original item when they choose the alternative item presented.

Upselling is appropriate to product information pages because the shopper is evaluating a product as a possible solution to his needs, and may be open to suggestions that there may be a better alternative.   While the seller's motive is generally to push the buyer in the direction of an item that is more profitable for them to sell, buyers can be amenable to this if they understand why they should prefer the alternate product and feel that the additional benefit they get is worth the additional cost.

Upselling is not appropriate on a "shopping cart" page, because at that point the shopper has made a decision to purchase a specific item.   Even if he agrees that an alternate product would be better, he must now remove the original item from his cart as well as adding the replacement item.   But worse than that, the upsell is an implicit suggestion that the shopper has made a bad decision - the product you just added to your cart is not really what you need - as a necessary step in suggesting a better one.   Whereas an upsell on the product page helps the shopper to make an informed decision, the shopping cart is attempting to reverse a bad decision - and to suggest the decision they just made is bad will be either offensive to the shopper or at the very least undermine his confidence in the purchase and the level of service he is receiving from the seller.

It's also worth considering that an upsell can be initiated at other times during the shopping process - at any time when the shopper is considering products that might address their needs, they can be presented an option that might be better suited that the one(s) they might see before them.  As such, it's appropriate to upsell on a list of products (a category menu or search results) as well as on the product information page, and other locations as well.

The only time it is inappropriate to upsell is after a specific decision has been made and acted upon - which would be the shopping cart and order confirmation pages ... the exact pages where cross-selling is most appropriate.

Consider the Shopper

In all, the decision to upsell or cross-sell must be made in consideration of the shopper's buying process (which can be significantly different to the seller's desired selling process) as well as the needs of the individual shopper.

That is to say that making an appropriate decision to cross-sell or up-sell must be based on the shopper's situation of the moment: whether they are considering which product to purchase, or the decision has already been made.   Neglecting to consider the difference leads to serious problems that will cause the immediate attempt to fail.

Once that has been determined, making an effective decision of which products to offer must rely on an intelligent or, preferably, an informed decision as to the specific products that will be needed based on the need that the shopper is attempting to address.

The latter is very similar in both cross-selling and upselling, but the former is significant to the decision as to whether cross-selling or upselling is appropriate at all.