Making (More) Money in Online Stores

WASHINGTON -- "This session's a little bit different," opened Michael Dell'Arciprete, vice president of marketing of coffee retailer Boca Java, here yesterday at eTail East 2008. "This one is all about making money."

At most conferences, last sessions of the day usually don't attract the crowds -- and, granted, another of eTail East's three tracks had been rescheduled -- but the room was surprisingly packed as attendees filled every seat and lined the back walls for Dell'Arciprete's presentation on "Best Practices for Cross Marketing and Upselling to Drive Higher Sales."

According to Dell'Arciprete, the objectives of cross- and upselling customers are threefold:

1. increase the average order value (AOV);
2. increase the customer satisfaction; and
3. increase product awareness.

In contrast, he explained to the audience, the following describe what cross- and upselling should not be:

• a method for pushing slow moving inventory;
• a method that causes customer confusion or shopping-cart abandonment; or
• a method that decreases customer satisfaction.

In his presentation, Dell'Arciprete outlined exactly what e-commerce marketers must achieve -- and avoid -- to successfully benefit from cross-sell and upsell opportunities:

• Show relevant items: When a customer's selected an item, present links and images to products that supplement that items, or alternatives such as larger amounts, which become upsell opportunities.
• Speak to the customer: Try "You might like," as opposed to "We suggest."
• Solve problems: Based on what that consumer is browsing for or adding to a shopping cart, suggest items that are typically needed in conjunction with the product -- it not only avoids the hassle of having to purchase later on, but also saves on additional shipping costs. Offer deals that provide a discount on the combined price of the products so that it's cheaper than buying individually.
• Let customers sell to customers: Enable your community of customers to create user-generated content to rate and review products, thereby improving a company's "credibility factor." Show "Top Rated" items that help customers see what others like them have purchased.
• Cross-sell and upsell in the cart: The biggest mistake marketers make is forcing consumers to leave the shopping-cart page in order to add to their purchase. This risks confusing the customer in a way that may mean passing up an additional product, or worse, abandoning the cart altogether once the site has navigated the consumer away from the checkout process. When offering additional products for consideration, have a check box -- or an "add to cart" button -- that seamlessly includes the item. While it's best to keep a consumer on the same page, make sure a shopper can still easily access product pages without fear of disturbing an existing order. (Pop-up or "hover-over" windows can work.)
  
• Use time-sensitive promotions: Giving consumers a sense of urgency motivates them to take advantage. It is critical, however, to ensure that the deal is limited and does not get recycled, a mistake that could significantly decrease the credibility of all future deals -- and, worse, brand credibility in general.
• Include the service accessories: Make impulse-based service-related purchases -- such as gift wrapping, gift cards, warranties, storage containers, etc. -- highly visible.
  
• Give them value they've earned: Consider bundling multiple items, discounting one item with the purchase of another, or providing services such as free shipping when customers have reached a certain threshold.
  
• Explain things when necessary: Provide an "online glossary" that communicates the characteristics of an item.

Dell'Arciprete also pointed out that, while putting these measures in place, there are common e-commerce mistakes that must be avoided:

• Don't offer too many options -- a crowded site will often lead to confusion and distraction.
• Don't offer items that are completely irrelevant.
• Don't speak in an "expert" language. Dell'Arciprete recalled going to a site that actually "made [him] feel dumb." Provide descriptions or definitions that directly communicate the product and its features, using language that doesn't alienate shoppers.
• Don't engage in brand wars, especially when a customer is about to check out. Seeing a new alternative, customers may want to leave the site to conduct research -- and that could result in the decision to end up purchasing elsewhere.
• Don't offer seasonal items post-season, unless there's a discount angle, such as, "Prepare for later by buying now."
  
• Don't show out-of-stock items unless back orders can be made seamlessly.

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