Technology advancements have changed the way we manage our “related products” in e-commerce. Let’s take a look at the way that some of the biggest players are maximising conversion rates and increasing total order values through cross selling.
Today we’re going to look at Customer Behavior Based Cross Selling (I’ve also seen it called algorithmic cross-selling). In a nutshell, these cross selling modules comb through actual shopping data (e.g. product view patterns or order history) to display cross sells that are the most relevant to your customer segments, automatically.
Here are the 4 most common custom behavior based cross sell implementations:
- Who Viewed This Also Viewed
- Who Bought This Also Bought
- Frequently Bought Together
- People Who Viewed This Ultimately Bought
The titles of them are fairly self explanatory, so I won’t put you to sleep explaining each one. If you have questions, just drop us a comment.
Why is this type of cross selling so successful?
1. Social Proof. Briefly, social proof is the concept that if it’s good enough for others, it’s good enough for me. Customer behavior based upsells resonate with customers better because they feel like the product recommendations are coming from fellow customers. To quote my freshman year Small Business Administration professor, “It’s not about what you say about your products, but what your customers say.” Same idea.
2. Automation. Especially if you have a large catalog, it would be relatively impossible to keep up with manually assigning cross sells for each of your products.
3. You’re not a customer. You know too much about your business and about your industry. So it’s very difficult to get inside your customers’ heads about what additional products they would consider. Actual shopping behavior is a much better metric to get the right products in front of your customer segments.
Some companies, like Prediggo, believe that if you’re blindly implementing customer behavior based cross-selling, you’re making a grave mistake!
I had the pleasure of chatting with Andrew from Prediggo (www.prediggo.com), and he gave me a few reasons why these methods might not be all they’re cracked up to be.
1. They’re a self-fulfilling prophecy. If customers start viewing certain products in a pattern, they start dominating your cross sells (views, purchases, etc). What happens over time is that you may be whittling your cross sells to a smaller and smaller subset of your catalog. Not everyone can refresh their data like Amazon does: daily.
2. They favor promotional items. If you run a promotion, a lot of your views and purchases will consist of those promotion products. Why would you want to steer all of your customers to your lowest profit margin products? That defeats the whole purpose of cross-selling and upselling.
Here at Redstage, our customers have had a lot of success with customer behavior based cross sells. What’s your experience?
If you have questions about customer behavior based upsells or want to share your experience, drop us a comment!