Just because a customer is ready to make a transaction, that does not mean they have finalized their purchase. Think back to your personal life and ask yourself how many times you have left a store while forgetting an item or realizing afterward you still need another part of the purchase. Maybe you purchased an item that requires assembly and you do not have the right tools for the job. Or maybe you forget a critical ingredient for a recipe at the grocery store. One example we have all experienced is purchasing an item that requires batteries, and you never realize it until you are already home.

Unfortunately for merchants, customers are not guaranteed to come back to acquire that secondary item. If customers buy an alarm clock at an electronics store, there is no reason to go back to that store to get the batteries when they can simply head to the convenience store down the street. In that regard, merchants have effectively lost a sale – while they got the customer to make one purchase, they could have secured another sale if they had been more active in making product recommendations.

Moreover, offering add-ons are not just a way of generating additional revenue for the seller – it is also a means of improving the customer experience. It shows retailers know products like the backs of their hands and are able to quickly identify supplemental products of which people are often unaware.

“Experienced sales members and entry level cashiers alike are often encouraged and incentivized to entice add-on purchases for customers,” added Multichannel Merchant contributor Murtaza Hamdani. “When done correctly, the upsell increases customer spend while also increasing satisfaction levels, making shoppers feel like they got a great deal, saved time or satisfied a need.”

Making add-ons and upsells a valuable part of the shopping experience

While add-ons and upsells can be beneficial to merchants and the overall shopping experience, they can also be problematic if not carried out properly. This is particularly the case online, where much of the shopping experience is self-guided and the only way for merchants to offer product recommendations is by using data to power automated suggestions.

For instance, if merchants detect users are looking at an MP3 player, they may suggest headphones and a carrying case to go alongside the purchase. But what if that individual recently purchased a pair of headphones? Then, it makes merchants seem like they are not paying attention, particularly if that individual made the purchase through that retailer already. Moreover, that is a wasted upsell opportunity as well. Retailers could have recommended something more pertinent that could have secure another sale.

“Without the benefit of engaging in two-way communication with customers, the eCommerce channel cannot analyze needs and attitudes in real-time and alter tactics accordingly,” Hamdani explained. “It is also extremely easy for online customers to abandon sites the moment they feel they are being hustled, even if it means ditching a full shopping cart. That happens in a split second.”

Here are a few steps merchants can take to improve their upsell and add-on initiatives:

1. Create a seamless customer database

Information is pivotal to the success of product recommendations and upsells, the more data retailers have about their customers, the more effectively they can craft highly-tailored and pertinent suggestions. This starts by creating a unified customer profile that pools relevant information about shoppers from all interactions, whether it is information about which products they looked at or their order history. Gathering this intelligence minimizes recommendation mistakes and makes it seem like retailers truly understand their customers.

This data can be a powerful tool, both for crafting online suggestions and empowering in-store employees who can look up customer information on the fly using tablets or other mobile devices. Whether online or in-store, information is critical to making the right recommendations.

2. Make the offer attractive

Relevance is a great starting step for product recommendations and upsells, but merchants should also consider offering some sort of deal. Even if customers need an item sometime down the line, creating a larger order value may not be something they jump at. Promotional pricing can create a sense of urgency that may push some people over the fence.

3. Don’t be pushy

Just because a customer is buying one item, that does not mean they want to buy the entire store. Retailers may actually lose customers by being too pushy with upsells and add-ons, so retailers should aim to avoid trying to force additional purchases on customers.

Add-ons and upsells can lead to a better customer experience overall, merchants just need to know how to execute them properly and effectively.

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