A common question for e-commerce growth is, “How can I increase my average order value?” The answer I always go to first: cross-selling and upselling. These tactics give customers related product options or promotions that enhance their shopping experience—and increase your revenue at the same time.

Let’s dive into how cross-selling and upselling work, their impact, and the formulas you can use to measure their success.

Understanding Cross-Selling and Upselling in E-commerce

You’ve seen cross-selling and upselling everywhere, even if you haven’t realized it. Take department stores and cafes like Starbucks: as you approach the register, you’re presented with smaller, complementary products—low-cost items that customers add on without a second thought. The same approach applies to e-commerce, where a well-placed suggestion can turn a single purchase into a larger order.

For example, let’s say a customer adds a shirt to their cart. Immediately, a cross-sell suggestion offers a matching hat. These simple prompts work wonders for increasing average order value (AOV). In fact, upselling alone can boost revenue by 10-30% and accounts for 4% of total e-commerce sales in the U.S.

Key Metrics for Measuring Upsell Success

To make sure your upsell strategy is working, track these essential metrics:

1. Upsell Success Rate: Measures how often customers accept your upsell offers. This is a good indicator of whether the offers are resonating.
2. Upsell Contribution to Revenue (UCR): Calculates the percentage of total revenue driven by upsells. Use this formula:
3. UCR=(Upsell RevenueTotal Revenue)×100\text{UCR} = \left(\frac{\text{Upsell Revenue}}{\text{Total Revenue}}\right) \times 100UCR=(Total RevenueUpsell Revenue​)×100
4. Upsell-Driven AOV Increase: This tracks the impact of upsells on your overall average order value.

Take screenshots or create a simple Google Sheet with these formulas to track the success of your upselling strategy month to month. Your order data or upsell apps can help you pull this information.

Making Your Upsells Work

Here are some best practices to create effective upsells:

1. Know Your Customer: Understanding your audience’s preferences is crucial. Consider using AI-driven tools to offer personalized upsell recommendations that align with customer buying patterns.
2. Timing and Relevance: Place your upsell options at the right stage in the buyer’s journey—either in the cart or right below the “Add to Cart” button on product pages. The goal is to offer something relevant without disrupting the checkout process.
3. Highlight Value: Make it clear why the additional product is beneficial. For example, will they get free shipping, a discount, or a product that enhances their original purchase? Reinforce how the add-on adds value to their purchase.
4. Test and Optimize: No strategy is complete without testing. Run upsell and cross-sell experiments for at least 30 days, then refine and implement the top-performing versions for long-term use.

Turning Insights into Action

Using these metrics and strategies can have a significant impact on your bottom line. Not only can they increase your average order value, but they can also enhance customer satisfaction by offering meaningful, tailored suggestions.

Take these insights and apply them to your business. With a little testing and iteration, cross-selling and upselling can become powerful tools for driving growth. Good luck, and watch your revenue climb!