Cross-Selling Discounts: When the Second Item Sells

A cross-selling discount is a discount on a related product, offered to a shopper who is already buying something else: the case with the phone, the filter with the water jug. The offer goes on the second item because the shopper has already chosen the first. A cross sale works best when the second item is something the first needs, like a case or a refill.

What is the difference between cross-selling and upselling?

• A cross-sell offers a different product that goes with the first: the case, the refill, the matching scarf.
• An upsell offers a bigger or better version of the same choice: the larger size, the next model, the three-pack.

The offer sits in a different place for each. A cross-sell asks the shopper to add something they had not planned, so the discount goes on the second item. An upsell builds on a choice already made, so the offer is usually a better deal on more of it or on the bigger version. See how to increase average order value for quantity breaks and thresholds.

What should a cross-sell discount be on?

The accessory, not the main product. The main product is what brought the shopper. Cutting its price gives away margin on a decision already made.

A percentage, on a cheap add-on. Jonah Berger's Rule of 100 (Contagious, 2013) says that under $100, a percentage looks bigger than the same saving in dollars. On a $15 case, "33% off" reads bigger than "$5 off". Above $100, lead with the dollar amount. Our fixed amount vs percentage guide has worked examples.

A small step. "Add the case" works. A second item that costs as much as the first is a second purchase, and few shoppers make it at the cart.

Who should get cross-sell incentives?

Not every customer. Denish Shah and colleagues studied the customer databases of five companies (Journal of Marketing, 2012). Between 10% and 35% of the customers who bought across categories were unprofitable, and they accounted for 39% to 88% of each company's losses from customers. These customers tended to spend little, return a lot, need a lot of service, or buy mainly on promotion. For them, buying in more categories deepened the loss.

For a Shopify store, that means:

• Put cross-sell offers on products that are rarely returned.
• Keep the deepest offers for repeat customers, using a customer segment, instead of showing them to every visitor.

Where do cross-sells fail?

• The link is not obvious. If the shopper has to work out why the two go together, they skip it. Products from the same category are not always products used together.
• It comes too late. Show the offer on the product page or in the cart, while the shopper is still choosing.
• There are too many. Show one offer per product.

How do you set up a cross-sell discount on Shopify?

In Discounty, a cross-sell discount is a Buy X get Y campaign, on the Lite plan and up.

1. Under Customer buys (X), choose the main product, a collection or a tag, and set the minimum quantity. You can choose Minimum spend amount instead, so the offer unlocks once the shopper spends a set amount on those products.
2. Under Customer gets (Y), choose the related product and how many the shopper gets.
3. In Reward configuration, choose Discount percentage, Fixed amount discount or Free gift.
4. Choose how the shopper gets it. Manual selection, the default, applies the discount once the shopper adds Y to the cart. With Show pop-up, the shopper picks the reward in a pop-up once the cart qualifies; it works when Y is set to specific products and variants. Auto-add to cart adds a free gift with a single variant on its own, on the Discounty plan and up. Both need the Discounty app embed turned on in your theme.
5. To keep the offer for your best customers, choose Specific customer segments in Customer selection, on the Discounty plan and up.

The discount applies only to the Y product. The X product keeps its price.

To undo it, deactivate the campaign. It shows as Reverting while Discounty removes the discount.

How we counted

The Shah, Kumar, Qu and Chen figures come from their published paper (Journal of Marketing, 2012), not from Discounty data.

Questions

What is a cross-sell discount?

A discount on a related product, offered to a shopper who is already buying something else, so the second item is easier to add.

What are cross-sell incentives?

Offers that give a shopper a reason to add a related product: a percentage or amount off the second item, or the second item as a free gift.

What is the difference between cross-selling and upselling?

A cross-sell offers a different product that goes with the first. An upsell offers a bigger or better version of the same product.

Should a cross-sell discount be a percentage or an amount?

By Jonah Berger's Rule of 100, under $100 a percentage usually reads bigger, and over $100 the dollar amount does.

When should a cross-sell offer appear?

On the product page or in the cart, while the shopper is still choosing.