Podcast Summary: Perpetual Traffic Episode - "Maximize Your Profits with These 6 Brilliant Cross-Sell Plays"
Episode Information:
- Title: Maximize Your Profits with These 6 Brilliant Cross-Sell Plays
- Release Date: July 18, 2025
- Hosts: Ralph Burns (Founder & CEO of Tier 11) and Lauren E. Petrulo (Founder of Mongoose Media)
Introduction
In this episode of Perpetual Traffic, hosts Ralph Burns and Lauren E. Petrulo delve into advanced strategies for maximizing profits through effective cross-selling and upselling techniques. Focusing primarily on e-commerce, the discussion revolves around enhancing the New Average Order Value (NAOV) to optimize customer acquisition costs and lifetime value.
Understanding NAOV and Its Importance
Ralph Burns introduces the concept of NAOV, emphasizing its significance as a key marketing performance indicator essential for determining the optimal amount to invest in acquiring a customer. He mentions:
“[...] NAOV, or New Average Order Value, is one of those marketing Performance indicators. That's absolutely essential that you know so you can figure out how much you are willing and able to pay to acquire a customer.”
[02:01]
Lauren E. Petrulo reinforces the importance of preparing for high-sales periods like Black Friday by optimizing NAOV:
“Now, listen to what we're talking about here and think, hmm, how can I apply this to my business. [...] you must have your Black Friday plan mapped out.”
[03:07]
Cross-Sell vs. Upsell: Defining the Difference
The hosts clarify the distinction between cross-selling and upselling to set the foundation for their strategies.
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Cross-Sell: Offering complementary products that enhance the original purchase.
Lauren E. Petrulo: “The cross sell is where you're complimentary, so C, cross complimentary.”
[06:35] -
Upsell: Encouraging the purchase of a higher-value version of the same product or adding more quantity.
Lauren E. Petrulo: “The upsell is increasing more of the same.”
[06:35]
Six Brilliant Cross-Sell and Upsell Strategies
1. Bundling Products
Bundling involves selling multiple related products together at a discounted rate, enhancing perceived value.
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Example: A beauty client offers a "No Makeup Makeup Look" bundle comprising six to seven products, focusing on delivering a complete after-state solution.
Ralph Burns: “...bundling stuff together. It's like, oh, like the battery that goes in that plugs in for the Sony camera...”
[08:15] -
Challenges: Overly aggressive bundling can create friction. Lauren shares an experience where large bundles overwhelmed customers:
“...we had like the oil control bundle and that caused too much friction versus it being a gradual increase.”
[28:24]
2. Upselling into a Subscription
Transitioning customers from one-time purchases to recurring subscriptions can significantly increase Lifetime Value (LTV).
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Example: Offering a "Subscribe and Save" option where customers receive a discount for regular deliveries.
Ralph Burns: “They have a subscribe and save option that’s slightly less than if you would buy it on Amazon.”
[17:50] -
Benefits: Increased LTV and customer retention.
3. Upselling with Incentives
Providing additional benefits such as free shipping, gifts, or discounts to encourage higher-value purchases.
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Example: Offering a premium product bundle with added free products and expedited shipping.
Lauren E. Petrulo: “...if you're doing that pop up, you have to make sure that you have a delay in place because you don't want to interrupt.”
[32:16]
4. Alternating Products
Guiding customers to superior or more comprehensive products that better meet their needs through side-by-side comparisons.
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Example: Apple and Amazon effectively use side-by-side comparisons to showcase higher-end products, encouraging customers to upgrade.
Ralph Burns: “...Amazon does it extraordinarily well. Like when I was buying that Sony camera... it’s a great example of like the side by side comparison.”
[13:07]
5. Upselling into Bundles
Offering related multiple products together at a reduced price to provide a more complete solution.
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Example: Creating travel kits or complete sets with matching products at discounted rates.
Lauren E. Petrulo: “We have like 97 different brands. So we'll say you can complete the kit that it’s with so that you have the same matching sets at a discount.”
[26:42]
6. Pre-Purchase, Mid-Purchase, and Post-Purchase Upsells
Implementing upsells at various stages of the customer journey to maximize NAOV.
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Pre-Purchase Upsell: Product recommendations on the product page before adding to the cart.
Ralph Burns: “...your pre purchase upsell. Just before you even go into the purchase in some cases.”
[11:23] -
Mid-Purchase Upsell: Offers presented during the checkout process, such as add-ons or upgrades.
Lauren E. Petrulo: “...like Amazon one click buy solution. It’s just like one click ad.”
[11:49] -
Post-Purchase Upsell: Offers on the thank you page after purchase completion, like subscription options or related products.
Ralph Burns: “After a purchase is completed offering a relevant upsell and we've talked about this a couple of times here today...”
[37:22]
Real-World Examples and Case Studies
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Amazon: Dominates with bundling and subscription models, contributing to 35% of their total revenue through upsells.
Ralph Burns: “Upselling now is 35% of their total revenue for Amazon.”
[09:40] -
Dollar Shave Club: Effective use of mid-purchase pop-ups offering grooming kits, enhancing the user’s purchase experience.
Lauren E. Petrulo: “Dollar Shave Club used to do this really, really well... upgrade and save 15% to the groom kit.”
[31:26] -
Beauty Industry: Clients successfully implement subscription models and bundle offers to increase NAOV without adding shipping costs.
Lauren E. Petrulo: “...when you can say like hey you don't have to pay extra shipping. Ideally it even hits them to the threshold...”
[37:22]
Key Insights and Best Practices
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Add Value Without Increasing Costs: Focus on providing more value to the customer without significant additional costs to encourage higher spending.
Ralph Burns: “The bottom line is always how do you add value without it costing you more.”
[08:21] -
Limit Options to Avoid Confusion: Present a manageable number of upsell options to prevent overwhelming customers, which can lead to decision paralysis.
Ralph Burns: “...limit the upsell sort of purchases because the confused mind typically will say, no.”
[14:00] -
Test and Optimize Continuously: Regularly A/B test different upsell strategies to identify what works best for your specific audience and products.
Lauren E. Petrulo: “[...] everything is just sort of generalized guidelines. But if you do like one of these, literally, and just focus on that, take the seven things that we've talked about here today and figure out, okay, that one I'm going to do and then just start testing it.”
[40:51] -
Enhance User Experience: Ensure that upsell strategies enhance rather than disrupt the customer journey, maintaining a seamless and positive shopping experience.
Ralph Burns: “...you're selling the look and then they tell you how to do it and you see the transformation...”
[29:54] -
Own the Customer Relationship: Encourage customers to purchase directly through your platform rather than third-party sites like Amazon to retain customer data and foster loyalty.
Lauren E. Petrulo: “But you also own the customer.”
[19:21]
Conclusions and Takeaways
Ralph and Lauren conclude the episode by reiterating the critical role of cross-selling and upselling in driving profitability and sustaining business growth. They emphasize the importance of integrating these strategies into the customer journey thoughtfully and strategically, ensuring that each upsell aligns with enhancing the customer's experience and adding real value.
Ralph Burns: “...figure out where the friction points are... pick one and figure that out and test the hell out of it.”
[42:40]
They also highlight the upcoming Black Friday and Cyber Monday as prime opportunities to implement and test these strategies to maximize sales during peak shopping periods.
Final Remarks
The hosts encourage listeners to apply the discussed strategies to their businesses and to leverage the resources available at Tier 11 for further optimization. They stress the importance of continuous testing and adaptation to refine upsell and cross-sell techniques effectively.
Ralph Burns: “We're going to read those [ratings and reviews] out here on air. Really appreciate that because it gets us to a wider audience and teaches people how to do all this the right way as opposed to the wrong way.”
[43:55]
Resources:
- Tier 11 Website: tier11.com
- Subscribe and Save Calculator: Available at Tier 11 resources
- Unbounce Special Offer: Use code PT10OFF at unbounce.com/pt
Note: This summary excludes advertisements, intros, outros, and non-content segments to focus solely on the valuable discussions and insights shared by the hosts.