What are upsell & cross-sell rates?
Upsell rate is the percentage of customers who purchased a higher-end product than the one in question, on being encouraged by you.
Cross-sell rate is the percentage of customers who purchased related or complementary products suggested by you.
How to calculate upsell rate & cross-sell rate?
To calculate upsell rate, divide the ‘number of customers who purchased the upsell product’ by the ‘number of times it was offered’ and multiply by 100 to get a percentage.
To calculate cross-sell rate, divide the ‘number of customers who purchased the cross-sell product’ by the ‘number of times it was offered’ and multiply by 100 to get a percentage.
Formula for calculating upsell rate & cross-sell rate
Real-life example of upsell rate & cross-sell rate
You run an e-commerce business and customers purchase your products through your website. You pulled on your upselling strategy by suggesting 500 customers to upgrade to a membership plan in order to get free shipping and fast delivery.
Out of those, 250 customers took your upsell product, that is, they upgraded to a membership plan. So, your upsell rate will be: 250/500 x 100 = 50%
And you carried your cross-selling by, suggesting 200 customers, who were buying a blow dryer to buy a straightener as well.
Out of those, 50 users took your cross-sell product, that is, they purchased both the related items. So now, your cross-sell rate will be: 50/200 x 100 = 25%
What’s considered a good upsell & cross-sell rate? (benchmark)
A company should strive to have 30% of its total revenue coming from expansion (upsell, cross-sell, and renewals)
Take a look at some research stats:
Conversion Rates of Cross-sells / Upsells in the Shopping Cart:
- Less than 1% conversion (8% of retailers)
- 1%-4% conversion (16% of retailers)
- 5%-10% conversion (9% of retailers)
- More than 10% conversion (3% of retailers)
Conversion Rates of Cross-sell / Upsells on Product Pages:
- Less than 1% conversion (5% of retailers)
- 1%-2% conversion (15% of retailers)
- 3%-4% conversion (5% of retailers)
- 5%-7% conversion (6% of retailers)
- 8%-10% conversion (2% of retailers)
- 11%-15% conversion (1% of retailers)
- More than 15% conversion – 2% of retailers
Amazon shared that cross-sells were responsible for 35% of its sales in 2006!
Ways to increase your upsell rate & cross-sell rate
- Tailor your recommendations: Aggressively selling without knowing your customer can rather hurt your conversions. You need to make sure you are upselling and cross-selling for products or services you know your customers are interested in. Read: 9 Upselling Techniques That Work Like a Charm
- Offer them something valuable: While you’re upselling, make sure to offer something value adding and problem solving to your customers otherwise why would someone pay higher for a product.
- Make data-driven suggestions: Analyze your customer’s past interactions and purchases to make data-driven suggestions that match their needs. Read: 10 Ways to Increase Average Order Value
Also Read: Related Metrics
- Net Promoter Score
- Customer Churn Rate
- Customer Lifetime Value
- Customer Retention Rate
- Repeat Purchase Rate
- Customer Satisfaction Score (CSAT)
- Renewal Rate
- Customer Acquisition Cost
- First Contact Resolution Rate (FCR)
- Free Trial Conversion Rate
- Daily Active Users (DAU)
- Monthly Active Users (MAU)
- Average Revenue Per User
- Referral Program ROI
- Viral Coefficient
- Participant Share Rate
- Invitation Conversion Rate
- Net Dollar Retention
- Product Adoption Rate
- Sessions per User