Offermatica's Jamie Roche writes in with five tips to help you avoid cross-selling hazards in your shopping cart.

I learned how to cross-sell as a high school student during Spring Break. I worked for a telemarketing company that sold glider rides over the phone. No kidding. The owner would walk around with a stack of twenties. If you successfully talked a prospect into photos with his ride, he would peel off a bill and slap it down on your desk.

Online retailers, too, can make cross-selling work… but it's not as easy as it sounds, and it can backfire.

Cross-selling is one of the most useful tools in a retailer's toolbox when it comes to increasing average order value. So it would seem that, for online retailers wishing to increase the amount their customers spend, cross-selling at the shopping cart is an obvious answer: it's the one place through which every person that makes a purchase must pass.

But, as with many things online, the obvious answer is not necessarily the best. In fact, we have found that cross-selling in the shopping cart can actually decrease average order value -- to such an extent that even the customers who do add extra products to their carts may not make up the loss.

For example: in one series of tests we ran for fabric and crafts site Joann.com, every recipe we tried that included cross-sells underperformed those with no cross-sells -- at least at first. We almost came to the conclusion that cross-selling on the cart was bound to lower online conversions.

A person buying online, we figured, is too easily distracted. Some surely noticed the cross-sell and may have even been interested, but we found that once they clicked on it, we were likely to lose them. The phone rang, the baby started crying -- something like that -- and it was all over.

Still, we knew that sites like Amazon and REI used cross-selling on their carts. So either we had either learned something nobody else knew, or there was a way to make it work and we just hadn't discovered it yet. We decided to run more tests.

Ultimately, we found the key to the castle. Our cross-sells became successful, and we helped Joann.com increase average order value by four percent.

How did we do it? Here are five tips based on what we learned:

Tip #1: Choose products that can be added directly to the cart (no links to another page).

Because we consistently lost shoppers when they clicked on the cross-sell product, we tried choosing products that could be added to the cart more easily. We made sure to include a direct "add to cart" button. Shoppers either added it or they didn't -- there was no middle ground.

That meant that the suggested cross-sell needed to have three things in common:

• A single or dominant SKU. It shouldn’t be a product that comes in a seven- or nine-inch model, or in five different colors.
• • Familiarity. The cross-sell should be something everyone is familiar with, that doesn't need too much explanation -- a pair of scissors, for example.
• A high "look-to-book" ratio. Check out the number of shoppers who see the product versus the number of shoppers who buy it. You want products that have at least a 10 to 15 percent ratio of shopper to buyer.

Tip #2: Play around with the price point.

This is one area that we found to match our intuition. To offer cross-sell suggestions successfully, the product should have a price point that makes sense to a shopper. If your average order value is $50, you don't want to offer a product that's $100.

On the other hand, you don't want to offer a $2 product, because you'll need to sell a lot of those in order to make the process worthwhile.

Tip #3: Larger image, longer text.

We felt that, because we were no longer taking shoppers to a second page with additional information, it might help to have lengthier information available right on the cross-sell page.

And we were right: longer text and a larger image helped improve conversions.

Tip #4: Products shouldn't necessarily relate to what's already in the cart.

Intuitively, you might believe that cross-sells relating to the products already in the cart would improve conversions more than unrelated products.

Instead, we found that offering a product from the quilting category to someone purchasing quilting materials, for example, didn't work.

Products that worked best appealed to the impulsive nature of shoppers -- sort of like the products offered at the checkout counter at your favorite bed-and-bath store.

There were some categories where picking items that related to the category worked a little bit better, and some categories where it did not. Our conclusion was that in this case a broadly interesting impulse buy was the best strategy.

Tip #5: Ongoing adventures in cross-selling.

Now that the general rules for cart cross-sells have been established, the Joann.com merchandising team can constantly run champion/challenger tests where new ideas are tested against the winners. The testing process has become an ongoing merchandising process.

Cross-selling on the shopping cart is a great place to start, since all of your customers, and many promising prospects, pass through the cart. Once you, like Joann.com, have found real financial value through cross-selling on your shopping cart, you can move on to other pages that are seen by the bulk of your traffic.

One last thing to keep in mind: When you're testing elements like this that could potentially hurt conversions, it's more important than ever to keep a close eye on your results.

I like to think of it as a process reminiscent of day-trading. If a test is working, keep it going. If it's hurting, get rid of it. Just roll up your sleeves, dive back in, and see what else you can make happen.
 
Jamie Roche is a founder and president of Offermatica. Roche brings to Offermatica the experience of leading a visionary technology company from the dawn of the commercial Internet, through the bubble burst and out again. Offermatica, formerly Fort Point Partners, Inc. is an eight-year-old software company that provides hosted testing and optimization services to some of the largest retailers in the industry including Restoration Hardware and Joann.com.

Prior to Fort Point Partners, Roche ran Webfactory, a provider of Internet products and services to Yahoo, Netscape and other leading Internet companies at their formation. Roche also worked for KPMG Peat Marwick and SiliconGraphics. He is a graduate of Yale University.