A product add-on strategy can be a big win for retailers looking to boost sales. In fact, a study found that product recommendations can represent up to 31% of revenue. With inventory to move, you want to maximize the value from each customer by making relevant recommendations based on their shopping habits. When executed well, the right product add-on strategy can help you maximize that revenue percentage. If done poorly, you may create a negative customer experience.
The secret to a successful strategy is your customers. A customer-first approach in recommendations can give you the insights and direction you need to unlock add-on revenue. Here is what you need to know to build out your strategy.
Product Add-Ons Are Mutually Beneficial
Making product recommendations during the shopping experience has clear benefits for retailers. Product add-ons are a big help for increasing AOV, and can get customers to see more of the product offerings than the one item they came in for.
But quality add-on recommendation offerings can have big advantages for customers as well. Add-on recommendations can do the following:
- Improve the customer experience
- Make it easier for customers to find what they’re looking for
- Help customers feel known by the brand, which increases brand trust
- Give access to any bundling discounts by combining purchased together items
What Is a Customer-First Approach?
A successful customer-first approach means identifying things that are of value to your customers and presenting them as add-ons in ways that are helpful. If you want to provide a better ecommerce customer experience, it all comes down to knowing your customers:
- Learning who your customers are can help you to know what their goals are in their shopping experience.
- Knowing what your customers’ needs are can help you to know what items to suggest.
- Being aware of their customer journey can help you to know where and when to surface recommendations.
Why a Customer-First Approach Is Important
A customer-first approach is the difference between an add-on strategy that has minimal impact and one that greatly increases your revenue. An ineffective strategy will result in a low ROI. Using a customer-first approach can strengthen your offerings to get the most revenue out of each transaction.
When recommendations are automated based on data, sometimes the strategy breaks down if the algorithms are off. If there isn’t enough data available, the recommendations won’t be accurate. Irrelevant recommendations don’t just keep your AOV low, they can also create a negative customer experience. Bad suggestions that interrupt the journey can make customers feel frustrated or annoyed with the recommendations rather than helped. Customers with a negative experience are likely to feel more distance from the brand and less loyalty.
Steps to Create a Customer-First Product Recommendations
In order to create the best product add-on recommendation strategy, you need to make suggestions that are:
What this looks like will be different depending on your industry, customers, and site. To learn how to meet those criteria for your site, here are a few steps to take.
You might not have the level of demographic data on your customer base that you would like, but you can get some good information from co-browse and co-purchase data. This creates a starting point for recommendations.
Think Like a Customer.
Remember that you (and your employees) are also customers. If there are things you find irritating or valuable in your own online shopping experiences, your customers likely will feel the same way on your site. When looking to offer value to your customer, look for things that are helpful, logical, and help complete their shopping experience.
Test and Adjust.
When you have smart recommendations running, you can collect additional information. Continue to collect data and walk through the customer journey. Test different options and make adjustments based on what works.
Review Customer Feedback.
Some of the most helpful information comes from what your customers are saying. Check in regularly on the customer feedback you receive with reviews, comments, or customer service calls. If there are specific questions or problems that come up often, look into add-ons that can address those pain points.
For example, many calls in about manufacturer warranties indicates your customers want product protection add-ons.
Learn to Unlock Revenue from Product Add-ons
Mulberry is hosting a webinar on How to Unlock Revenue from Product Add-Ons on Thursday, Aug 26, 2021. The webinar features expert presentations on ecommerce add-on strategy to help you design and optimize your strategy through 5 tactical tips. The webinar will dig deeper into what it is to take a customer-first approach, why the right recommendations are key to building shopper trust, and how to avoid pitfalls in your strategy. Reserve your webinar spot now