`Upselling' strategies hit the Net

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"We're constantly looking for ways to upsell or cross-sell, and it's a very difficult medium to do that in today," The practice of "upselling," or trying to persuade customers to buy something extra, is a common enough sales tactic in retail and telemarketing, but try doing it on your Web site and you'll likely end up frustrated.

That's about to change.

As early as January, the Web equivalent of "Would you like fries with that?" will be a reality, thanks to the marriage of database management and World Wide Web technologies.

Companies such as Broadvision, Los Altos, Calif., and Evergreen Internet, Chandler, Ariz., are testing commerce software that will enable their clients to present customers with real-time upsell offers.

"All of our commerce sites that are being built today are definitely looking at upselling as a key component," says Sandra Vaughan, senior director of corporate marketing at Broadvision.

Broadvision's One-to-One Application System database software enables companies to develop one-to-one marketing relationships with their clients, and it can be used for targeted Web site development and upselling. The system starts at $60,000.


Evergreen Internet has developed CyberCat 3.0 Intelligent Merchandising software, which will enable marketers to personalize Web sites and do upselling, as well. Evergreen declined to disclose pricing information.

Both companies expect many of their clients to have live sites incorporating their software up in January.

Among Broadvision's clients are US West; NetRadio, which is already using the Broadvision software; and Epsilon, a database marketing consultancy that is also a Broadvision partner.

Evergreen counts among its clients Spiegel, Sharper Image and Big Dog Sportswear. Evergreen expects up to 30 of its clients to go live with personalized commerce Web sites that feature upselling in January.

A lot of companies currently have some upsell component built into their Web sites (after-buy e-mail or telemarketing, for example), but almost none has the capability to make an upsell offer immediately, before the customer leaves the site.

The key to doing this is being able to dynamically generate your Web pages, as opposed to using static HTML pages that don't change.

Dynamic generation allows you to build personalized Web sites for each customer as he visits the site, where the next page he sees is determined by their previous steps through your site, as well as by the historical information stored in the marketer's database.


"The whole concept is not only dynamically generating content for somebody, but then on the fly being able to say, `Well if this person visits this page and buys this thing, give them a 30%-off coupon,' " Ms. Vaughan says.

For example, she said, "If you have a printer in your shopping basket, the next page you go to may very well have a promotional ad or coupon, or it will have an actual picture of what kind of paper options you have or what kind of toner options you have."

That's a tool marketers are anxious to get.

"We're constantly looking for ways to upsell or cross-sell, and it's a very difficult medium to do that in today," says Bill Rollinson, VP-marketing for the Palo Alto, Calif.-based Internet Shopping Network.

A key element in both Broadvision and Evergreen's software is that marketers will be able to dictate the decision process by which the software determines how to structure the upsell offers.

What follows are some tips and caveats to weigh as you consider adding real-time upselling capability to your Web site.

  • You need to profile the people who visit your Web site. You need an incentive strategy for getting people to fill out the profile, and you must let them know that their information is secure.

  • Among the incentives to offer are coupons, gift certificates or an immediate discount off whatever is purchased in that online session.

    However, Annette Marino, Evergreen's manager of product development, says perhaps the most effective incentive is to make sure people know that by filling out the profile, the marketer will be able to tailor its Web site to his individual needs and interests so that he won't be browsing through stuff he doesn't want.

  • Use upselling for inventory management. If you have product building up in your warehouse, you can immediately begin making upsell offers to clear it out.

  • In building the decision rules for your site, you can link your inventory management system with the site, making this process automatic.

    However, Robert Lewis, a consultant for Perot Systems, an InfoWorld columnist and author of "Selling on the Net," says the offer must match your customer's situation and profile.

    "Present this in terms of what your customer wants to hear, not what you want to say," he says. "It's poison to focus on what it is you want to convey."

  • Don't be intrusive. The upsell offer should make sense in terms of both the current purchase and the customer's historical profile. And it should be presented as a solution, rather than a sale.

    "The hard thing is getting this balancing act of when are you too intrusive, because our customers are really intelligent, highly educated," says Mr. Rollinson. "They know that we can do this stuff, so you want to do it in kind of a smart, intelligent way that the customer feels good about."

  • Make sure your customers are ready for this sort of selling. The Internet Shopping Network is incorporating real-time upselling capability into its site, but Mr. Rollinson says it's not for everybody.

    "A lot of this is being driven by the companies, not the customers. That scares me, because [for] most of our customers, their concerns are typically shipping issues, tax issues, price issues, product issues. I think those are the problems you need to attack first," he says.

  • Even the timing has to be tailored to the product and customer.

    "You don't necessarily have to hit them with an offer right away," says Charlie Tarzian, president, Blau/Coyote Technologies, Fairfield, Conn. "Now that they've made that order, you have a historical record of them doing business with you and you can begin the pipeline of communications to them. That doesn't necessarily have to be in real-time."

    E-mail is a key way to keep that communications pipeline going, so ask for customers' e-mail addresses in their profiles.

  • Start thinking beyond upselling only your own products on your own site. Partner with other companies. Share information with them. In the future you'll be able to do real-time add-on sales with those off-site partners.

    "What you're doing, really, at that point, is you're becoming the retailer on the Internet," says Bill Hopkins, analyst for the Gartner Group, Stamford, Conn.

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