Upselling is the subtle art of convincing customers “they deserve better”. It could be a better phone, a nicer dress, or a shinier necklace.
Better products equate to customers paying more. According to a study, product recommendations like upselling can increase revenue by 10-30%.
You can up-sell any product.
The challenge is knowing when to upsell and who to upsell to.
Investpcro conducted a study suggesting that eCommerce stores have a 60-70% chance of selling to existing customers. Meanwhile, the chances of selling to new customers are only 5-20%.
Now that we know our target audience, let’s dive into the core concepts of upselling.
Upselling is among the most effective eCommerce and Shopify marketing tools. Customers get to see the best products shops have to offer before or after a purchase.
An upsell item provides more value, has better features, and has a higher-quality build. Let’s use a waffle maker as an example.
A customer wants to buy a waffle maker worth $30. It can make two waffles at a time. You can offer them a bigger version for $50 that can make 4 waffles and has a dark non-stick metal.
The price is more expensive, but the added features are worth the extra cost.
Another similar strategy to up-selling is cross-selling. Both use personalized product recommendations but there are key differences.
Cross-selling offers customers an add-on to their purchase. Let’s use the same waffle maker as an example. You can recommend a waffle mix to the customer who bought the product. It makes perfect sense to cross-sell since there's a high chance the customer was already going to purchase one afterward.
Having these types of recommendations before or after checkout offers convenience. Customers don’t have to look far for things they were already about to buy. They could also pick up items they didn’t know they needed.
In a nutshell, cross-selling recommends products that complement a customer’s original purchase. Upselling offers customers an upgraded version of what they want to buy.
We've established the differences between up-selling from cross-selling, let’s take a look at why it’s essential for eCommerce.
Both upselling and cross-selling increase your customer's average order value (AOV). Instead of customers paying $30 for every purchase, upselling offers a greater value product and increases it to $50.
It’s a win-win situation for both buyers and sellers. Ecommerce store owners gain more revenue while customers get better buying decisions.
But upselling doesn’t only have monetary advantages. Here are some of the key benefits it has in eCommerce:
Another key moment is during customer product searches.
There are clear benefits to upselling. However, customers still need to purchase the item you upsell to them in order to increase revenue. Here’s a step-by-step guide on how to do so:
The landscape of eCommerce has a lot of advantages and disadvantages. This is also true with upselling.
Customers need to see your upsold products. But it should never be done in a way that’s going to annoy them.
There’s a thin line between irritating a customer and convincing them of purchasing a product. The key thing to look out for is finding the right moment to upsell products.
Some stores hide the upsell product information so only interested buyers would look for it. Another alternative is revealing the upsell only after the customer has opted to buy (but before they checkout).
Some stores hide the upsell info well down so that only serious shoppers ever see it.
Upselling needs to be personalized for it to be effective. If your customer is browsing for waffle makers, don’t upsell clothes. Everything you up-sell should be relevant to the products your customer is already looking for.
A good way to look at upselling is that you’re not just selling a more expensive version of a product. Instead, you’re selling the added benefits and features that the product provides.
Serious shoppers take time in doing research and comparisons between several products. Do it for them and make their purchasing journey more convenient.
Don't limit your customers' exposure by only displaying one product. Avoid making clients browse through numerous pages by highlighting upsell goods that are similar but differ primarily in key features.
Always include price comparisons and availability of products as well.
All major eCommerce stores provide suggested products. Stores propose products based on what customers search for.
To catch a customer’s eye, stores optimize eCommerce headlines for sales. Make your copy stand out right from the start to incentives them into going deeper into the product info. For example, some stores have dedicated sections to reveal similar products.
In voice and text, audiences prefer to assimilate information and find things in three more effective, funny, or fulfilling.
This works in upselling. People follow patterns. Plain and simple. You can use this rule when presenting products you want to upsell.
A store can highlight the top 3 products within a similar price range. From there, you can give the customer the option to compare features right off the bat.
Customers that have researched their options and are sure of what they want to buy may not be persuaded by the typical upselling tactics.
To counter this, though, you can use a few extra accessories. In addition to the main product you're selling online, you may also provide:
Referral programs offer several benefits for both buyers and sellers. Referrals offer customers incentives for every person successful one.
They receive rewards, in-store points, discount vouchers, and more. At the same time, business owners get new leads and potential long-term customers.
Upselling can increase revenue by offering better, more expensive products. But if the products’ pricing is too far apart, customers are likely to opt out of the upgraded purchase.
Research suggests that 25% is a sweet spot for a product’s upsell price. You can definitely go as high as 40% but the cost should always be justified. Use A/B testing on this to find the sweet spot for your specific niche/industry.
Personalization increases brand loyalty and conversion rates and improves the effectiveness of suggestions. This is best done through the help of customer relationship management tools and automation.
Here are three best practices to follow when personalizing upsells:
Upselling isn’t limited to the products it displays for customers in eCommerce stores. You can also use follow-up emails during post-purchase marketing campaigns.
Follow-up emails are a great way to offer an upsell to customers who didn't buy it the first time around. To seal the transaction, make the offer even more attractive.
Add some of the methods discussed earlier such as including add-ons. Make the upsell more appealing with product comparisons and suggest alternatives as well.
Because upselling is targeted more toward existing customers, businesses don’t have to invest more resources into lead generation. This promotes a sustainable and cost-effective strategy for increasing revenue.
So, here are some things to consider about before committing to up-selling: