Everything You Need to Know About Upselling
Online sales are notoriously challenging, but some marketing campaigns may result in easier sales than you think. Acquiring a new customer can cost FIVE TIMES MORE than retaining a current customer. By leveraging this knowledge and a few significant upselling strategies throughout your sales cycle, you kill two birds with one stone – drive more sales revenue and cultivate a deep understanding of your customer’s needs and wants.
What Is Upselling?
Upselling is a way to increase the average order value and total sales. Using upsell, the merchant offers a visitor a higher-priced alternative to the item a visitor had initially planned. At the same time, the shopper needs to be convinced that the proposed option is a more profitable purchase.
Worth noting, the retailer offers the same type of product that the buyer was looking for. “Would you like to supersize your order?” The cashier might have offered when you ordered a meal at a local fast-food restaurant. This is a classic example of upselling – a sales trick used to sell a higher-end version of a product.
Why Is Upselling Important?
In order to effectively implement upsell, you need to evaluate and analyze customer requests and priorities. The upsell method makes sense to apply in online or offline businesses to reduce customer churn and attract first-timers. Set aside time to understand what your customer wants to gain from using your product or service.
So, why do merchants rely heavily on an upselling strategy? There is plenty of reasons:
#1. Upselling establishes trust between your brand and shoppers
Upselling is not just about increasing your revenue. When you focus primarily on the customer’s goals, you add value to shoppers’ experience and relationships. By delivering better solutions for customer problems, you help your customers win and feel like they make a better deal.
#2. Upselling is easier than attracting new customers
It’s going to save you a lot of money! Based on Harvard Business Review, attracting and selling to newcomers costs between 5 to 25 times more than keeping existing customers satisfied. It’s simply easier to retain loyal customers than it is to spend time, energy, and money acquiring new ones.
#3. Upselling helps to increase Customer Lifetime Value (CLV)
Customer Lifetime Value is the net profit contribution a customer makes to your company throughout the relationship. Knowing the CLV helps companies improve marketing campaigns to retain existing customers while maintaining profit margins and attracting first-timers. By delivering personalized recommendations, you get a chance to turn visitors into profitable customers and keep them coming back.
#4. Upselling encourages customers to return in future
Guided by the desire to simplify customers’ shopping experience you are providing that they will come back if they need more of what you are selling. Don’t forget about great customer service along with your upselling efforts to ensure customer satisfaction.
Upselling Best Practices, Tips and Techniques
Attracting new customers is the most difficult task in marketing. There are various techniques and professional secrets that are available to both beginner and advanced sellers. Upselling is one of such secrets that many know about, but not everyone knows how to put into practice.
The advantage of upselling tactic is that you work with existing customers. They have already come to the site, they are ready to purchase. At the same time, upselling sales should be implemented as assistance in making the right decision. Otherwise, it can not only ruin an origin purchase but angry customers and create a sense that you’re trying to sell them something.
Here are a few successful upselling practices! Adhering to these upselling techniques will enhance your chances of gaining additional revenue and establish trust between your brand and customers.
#1. Deliver Your Customers Relevant Offers
According to an Accenture report, consumers have a positive attitude towards personalized recommendations based on past purchases. Meanwhile, irrelevant recommendations cause frustration among customers. If you don’t want to sacrifice your sales and customers’ loyalty, deliver offers with a higher value to shoppers.
#2. Keep a Sensible Price Policy
The cost of upselling products should be no more than 25 percent higher compared with the price of the product chosen by the buyer. Otherwise, the buyer may delay the purchase. There is also a win-win method of returning the buyer to an abandoned shopping cart.
#3. Don’t Be a Pushy Salesperson
Despite consumer’s openness to personalised recommendations, always give them an option to ignore a block or popup with upselling products. Also, take care that you’re not intrusive. Offer no more than 2 or 3 products. An overwhelming choice of options can disappoint your consumers and they abandon your website to make a purchase elsewhere.
There are a ton of opportunities for upselling. It might be a product page (say for complementary and trivial items), the checkout page (if you want to recommend high-margin items), or popup with discount. Everything depends on the type of product you offer.
#5. Use Social Proof
Social proof isn’t new. Based on several studies conducted on the topic that show people are more likely to conform to the group decision. It’s something you see on the top online retail websites. For instance, Lancôme shows you Those Who Viewed This Item Decided to Buy option.
#6. Showcase Products That Already Sell Well
Upselling products can be very time-consuming. Keep in mind that you have to display relevant products with narrow pricing gaps. On the top of that, you should consider your sales statistics to understand which products are worth upselling. You could showcase blocks with upselling products that have had consistently high sales.
#7. Educate Your Customers
List all benefits that customers get from upgrading their purchase. It’s the briefest way to convert your premium offers into sales. Plus, shoppers don’t feel like you are trying to lure out their hard-earned money.
#8. Display Side-By-Side Comparison
Upsell techniques are simple and straightforward and help increase revenue while continuing to build relationships with clients. As we mentioned above, the key is making a clear idea of the needs of customers and make them an offer that they certainly can not refuse. A comparison gives a better idea of what your customers will miss if they don’t take a premium plan.
#9. Make Your Upsell Discounted
Want your customers to buy a higher-priced product? Offer them a time-sensitive discount. Monetary impulses always work best. That’s why shoppers don’t choose the higher plan – it’s too expensive. That doesn’t mean you give it away pro bono but at a reasonable discount. It makes your offers more tempting.
#10. Offer Upselling Products After the Purchase
As a simple alternative to upsells before checkout, you can make the upsell after they’ve made the purchase. So, if a customer adds a serum to the shopping cart, you might show a day cream and other similarly priced items during the checkout process.
Lessons From Samsung’s and Apple’s Upselling Strategies
Bear in mind that no one knows your products and customers better than you. Upselling can be compared with a two-way street: customers gain added value in exchange for their trust. Successful upselling is not about attempts to sell in every way possible. Your goal is to establish reciprocal relationships with customers and encourage long-term customer loyalty.
Samsung and Apple are training manuals on upselling and cross-selling. And we’ve decided to provide a few more upselling examples to inspire you.
(a) Offer Larger Sizes
The size is the easiest way to visualize added value and justify the extra cost. Let’s take a peek at how Samsung incorporates upselling strategies into their e-commerce store! It offers different sizes of TV – the bigger the size, the higher the cost.
(b) Add Premium Features
You can also upsell with added features. Customers will pay a lot more if they feel that they’re getting added features. If someone wants to buy a smartphone, why not offer a Premium Care or ad-free access to Youtube and Youtube music at a slightly higher price? It’s a win-win strategy!
(c) Offer More Storage
Another way to incorporate upsell is through increased data storage. People love keeping data be it static or dynamic content, apps, or e-books. Your customers will have no issue spending an extra 15 percent if it means they can store more information on their gadgets.
E-commerce titans like Apple, Amazon, Lancôme, Samsung have been incorporating upselling strategies over the years, so why aren’t you? We have mentioned several examples of upselling in retail but your upsell opportunities are nearly endless. Ultimately, it’s up to you to experiment with different types of upselling to create a solution that works. By trial and error — as well as analysis — you’ll be able to get a sense of which upselling techniques are perfect for your business.
How To Automate Upselling? Use Shopify Upsell App!
At this moment, you’re probably thinking, “Okay, upselling can maximize my purchase and help me build up healthier relationships with customers. But how to implement it into my online store?”
Fortunately, the Recom.ai Shopify Upsell & Cross-sell app takes care of it for you.
Besides saving you loads of time from having to manually configure blocks, these widgets will offer high precision suggestions that are optimized based on each customer’s unique shopping habits.
In a Nutshell: The Recom.ai Shopify app allows you to showcase additional blocks or popups with cross-sells and upsells located to the below the product description don’t draw attention away from the targeted product. Cross-selling and upselling strategies is much easier than you think. One app helps you to use cross-sell and upsell tactics to their full potential!
👍 CROSS-SELLING WIDGETS
Do you want fries with that? The iconic cross-sell, or so-called “Upsell Bundles”. When customers view products or add them to a shopping cart, they see modules with customers-also-viewed, customers-also-liked, or perfect-partners-for-you variants. Show multiple offers and let them discover new items to select their favorites.
👍 UPSELLING WIDGETS
A true product UPSELL suggestion is a higher-end version of a product than what customers originally wanted to buy. The app allows you to configure specific products that will trigger the upgrade offer. Cross-selling and upselling widgets can be displayed wherever you like, be it a product page, collection page, home page, shopping cart, checkout, or “thank you” page.
👍 Al-DRIVEN Upsells & Cross-sells
The app analyzes which products are trending (often viewed and bought together) and offers items that perfectly complement your customers’ purchases. By a few clicks you’ll be offering smart upsells that your customers want, saving up to 98 percent of your time and increasing your revenue to an additional 60 percent.
Some metrics (the number of Impressions, Clicks, Added to cart, Purchases, and Sales) may help you gain a deeper understanding of customers’ wants, needs, and preferences. Evaluate the effectiveness of recommendations and clear up which recommendations work better and use it to improve your marketing strategy.
Using the Recom.ai Upsell & Cross-sell app, you can increase your store’s average order value and spend less time configuring product recommendations. A fully automated shop assistant compatible with the most popular themes and devices. It boosts conversion and the average customers spend through offering relevant products to clients. You may incorporate cross-selling and upselling recommendations with just a couple of clicks. Additionally, you are free to customize any aspect of your upsell campaigns manually.
Upselling Frequently Asked Questions (FAQs)
Need a quick reminder on upselling? Check out our FAQs! We provide comprehensive replies to the main questions!
What Is Upselling?
Upselling is a marketing trick where you deliver your customers a premium version of the product they have intended to purchase. Examples include offering Protection plans on laptops or extra features on a smartphone. The idea of upselling is to increase the average order value and to provide shoppers options that might better meet their desires.
What Is Customer Lifetime Value (CLV)?
Customer lifetime value (CLV) is a net profit that you get from the customer throughout your relationship. It’s a significant element because a happy customer can lead to additional sales and can also be a source of referrals. Establishing trust between your company and customers, you can get more than a one-time purchase.
What’s the Relation Between Customer Lifetime Value And Upselling?
Upselling increases CLV by adding more value to the customer’s basic product. Offering personalized experiences and relevant recommendationsб you make your customers happy with your product or service. This not only maximizes your revenue, but it also builds a trusting relationship between your brand and customers.
What are the perks of upselling?
As an e-commerce merchant, you’re in business to grow your customer base and increase sales. Using upselling recommendations, your customers gladly increase their cart value and become more loyal to your company. So, you meet your customer’s needs, they spend more, your business grows, and everybody wins!
Wrapping It Up
In our e-commerce era, customers are smart and get a sense when you’re trying to squeeze more out of their wallets.
What is really important is to understand your customers and give them what they want without compromise. That means offering personalized experiences, smart recommendations, and products that truly are worth spending a little extra on. In such a way, you make them happier in the long run and maximize your profit.