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This is an in-depth guide to upselling.
In this guide you’re going to find out:
- What is upselling?
- What’s the difference between upselling and cross-selling?
- How to use upselling effectively?
- How to create effective upsells?
- Upselling examples.
- And so much more.
So, let’s get right into it.
- What Is Upselling?
- Upselling vs Cross-Selling: What’s the Difference?
- How to Create Effective Product Upsells
- What And How Should You Upsell?
- Upselling Techniques: How to Upsell The Right Way?
- Upselling Pros & Cons
- What Are the Benefits of Upselling?
- What Are the Drawbacks of Upselling?
- Great Upselling Examples
- What Are the Best Practices of Upselling?
What Is Upselling?
Upselling is a sales technique that encourages the customer to buy more expensive items, upgrades, or other add-ons of a product than what they originally intended to purchase. The main purpose of upselling is to increase the average sales value of a customer.
The technique involves marketing more profitable services or products that were perhaps not considered.
Upselling is one of the most popular selling strategies used in the digital marketing world today.
This can be attributed to the fact that it is a very effective strategy.
If you’re not yet upselling to customers, you are missing out on generating more revenue for your business.
This technique is excellent at turning existing shoppers into profitable customers who keep coming back for more goods and services.
In this article, we’ll take an in-depth look at upselling, its benefits, drawbacks, examples, how to upsell, and the best strategies you can incorporate in your business or marketing.
Let’s jump right in!
What Does Upselling Mean?
There are two ways of generating more sales; to acquire new customers or sell more to existing customers.
Selling to current customers is cheaper because it doesn’t require much time and money on marketing and advertising.
This is where upselling falls in.
What Is Upselling: Definition
Upselling is a sales strategy where a seller persuades a customer to purchase a more expensive, premium, or upgraded version of the chosen item.
For example, a phone dealer can convince a customer buying an iPhone 11 to purchase the more expensive iPhone 11 Pro.
An upsell takes place when a customer is ready to make a purchase.
In eCommerce, upselling happens before or after the checkout process.
It works by tapping into the psychology of a customer.
Once your customer reaches the checkout process, they have already entered the buying mode and settled on a product to fulfill a particular need.
At this point, customers are open to purchasing an alternative product or service even if it is highly priced as long as it adds value and fixes their pain point.
The customer’s willingness to opt for your offer opens up a window to a very easy upsell.
What Is One-Click Upsell?
When it comes to upselling it is very common to come across a name like one-click upselling.
One-click upsells, also known as post-purchase upsells, happen after the checkout process.
The upsell is presented after a customer adds products to the cart, enters their payment details, and is ready to order.
A customer can add go ahead and add the upsell to their initial order without re-submitting their payment details.
One-click upsells are more effective because they are perfectly timed and placed more strategically.
It allows you to make an additional offer before your customer leaves the checkout page. All your customer has to do is consider your offer and click one button to purchase your upsell.
What Is the Main Purpose of Upselling?
The main aim of upselling is to increase the average order value.
It is a perfect win-win situation.
A customer walks away with a more valuable purchase and a better version of a product or service.
And a seller increases the value of a sale and ultimately generates more revenue.
Upselling vs Cross-Selling: What’s the Difference?
Upselling is often confused or used interchangeably with cross-selling.
Upselling is a sales strategy that tries to motivate customers to purchase a higher-end product, an upgrade, or an additional item in order to make a more profitable sale. Meanwhile, cross-selling is a sales technique that suggests buying additional products for sale.
If a customer is suggested to buy a better (or newer) version of the same product – that’s upselling.
Meanwhile, if it is suggested to buy another product (for example, a drink and french fries for those who buy a burger) for an attractive price – that’s cross-selling.
In this article, you can learn more about the differences between upselling and cross-selling.
How to Create Effective Product Upsells
To create an effective product upsells you just need to follow these 4 simple steps:
- Get an upsell tool
- Determine the best products to upsell
- Create your upsell
- Start selling
Let’s dive in.
Step #1: Get an Upsell Tool
The first step would be to choose the right tool to create your upsell.
This tool should be affordable and fully meet all your needs.
Here is a list of the best and most suitable sales funnel-building tools to choose from.
|Sales Funnel Software||Description||Rating||Price||Website URL|
My Systeme.io Review
|$0.00-$97.00/month||Get the Tool >>|
My ClickFunnels Review
|$97.00-$297.00/month||Get the Tool >>|
My Kartra Review
|$99.00-$499.00/month||Get the Tool >>|
My Builderall Review
|$16.90-$87.90/month||Get the Tool >>|
My Groove.cm Review
|$0.00-$299.00/month||Get the Tool >>|
Step #2: Determine the Best Products to Upsell
Now, you’re probably wondering… What should you upsell?
Well, it depends on the product you’re selling.
Here are some ideas about what you can do:
- Offer more something. Offer buyers a larger product size, a larger quantity, or just a better version of it.
- Create a buy one, get one for a discount offer. Offer an attractive discount on a second product of the same type.
- Feature “him and her” products. For example, if you’re selling a t-shirt offer to get the same one (or similar) for the husband or wife.
Step #3: Create Your Upsell
Once you choose a sales funnel-building tool, it’s time to start building your upsell.
In most cases, you can choose from many ready-made templates and customize them to your needs.
However, in some cases, you can try to build everything from scratch.
Sales funnel building tools have pretty good development of this technology, so the whole process shouldn’t be very complicated.
And that should allow you to build your upsell very quickly.
Step #4: Start Selling
Once your upsell is created and ready, you can start sending it to your audience.
Start testing easily and see how your audience responds to this upsell.
At this stage, you can even use the A / B testing tool and test several different options.
What And How Should You Upsell?
Successful upselling involves presenting a compelling offer customers can’t say no to.
The key to upselling is thinking from a customer’s point of view.
Here are guidelines on how and what to upsell.
1. Make The Upsell Relevant to The Original Purchase
Your upsell pitches should be relevant to what the customer was initially willing to purchase.
It should aim at improving your product or service.
For example, your upsell can be premium support or an annual subscription plan if you sell software.
Your upsell can be a version upgrade, product protection, customization option, warranty, extended service period, or a bundle.
2. Offer Free Shipping
9 out of 10 shoppers admit that free shipping is the number one incentive why they shop online.
Offering free shipping on your upsell serves as a gentle reminder to your customers about how much they don’t have to spend on shipping.
This is a great motivator for them to add things to the cart.
If you’re offering an upgraded version of a product, it will sound reasonable for them to incur an extra cost of the actual product than pay for shipping.
3. Offer Substitutes
You don’t have to limit your upsell to one particular product or service.
In case your usual upsell product is out of stock, feel free to replace it with something relatively similar or a different model but from the same manufacturer.
For example, if your upsell is noise cancellation headphones, but they’re out of stock, suggest clearer sound headphones from the same manufacturer.
4. Bank on The Rule of Three
In marketing, customers respond to patterns better.
The rule of three in marketing works best for products or services with pricing options, i.e., software.
Your upsell will look more attractive with three pricing options.
If you combine this with educating customers on your upsell, you’ll see an increase in the Average Order Value.
5. Provide Social Proof
Social proof lets your customers know that other clients also found the upsell product or service valuable.
Proof can be in the form of reviews or rankings.
This increases the success rate of your upsell offer.
Upselling Techniques: How to Upsell The Right Way?
When it comes to upselling the right way, you have to consider the products you sell and customer interaction.
You can also use your personal experience with the products and services to determine which one pairs well.
This will help you come up with an upsell that makes more sense to your customers.
After that, determine whether presenting it as an upsell will benefit a customer’s experience.
If it doesn’t add value to your customer, you can turn it into a cross-sell, down-sell, or bundled offer.
Thirdly, timing is very crucial in upselling.
You can position your offer as a pre-sale or a post-sale.
A pre-sale comes before the checkout page, while a post-sale pops-up right before a customer completes an order.
Also, ensure that it doesn’t disrupt or frustrate a customer from their initial order.
Unnecessary frustrations can push a customer to opt out of the buying process.
However, the best timing is before they are right before the conversion process.
Allow customers to add the upsell item to the cart before completing the checkout process or signing up.
Also, always get the language right.
Language is vital in any sales or marketing process.
To convince your customer to make an upsell, you have to sound very persuasive.
The language used should be straightforward and simple to understand.
In other words, don’t use so many technical terms that will make your upsell sound complicated.
Lastly, personalize your upsell recommendations.
According to Accenture research, 75% of consumers are likely to purchase if a seller recognizes them by name, offers recommendations based on purchases, and knows their buying history.
When upselling higher-cost items or add-ons to customers for goods and services it is advised not to push the sale as it may become unethical.
There are a number of examples where this has even had legal consequences, as sellers have used the wrong phrases or simply have not said everything about the products they are selling.
So never hide anything with this technique and be completely open about your products and services.
Upselling Pros & Cons
What Are the Benefits of Upselling?
Upselling has several benefits for both buyers and sellers.
- It increases the customer lifetime value
- It increases customer retention rates
- It adds more value to your customers
- It helps in forming deeper relationships with customers
- It optimizes the value of a sale
1. It Increases Customer Lifetime Value
Customer lifetime value is the expected net revenue a business will earn from a customer over their business relationship.
Upselling banks on initial rapport built with your client and discovered customers’ needs to increase an order’s value.
This helps to turn shoppers into profitable long-term customers.
2. It Increases Customer Retention Rates
If customers buy an upsell item and they like it, it will increase their trust and loyalty to your brand.
This is a way of increasing customer retention.
Customer retention statistics indicate that a 5% increase in customer retention will boost your profit by 25% to 95%.
3. It Adds Value To Customers
An upsell adds value to your customers’ orders.
Upsells might help your customers to walk away with a better version or an upgrade from what they initially intended to purchase.
Also, it offers customers unparalleled convenience.
Customers can easily access various products without going back to the product/service page and repeat the whole buying process.
4. It Helps in Forming Deeper Relationships With Customers
A successful upsell makes a customer feel that a business truly understands their needs.
It creates a personalized experience.
If an upsell adds value to a client, they will be confident that they secured a good deal and even return for more.
A personalized experience is vital in forming a more in-depth business-consumers relationship and boosting revenue.
5. It Optimizes The Value of a Sale
When done correctly, an upsell increases the value of a sale.
According to our data, the probability of selling to an existing customer is 60%-70% higher compared to selling to new customers.
Since an upsell opens the window to customer retention, it optimizes the value of one sale by turning a one-time buyer into an existing customer.
What Are the Drawbacks of Upselling?
Even though upselling can increase revenue, it has some drawbacks:
- It is often viewed as pushy
- Sometimes it can be unnecessary
1. Often Viewed as Pushy
Not all customers are pleased with upsells.
This tactic involves walking the thin line between helping and pushing. When done correctly at the perfect time, upselling is highly beneficial to customers and improves their shopping experience.
But, if conducted aggressively, it comes off as pushy and repels a customer.
2. Can be Unnecessary
An upsell is only necessary if it adds value to a customer’s order and revenue to a business.
Upselling can be unnecessary if the upsold product doesn’t add any value to the sale.
Also, upselling to a customer who doesn’t need or will not benefit from the upgrade is deemed unnecessary.
Great Upselling Examples
Let’s look at 3 examples of successful brands that employ upselling in their marketing tactics.
2. Away Travel
Away Travel is a storefront luggage and travel accessories site.
The company upsells on its product pages by posing the question “want an even more flexible and roomy carry-on?”
This points them in the direction of more expensive suitcases.
Additionally, they compare the product side by side to a more significant case to compare the size and promote the bigger case.
3. InterContinental Hotel
InterContinental Hotel is a multinational hospitality company.
They start with the number of beds on their reservation page and aim to upsell clients to a suite.
Even after choosing the suite, there is still an option to increase the price by offering flexibility at a higher price.
This is a brilliant way to upsell.
What Are the Best Practices of Upselling?
Best upselling practices are based on understanding customers’ needs and improving their shopping experience by adding value to their purchases.
Here are some of the best upselling techniques to implement:
- Side by side comparison of an alternative. It involves comparing two products to demonstrate the specifications and value of the high-end version. Spotify uses this strategy to differentiate between its free and premium versions.
- Present an alternative within a reasonable price range. An upsell product or service should be slightly more expensive than the initial expense. Ensure the upsell isn’t higher than 25% of what they were initially willing to spend.
- Subtly mention your upsell product or service. Don’t be pushy or aggressive. Also, if possible, display different alternatives to give your customers room to make up their minds. Choose alternatives with the best ranking.
- Use customer data and tracking tools to analyze customers’ previous searches and personalize your upsell offer. This will help you suggest add-ons that genuinely add value to your client.
- Create a sense of urgency. Add scarcity to your offer, i.e., real-time updates or reminders that your offer will be available for a limited time. This spikes the gear of missing out and prompts your customer to take immediate action.
- Offer as much information as possible about the upsell product. Educate your customers on the value of the offer and the risk of a missed opportunity.
- Show a popular option. Most customers have a ‘group’ mentality. Displaying another option that other clients most prefer increases the chances of a successful upsell.
- Wikimedia Foundation. (2021, December 28). Upselling. Wikipedia. Retrieved May 10, 2022, from https://en.wikipedia.org/wiki/Upselling
- Wikimedia Foundation. (2022, February 22). Cross-selling. Wikipedia. Retrieved May 10, 2022, from https://en.wikipedia.org/wiki/Cross-selling
- Merriam-Webster. (n.d.). Upsell definition & meaning. Merriam-Webster. Retrieved May 10, 2022, from https://www.merriam-webster.com/dictionary/upsell
- What is upselling? Salesforce.com. (n.d.). Retrieved May 10, 2022, from https://www.salesforce.com/eu/learning-centre/sales/upselling/
- Markus, J. (n.d.). What is upselling? – learn why is upselling so important: Read more. Oberlo. Retrieved May 10, 2022, from https://www.oberlo.com/ecommerce-wiki/upselling
- Aydin, G., & Ziya, S. (2008). Pricing promotional products under upselling. Manufacturing & Service Operations Management, 10(3), 360–376. https://doi.org/10.1287/msom.1070.0187
- Aydin, Goker, and Serhan Ziya. Upselling a promotional product using customer purchase information. Working paper, 2006.