E-commerce has changed the way we conduct business and how we buy and sell. It is a very new concept still, to buy something online with digital currency. But in the modern age, driven by technological advancements, we see the e-commerce sector overtaking various aspects traditionally tied to a brick-and-mortar business model. And despite the complexities of the e-commerce business, some sales strategies, namely upselling, haven’t changed much.
Upselling is a sales technique leveraged by the merchant and major retailers for centuries. And it has stood the testament of time and will still remain one of the major sales tactics.
Wondering how to incorporate e-commerce upselling to your business site? Through this guide, we will cover the basics of e-commerce upselling and how can it help you generate sales and boost revenue.
What Is e-commerce Upselling?
Let’s cover the basics first.
Upselling means getting your visitor or customer to spend more money than they had initially planned as they move through the sales funnel and the purchase process.
Now, there are a few ways you can accomplish this. One example would be offering your customer add-ones on the items they are purchasing at the checkout page. So if they are purchasing a new phone, and at the checkout, you can add an extended warranty at a discount when purchasing both as a combo.
At the end of the day, e-commerce upselling is about increasing the average order value. And there are various other benefits of upselling products.
The Benefits Of Upselling Products
According to the statistics of ForEntreprenuer, the average business offering upsells, 70% or more of their revenue is likely to be generated from the upsells.
Additionally, it is easier to sell to existing customers than attract new ones. And it will be easier to upsell to them. Thus, implementing product upsells on your e-commerce site can increase your sales and revenue. Moreover, by upselling to your customer, you are giving them more value and strengthening your relationship with them, which increases your customer lifetime value (CLV).
The Psychology Behind Upselling
Here, we’ll be dwelling on the psychology behind upselling- the motivations behind upselling and how can you work them into your e-commerce marketing and sales strategy.
Upselling provides the customers with ease and convenience when shopping. When you place your upselling strategies as pop-ups, you are showing your customer what more they could be getting without them having to browse more through your site.
Often people would simply like to see what else your business has to offer and don’t necessarily like poking around and looking for that. And here, upselling tactics are optimal to boost sales.
It could be so that sometimes customers might now even know they needed certain products before your recommendation. Through personalization, you can highlight more of your products and increase the opportunities of generating sales.
Furthermore, they are likely to purchase products as an addition if they help them solve their problems. For instance, your customer is planning to get some dog food, and you provide them with the offer of upgrading to a larger pack that actually cheaper per 10 grams and this could be a solution to their potential problem of having to buy dog food over and over again. And here, they’ll feel like they are getting a good deal.
Therefore convenience and real value products will make your customer pay more without a second thought.
Since your upselling tactic meets your customer at the “buying mode” of the sales process, they are more likely to add more items to their cart. Add couple this with creating a FOMO (fear of missing out) i.e. scarcity marketing, you are bound to increase your sales and generate revenue.
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How to upsell: Things to keep in mind
Upselling is definitely an effective strategy, however, if you want results, you have to approach it the right way. Here are some things that you need to keep in mind and use as techniques to make the most out of your upselling strategy.
Keep it subtle!
Be realistic about your upsells. If you go overboard, this sales strategy might have the opposite reaction. Don’t be too pushy.
For instance, when someone is looking to buy a toothbrush, you can offer them a sustainable one or perhaps a combo-pack of them, that would be effective and safe. But don’t pitch them an electric toothbrush, they might not get it as the price difference is bound to be significant.
The point here is to keep your upselling strategy subtle and relevant so that your customers don’t feel they are being swindled out of their money.
Upsell products that already sell well
Upselling products when done right can be time-efficient, if not it can be very time-consuming.
It will take a while to decide which products are relevant and whether the price gap is good enough.
Thus, it is important to upsell products that are already doing well in terms of sales.
You should analyze which products are performing well by checking the metrics and sales numbers. And you could upsell products that have high sales, consistently. Furthermore, you can upsell products based on the time of the year and season, going with the trend.
Don’t overwhelm customers with too many options
Offer your customers the right amount of relevant products. Do not bombard your customers with too many products as it may have a negative effect and put them off purchasing anything until later or never, leading to cart abandonment. Thus, start by offering two or three options.
Upsell in receipts
Most businesses, after sending digital receipts with the shipping details, an itemized invoice, and the thank you note. But if you do not include an upselling strategy in these essentials, you are missing a major opportunity.
Since many customers read their receipts because they are interested in the details of the products that they’ve bought, they will read through your upselling offers and it will convince them to spend more.
Categorize Your Products into Different Tiers
Upselling is a great way to encourage you to upgrade to a higher tier. And to ensure that, you must categorize your product catalog in terms of pricing, size, power, etc.
For instance, if you are selling laptops, you’d want to convince your customer to buy the high-end machine. So you can categorize them as:
- Low-end laptops for students
- Academic/ work laptops
- High-end gaming laptops
- MacBook for Apple lovers
- Touch-screen for that 2-in-1 use.
Higher tier products mean higher prices and higher price purchases mean more profit for you.
Place Your Upsells in The Right Channels
Now that you have which products you want to upsell, you should look into the placement of your upsells and which channels are right for you.
And your success will be dependent upon the placement.
Here are the best places to add your upsell offers:
- On the product page when your customer is looking for a good deal.
- On the cart page when your visitor is about to make a purchase.
- Email sequences where you offer deals and recommend products according to their history.
- Out-of-stock pages where you can save their disappointment and swap it by offering them a more valuable purchase.
Just remember to avoid placing them too early on such as on the homepage or on ads.
Focus on Repeat Customers
It is well-known fact that it is easier to sell to your current customer than to invest time and money in getting new customers and selling to them. And the reason is pretty simple, your new prospective customers may not trust your business enough to spend too much on their first ever order with you.
And on the other hand, your current customers are already aware that your brand is good and they can trust your products. Therefore, they won’t be afraid to shop with you again and spend more money, especially if their past experiences have been more than satisfactory. Which can’t be said about the new potential customers.
Focus your upselling strategies on your recurring customers and send them timely emails and notifications through any of your marketing channels about offers and relevant product recommendations that are irresistible.
Present Your Upsell Effectively
If your products are too expensive, it will be harder to sell them. While your customers might be able to buy your upsell with a single click, many would want to know more about it.
Thus, presenting your offers properly is critical and this will ensure your conversion rates are high. And depending on how expensive your products are, you can do this with a more elaborated product page, a landing page, or even through a sales letter.
There are elements of a profitable upsell, including:
- A copy that persuades the customer to take a purchase action.
- Comparing tables can help your customer identify that your offer is superior.
- Offers or discounts, or scarcity marketing.
- An easy buying process.
- Share pricing differences with other products.
Example of upselling done perfectly right
Being an e-commerce business owner, no one would know your products and your customers like your do. Thus, your upselling strategies and packages that you implement should fit with your business model, the kind of products to sell, and your customer base.
One of the prime examples of upselling done right is the iPhone by Apple. And this is accomplished through 4 tactics:
1. Offer larger sizes
One of the ways they upsell their standard iPhone models is by enticing your customer with an offer of a larger version.
It is a very popular impression that the bigger the item, the more valuable it is. And this impression help makes them justify the extra cost.
They have an iPhone 13 standard version and iPhone 13 Pro. And this is not a tactic that they have started using recently, this is an upselling strategy used by them since the launch of the iPhone 5, the upgraded version being the iPhone SE.
Although it is not just an increased, larger size, it is also increased performance and additional features.
2. Increased performance
They just don’t depend on size for upselling, they try a different approach and that is increased performance. Every e-commerce business owner wants their products to perform better and deliver, you have the chance to upgrade and upsell a better-performing product for some extra cash.
For instance, if the customer wants 4GB RAM, the upsell could be an 8GM RAM in a limited-edition color option at a slightly higher price.
3. Added features
Another tactic is to add features. For instance, a gadget like the iPhone and the upselling versions of it does offer additional features that are not available in the standard versions. Customers will pay a lot more if they feel like they are getting premium features.
For instance, when the former late CEO Steve Jobs launched the iPhone 4S, the first iPhone to have Siri.
When someone is willing to purchase an iPhone 13, then why not offer an iPhone 13 Pro at a slightly higher price with additional features? Interested customers would not mind adding more than $100 when purchasing an already expensive phone. But then you’d have to offer additional features for justifying that cost and upsell.
4. More storage
Another way Apple upsells iPhone is by offering increased data storage.
Especially in today’s day and age, people love extra storage so that they can do more with their devices. More storage for them means they will save more pictures, apps, and music.
And they will be getting more so they won’t mind paying more. They will store more data on their device so paying 10-20% extra will not defer them from purchasing.
Apple doesn’t use this upselling strategy only for their iPhone but across all their devices like MacBook, iPad, and in their recent venture of AirPods.
Resources to assist E-commerce Upselling
Here are some e-commerce upselling tools that are commonly used to improve the average order value on your e-commerce website
- OptinMonster: OptinMonster is a powerful lead generation and conversion optimization tool that allows you to create targeted upsell pop-ups and offers based on customer behavior.
- FOMO: FOMO (Fear of Missing Out) is a social proof marketing platform that displays real-time customer activity notifications, encouraging upsells and increasing conversion rates.
- Nosto: Nosto is a personalization and recommendation engine that uses AI to deliver tailored product recommendations and upsell suggestions to customers.
- CleverTap: CleverTap is a mobile marketing and customer engagement platform that enables personalized push notifications and in-app messages for upselling opportunities.
- Beeketing: Beeketing is an all-in-one marketing platform for e-commerce businesses, offering upsell and cross-sell tools to increase average order value.
- SellUp: SellUp App is a Shopify app that allows you to offer upsell products, discounts, and bundles to customers during the checkout process.
- ReConvert: ReConvert is a Shopify app that creates a post-purchase thank you page for upselling and cross-selling additional products to customers after they make a purchase.
- Bold Upsell: Bold Upsell is a popular upsell app for Shopify that allows you to create personalized upsell offers based on customer behavior, cart contents, and purchase history.
- Zipify OneClickUpsell: Zipify OneClickUpsell enables you to offer one-click upsell and cross-sell offers to customers during the checkout process, increasing conversion rates.
Conclusion
Upselling as a strategy is essential for an e-commerce business and it is simply because it drives recurrent revenue to your business.
Without this recurrent revenue, you’d need to acquire new over and over again which will prove to 5 times harder and 5 times more expensive than reselling and upselling to your current customer.
In this guide, we covered all the basics and essential points you need to remember when implementing upselling in your business model and sales strategy to ensure as your customer goes through the sales funnel, they will spend more than they intended to. Thus, boosting sales and driving revenue for your business.
Remember to keep it simple and only use relevant products, lest you bombard your customers. It can be overwhelming but once you get a hand of it, it is mostly self-running and efficient.
Implement your upselling strategy today and ensure the success of your e-commerce business.