Why You Should Be Upselling

What is Upselling?

Upselling is a sales strategy businesses use to encourage customers to upgrade and purchase a more expensive version of their chosen product, or to include add-ons with their order. Upselling happens during the customer's buying journey when they've added a product to their cart. It can also be used on product pages or pricing pages too.

Cross selling is encouraging the customer to buy not only the ones in their cart, but additional products too. 

While one outcome of upselling is to make a larger profit and customer lifetime value, others include the ability to improve customer relationships, deliver more value to the customer, and improve the customer's experience with your business.

What are the Benefits of Upselling?

The benefits of upselling include:

  • grow customer lifetime value - upselling will bring in additional profit from the customer
  • increase average transaction value - as upselling is selling the same product type but a more expensive one, you increase the average transaction amount
  • boost sales from existing customers - you already have a customer who wants to buy a product. Upselling encourages them to spend more.
  • give exceptional customer support - studies have shown that customers like being given additional offerings and view so as great customer support
  • solve customer problems and pain points effectively - you are offering them a solution to their need with your product offerings
  • analytics for decision making - you can receive more data about the types of products your customers are wanting
  • increase customer loyalty and trust - upselling offers your customers the types of products they are wanting, therefore increasing customer satisfaction, which grows brand loyalty, trust and rapport

Upselling Techniques to Use

The upselling techniques you choose to use will reflect upon the success you will have. Customers are more likely to respond positively to your upselling when you:

  • offer them a relevant upsell - by knowing your customer, you can offer them the most suitable upsell rather than just any upsell product. An example is, the customer wants a mouse pad, and you upsell them a mouse pad with a padded wrist area and not a cordless mouse.
  • provide ongoing value - don't just forget about your customer after the sale. Be in touch with them to ask for a review and to check on how they are liking the product
  • keep within a realistic price margin - a $50 product customer is not going to easily agree to purchase one double that amount. Stick to around a 50% price margin of the customer's original purchase
  • offer multiple options - providing just one upsell product doesn't give the customer any choices. Try to upsell multiple different products on the product page, and then you could cross sell on the cart page
  • explain clearly why the customer should buy this product - you need to be direct and give as many details and/or reasons as possible as to why the more expensive product is better
  • create a feeling of urgency or FOMO - if people think they are at risk of missing out, they will be encouraged further to make a purchase
  • offer a discount - show the more expensive products, but at a discounted rate to encourage purchasing

Where to Next for Your Marketing?

Tags: ecommerce  marketing  

Posted: Friday 12 January 2024