Master The skill Of Upselling - The E-Com Hack
E-Commerce upselling is the most effective way to boost your order value while building trust.
But, not all upsells are the same. Your content, offer, time, and location have a significant impact on your upsell - if done correctly, you will enjoy a revenue fill life, but if you don't, you will get the opposite result.
Let's dive a little deeper into the world of upselling and see how to optimize that upsell, so your customers can't resist!
Upselling Vs. Cross-Selling: What’s the Difference?
Just in case you need a refresher between upselling & cross-selling
Upselling is a technique of maximizing order value by getting customers to move to high-end products, usually the upgraded version of what they are already about to purchase.
For example, if you're selling tea leaves online, here's what you would do for upselling vs. cross-selling.
Upselling: Offer the option to upgrade to a larger bag (for a price worth upgrade)
Cross-selling: Offer a product that compliments tea leaves, such as an infuser
A thoughtful execution of upselling an led you to earn 35% of higher revenue. This additional revenue can place your business in a much better place for growth and will increase your ROI.
Three principles to determine the winning upsell offer
Three questions you must ask yourself before you create an upsell offer are;
1.Does the product compliment the item that the customer is purchasing?
Upsell offers only work when they are relevant to the original purchase. While upselling keep one thing in mind that it has to be a better version of what your customer is purchasing.
2.How does this product benefit your customers?
Sometimes the add on products don't benefit your customer. And we all know customers only buy a product that benefits them. What you can do is, look at how your customer is going to use that product, if you have any item that would compliment the product the best, go ahead and bring it up.
3.Are your customers open to spending more?
If your customers have mentioned their budget, then you must respect that and don't try to sell expensive products. Instead, you can offer them a more economical pack.
Why does upselling work so well with existing customers?
Your existing customers are the ones who already like and trust you. So, it’s way easier to convince such customers to buy high-value products as compared to the new customers - ones who never heard of your brand.
If you look at the graph provided by Groove, the left bar shows the probability of selling to a new prospect, whereas the right bar, you can see the likelihood of selling to an existing customer.
According to the marketing matrix - "The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70%."
Upselling Accelerate The Profit Margin
Upselling leverages the initial purchase of customer acquisition costs to accelerate SaaS time to profit with the help of both growth and churn.
According to the Chaotic Flow rule of thumb #8, you can speed up the time to profit when you upsell your customers. But, the only condition is that your cost purchase must be low and distinct from the new customer acquisition process.
Five Upselling Techniques To Implement Today
Here are five techniques to keep in mind to do Upsell in a better way;
1. Encourage your customers for more purchase
2. Sell benefits, not the product
3. Don't get pushy, always entertain your customer with an option to skip the offer
4. Highlight the differences that will give your customer a better idea about the product
5. Show an attractive discount to boost your sales funnel
Upselling Product, Price & Timing
While creating an upsell offer, the three main hurdles most of the eCommerce marketers face - the offer product, pricing, and the best time to display that offer.
Let's start with an offer.
The Upsell Offer Product
As discussed earlier, relevancy is the key to upsell success. This is the phase where you have to educate your customers about the features that are more beneficial for them. And remember your aim to increase your purchase value, not replacing you with your competitors. So, it would help if you gave your customers a valid reason to upgrade their purchase.
Pricing Your Offer
It can get tricky when it comes to pricing your offer. Your customer will look at the overall cost. So, it is advised to offer a discount. Ideally, it would be best if you offered a deal that they can’t refuse (i.e. it’s worth it to upgrade). Positioning your offer at least a 50% discount may be appealing, however, you do have to calculate your cost and net revenue when deciding on this offer.
Upsell At Right Timing
Choosing the right time to upsell your offer is one of the most significant steps. If you try to upsell in the very early stage, it might damage your overall sales funnel. Imagine at the movie ticket counter a person asks you to buy the popcorn before you have purchased a ticket. The same is the case with upselling - most people abandoned their cart just because of early upselling.
So, you must wait until the original purchase is over, and your customer is ready for the improvements, only then pinch them with your upsell offer.
Let's take a look at how successful companies upsell their products;
You can call amazon a master of eCommerce, and according to Amazon, they generate about 35% of revenue through upselling.
When you browse a specific product on Amazon, you will notice an upsell offer is right there. As shown in the image, they provide you with a variety of options.
Dell is upselling when people are all ready to buy from you. It provides different options for extended premium phone support.
Dollar Shave Club
They have placed some restock options on their product pages to remind customers to buy extra razor blades, or moisturizer if they are running low.
When eCommerce stores are challenged to grow their revenue, one of the smartest ways is by upselling. With strategic upsells, you can not only boost your average order value but also build an active community of loyal customers.
The only secret to making an upsell offer successful is value.
What are your thoughts on upselling?
Share in the comments below.