How Can You Use Upselling To Increase Revenue and Build Customer Loyalty

by Waqas Hanif Khan

The definition of an upsell is as simple as enticing a customer to buy more from you. 

You can do this by offering upgrades, additional products that they might like, unique offers that are time-bound or any other additions to their initial purchase that could increase the amount of the final order. 

A simple example of an upsell/cross-sell would be. 

Scenario:

You go to a store to make a buy a shirt. 

An additional item that could be offered to you would be a pair of jeans to go along with that shirt.

Rings a bell? Doesn’t it? 

We have all experienced this. And I would like to admit, it does seem enticing once you imagine the overall attire in your head. 

Another great example of a well set up upselling campaign would be to look at how Amazon does it. 

Why You Should Be Upselling? 

Getting more revenue without having to invest more in marketing, who does not like the sound of that? 

A well thought out sales funnel, set up correctly with right upsells can be very beneficial for you. 

  • Your customers will buy more from you
  • No additional cost is put into marketing 

In fact, there is concrete evidence to prove that with upselling, you can almost double your revenue. 

Let me break this down into numbers that might make sense to you. 

Without Upsell 

  • Total Revenue: $200,425
  • Total Customers: 4,685
  • Avg Customer Value: $42.78

After Adding Upsells into Sales Funnell

  • Revenue from Upsells: $308,190
  • Total Revenue From Funnel: $508,615
  • Avg Customer Value: $108.56

So you see, the addition of upsells in your funnel can be a huge benefit for your overall revenue. 

But this is not the only benefit upselling brings. 

Not only can it help to increase revenue but also act as a customer relationship management tactic that will allow your past customers to be your brand ambassadors. This will not only help increase your revenue without having to invest into new leads but also build a relationship with your existing customers. 

They will feel like they’re a part of your brand. 

How Can You Make Upselling Work Effectively For You? 

Before you go on rattling about what makes an effective upsell strategy. Let’s go over some criteria points that ensure that upselling will work. 

  1. Your upsells not only should be adding more value to the initial purchase but also be a suitable match to the front end product. 
  2. An upsell cannot just be a sales tactic. It has to be used as a customer happiness tactic: the buyer and the seller have to both feel like winners. 
  3. An upsell should not add any nuisance to the buyer’s journey. Just one click and the item gets added
  4. An effective upselling tactic that is proven to work is to personalize the offers for your customers. 

(note: if we could design this infographic according to our brand. It would be great)

Bonus Tip: For upselling to be effective, the timing of your offer and the interest of your customers are the two most important factors that can influence that purchase decision. 

4 Upselling Ideas To Inspire You

Now there are many different ways upsells can be utilized and there is no set way to say which ones would work and which ones won’t because there needs to be testing before coming to one method that works. 

However, I have tried these methods myself and achieved great results from them. 

  1. Offering Premium Services As an Upsell

A great way to upsell to your customers would be to offer them a premium service package which lets them know the additional benefits they will get if they upgrade from their current package. 

Usually, this type of upsell offers are mostly seen on hosting websites that offer additional and advanced services for additional charges. 

 

  1. Customization Options

Another great way to upsell to a customer that is already interesting in buying a product from you is to offer them a customization option. This helps to make the experience of your customers better and makes it more memorable for them. 

Shutterfly has a great way of showing such upsells that offer customization for a slight additional charge. 

  1. Extended Period Of Service 

Another great way to upsell to customers is to offer them a discount if they buy or subscribe to your services for a longer period of time. 

This kind of tactic not only can help to increase the average order value but also helps to extend your customer’s lifetime value and build loyalty. 

  1. Post Purchase Offers

Another tactic that can be used to upsell is to offer a post-purchase offer after they have already bought something from you.

Now there are different ways you can do this. You can either make the offer righter after they have purchased or have an offered time triggered to appear a year after they have used your product. 

As we discussed, the key to getting this right is to put an offer in front of your customers at the right time. 

The Winning Strategy

Now we have gone through the various impacts upsells can have, the value they can bring and how can you use them to your advantage.

But so far we have not come to a discussion on what can be termed as a winning strategy that will work all the time. 

To be very honest, there is none. 

There is no set strategy that will always work because a winning upsell strategy depends on three things. 

  • How well do you know your customers/audience
  • The journey your customers take to make the final purchase
  • What exactly excites your customers 

Upselling can be a great tactic for any business.

When done right, it will not only boost your bottom line, it will also make your customers happier and thus turn them into brand advocates. 

Back to Business Mastery