Are you avoiding upselling because you’re afraid you’ll annoy your customers? Or maybe you’ve heard the term, but you don’t really understand what it is or how to do it.
Done properly, upselling is just another way to make the customer journey more convenient, reduce the percentage of abandoned carts, and increase your sales revenue. But you need to get to know your customers’ needs in-depth, and use the right apps, for your upsell strategy to work.
Here’s your comprehensive guide to successful upselling—with examples, best practices, and detailed steps to get you started.
Retain customers and increase revenue with Route package tracking and automatic product recommendations.
What is upselling?
Upselling is a sales technique that invites your customers to spend more by offering them a more expensive product or service than the one they were planning to buy. This sales strategy should invite you to find win-win scenarios to offer your customers.
Ecommerce upselling examples
Brands upsell to customers online all the time. In fact, upselling can increase your bottom line and reduce new customer acquisition costs (CAC). If you plan to incorporate this selling technique into your business, use these examples as inspiration.
Increase the size of your product
The Godfather would’ve called this upselling example “an offer you can’t refuse.” It’s a common practice in online grocery stores, where you can invite your customers to enlarge the size of a product for a small price. For example, if a customer adds a one-pound coffee bag to their cart, you can invite them to purchase a bigger one (2 lbs) for a few extra dollars.
Enlarge your order
Upselling electronics is also a common example. Many online electronics retailers offer add-ons to get you to upgrade the product you’re looking to buy.
For instance, if a customer adds a Samsung 55” 4K Tv to their cart, you could offer a TCL 65″ TV for a small additional cost. Since TCL is the least expensive brand, you might have a good deal to offer your customer and upsell this product.
Upselling vs. cross-selling: What’s the difference?
Upselling and cross-selling are both sales strategies that help you reduce your inventory cycle time and increase sales revenue.
The difference between these two selling techniques is that cross-selling offers a complementary, additional product to the one your client is already buying, e.g. offering a charger for the phone they’ve just purchased. Upselling, on the other hand, implies upgrading the product they’re thinking about buying, e.g. selling a 128GB iPhone instead of the 64GB one.
How important is upselling in ecommerce?
It’s extremely important to implement upselling tactics in ecommerce as it’s easier to convert customers who are already on the brink of making a sale than it is to find new customers.
But upselling doesn’t only increase your bottom line. Here are some more benefits of upselling:
- It builds stronger brand-customer relationships when you offer good deals on high-value products.
- It helps you increase key ecommerce metrics like average order value (AOV), customer lifetime value (CLV), and average revenue per customer (ARPC)
- It can positively impact the customer experience by making it more convenient and reducing the barriers to spending more per order.
When to (and when not to) focus on upselling
You can upsell at different stages of the buyer’s journey: before, during, and after purchase. As a general rule, you should never overwhelm your customers with ads and promotions because it might cause them to leave your page.
Here are some other best practices to follow at each stage of the process.
If you want to upsell before your customer adds anything to the cart, here are some ways to do it:
- Add a sidebar with upselling suggestions when they’re searching for a product.
- Offer benefits and incentives like free shipping, an extended warranty, or discounts if they spend a certain amount of money.
Populate a comparison chart with similar more expensive products.
As soon as your customer adds something to your cart, you can start using these upselling strategies:
- Create pop-ups or sidebar notifications with side-by-side product recommendations.
- Add in-cart banners offering similar upgraded products or better deals.
- Offer free shipping and discounts as a threshold.
- Generate FOMO by showing customers a limited time to purchase or your stock levels in real-time, e.g., only 5 items left in stock.
- Use email marketing to remind customers of their abandoned cart and make interesting offers for similar new products.
You can upsell after your customer has already bought a product by using order information to upsell them a similar, improved product in the future.
Waiting to upsell after purchase is a good technique to use if you sell premium products because of the need to earn a customer’s trust first. For example, in the case of premium skin care products, customers may want to try out smaller sizes first to see if they don’t cause any allergic reactions before investing in a larger package.
How to implement an upselling strategy for your ecommerce business
If you’re planning to implement an upselling strategy for your business that helps you retain your customers, increase your AOV, and add value, you should:
1. Find an upsell app
There are different upsell apps that integrate with ecommerce websites and bring this sales technique to life. These apps let you create an upsell funnel and make custom offers to customers through pop-ups, add-ons, or sidebars. Take a look at these apps:
- Bold Checkout. This platform offers upselling and cross-selling functionalities for your online shop. You can use it with Shopify, WooCommerce, BigCommerce, and commerce tools. Bold Checkout lets you customize your checkout experience, run A/B tests, and offer discount codes.
- Rebuy. Use Rebuy to customize your checkout page and upsell. Offer discounts and product recommendations, and promote old inventory. This software works with Shopify Plus and lets you include add-ons to your store. This helps avoid abandoned shopping carts and boost ecommerce sales.
- ReConvert. This tool was designed for upselling and cross-selling on your web store. They promise a 15% revenue increase coming from upsells. With ReConvert you can create customized ‘thank-you’ pages, add pop-ups with a timer, use a reorder button, and show product recommendations.
- Route. We’re not a dedicated upselling app, but you can use our post-purchase platform to share post-purchase recommendations with your customers through email and in-app shipping notifications.
2. Focus on returning customers
When you upsell to your customers, they can either believe it was a great recommendation or a complete waste of money. For example, let’s say a customer is planning to buy a plain white, 100% cotton t-shirt, and you upsell them a dry-fit white t-shirt for a higher price (15% more).
If they like the fit and the fabric of the t-shirt, they might use it and buy it again from you. If they get it and it’s smaller than expected, itchy, or shrinks after the first wash, they might not repeat. So, their post-purchase evaluation of your brand will be unsatisfactory.
To effectively upsell a premium version of a product, you should completely understand the customer’s barriers, needs, and interests. That way, you can upsell products that you’re certain will improve customer satisfaction and brand loyalty.
You’re more likely to boost your repeat customers rate if you:
- Provide a good user experience
- Make data-driven recommendations based on customer purchasing habits and interests
- Make timely product suggestions
3. Put products into categories
A good way to organize your products for upselling is by assigning different categories and tiers to each one. You can separate the categories as you better see fit. Some example categories are:
- Price and quality tiers
- Perceived value by customers
- Positive reviews
- Most sold/least sold products
Separating relevant products into different categories will allow you to build automations with the previously mentioned apps to propose the right upsells.
For example, if you have an online electronics store and you sell TVs, you can separate them by:
- Picture quality
Then, you can create upselling opportunities according to different scenarios. For example, if someone is looking for a 32” Toshiba TV, you can offer them a slightly bigger model from Toshiba, or the same size but with better picture quality from another brand.
Pro tip: Although you can offer more expensive versions of each product, you should set a limit price per category so your upsells don’t exceed the additional 25% mark.
4. Measure your results and adjust accordingly
Use data-driven decisions to make your upselling strategy work. You should analyze the following:
- Purchase history. Use your customers’ browsing and shopping history to recommend products as upsells. By knowing your customers better, your recommendations will be more accurate and they’ll be more likely to convert.
- Site copy. The language you use for recommending different products is important as it can cause your upsell strategy to fail or succeed. Use A/B testing to identify which language works best for conversions.
- Types and location of in-page alerts. You also need to know which type of in-page alert works best for your upselling offer. Test add-ons, pop-ups, banners, and sidebars on different pages to see which one works best and where to locate them on your website.
5. Find ways to encourage customers to spend more
Just because your customer is adding items to their cart, doesn’t mean they’ll convert. In fact, 68% of US online shoppers abandon their carts before checkout. So, you need to make it a no-brainer for new prospects and existing customers to complete the order.
Check out these tried and tested methods to encourage customers to spend more on your store:
Implement the rule of three
People are used to seeing a pattern of three options to choose from. Offering three different products as an upsell possibility can often lead them to choose the middle one. So if you present:
- A $25 computer mouse with a cord
- A $32 wireless and ergonomic mouse
- A $50 computer mouse with colored lights for gamers
Your buyer will probably choose the $32 one. Because it’s not the cheapest option, nor the most expensive one.
Make upselling easy
Going for an upsell should be a one-click decision. Underneath each version of the product, there should be a clear button urging customers to “add to cart”. Remember, if you overcomplicate the upselling process, you’re likely to lose the sale altogether.
Use social proof
Customers trust other people over brands. Include customer testimonials and reviews on your product pages and when offering products as an upsell. This will generate trust and improve your chances of making the sale.
Offer substitute products
Avoid losing a sale because you ran out of stock. Instead, use this opportunity to upsell your customers with a similar product of higher value. For example, if your customer wants to order 1kg of arabica coffee beans from your online store, but you’re out of stock, why not offer the 1.5kg bag as an alternative? If you can, always allow customers to choose substitute products by hand.
How free shipping can increase ecommerce upsell numbers
Everyone loves free shipping. If you offer free shipping over a certain price threshold, your customers will be encouraged to purchase an additional item to qualify, even if it means spending more overall. That’s because they perceive more value in the product itself.
To use this in your upselling strategy, you could create product recommendations to upsell product upgrades to meet the free shipping threshold. That way, customers don’t have to buy something they don’t want to qualify—they’re just getting more of a good thing.
With Route, you can also upsell package protection at checkout. When they opt-in, your customers will be protected against theft, loss, and damage, and be sure the carbon emissions from their shipment are neutralized. With 30% of customers influenced to make a purchase if a company is environmentally responsible, this can be a pretty effective upsell.
Should you upsell your customers?
Upselling is a useful sales strategy that allows you to increase the AOV per customer by offering them high-valued and priced products. Incorporate an upsell strategy into your business by:
- Finding an upselling app to add on-page alerts
- Planning for ecommerce customer retention
- Categorizing your products by tiers
- Making data-driven tests and decisions
- Following best practices to get customers to spend more
If you combine upselling and cross-selling strategies you can increase the average revenue per user and lower your client acquisition costs.
When you partner with Route, you can upsell package protection and carbon-neutral shipping at checkout, with a cool 50% acquisition rate. Plus, your customers will love being able to easily track their package and see updates and product recommendations from your brand with timely automatic notifications.