Upselling is an ideal means of increasing your brand's revenue while providing customers better functionality, more value, and increased use of their current product or service. It's a win-win situation, but executing it properly can be challenging.
Will you opt for pre-purchase or post-purchase upselling or both? What will your strategy be to optimize upsell conversions effectively? How will you message and position your offerings in relation to the other, so you can market a higher perceived value without cannibalizing different products or services? How much upselling is too much before you scare away customers? We're going to address these topics and others.
What is Upselling?
Upselling is the process of suggesting upgrades along with a purchased offering. (Upselling can apply to both products and services, but for this article, we will mostly be discussing products in regards to ecommerce stores.)
You can convince your customers and site visitors to buy more valuable, upgraded, or premium versions of a product using upselling techniques. An effective upselling strategy helps increase the average order value (AOV). Additionally, upselling can improve your store conversion rates and expand your business' sales funnel.
Upselling is a mutually beneficial arrangement, increasing revenue for the store owner while simultaneously adding value to the consumer's purchase. Proper upselling helps customers choose the right products and find any relevant additions they may need to better use the base product. Upselling also allows customers to entertain feature considerations of which they may previously have been unaware.
How upselling differs from cross-selling
Often enough, people get confused between cross-selling and upselling. While upselling focuses on upgrading the bought product, cross-selling sells complementary products.
Using fast food as an example, extra ketchup and related condiments would count as upsell offers with the purchase of a burger. On the other hand, fries with a burger would fall under cross-selling as fries are a different but complementary product.
Still not clear on the difference between an upsell and cross-sell? Let's see how it works for mobile device purchases. If a customer has decided to purchase a mobile phone, and you persuade them to buy a more advanced model, this would count as upselling. However, convincing them to buy complementary products such as headphones or a phone cover with the device counts as cross-selling.
Ecommerce businesses usually use a combination of upselling and cross-selling to maximize their revenue and increase customer satisfaction.
Pre- vs. Post-Purchase Upselling
You can implement upselling at any stage of the buying process. As the name suggests, pre-purchase upselling takes place before a sale. A typical upselling implementation involves offering relevant product add-ons on the product page or the cart page, so customers can easily add them before checkout. Pre-purchase upsells are best for small purchases and gift incentive add-ons where the purchase risk is low, so there are fewer purchasing objections to overcomes.
Upselling isn't just restricted to before or during the purchase. You can put upsell offers even after the customer has completed the transaction and has left the checkout page. This upselling strategy is called post-purchase upselling, and in typical ecommerce retail, sellers usually place their post-purchase upsell pages between the checkout and thank you pages.
Shopify apps that help
The Reconvert Upsell & Cross-Sell apps on the Shopify App Store make upselling and cross-selling items on the post-checkout page very easy. If you don't want to annoy your customers with a pop-up, try the In-Cart Upsell app on the Shopify store that lets you more granularly customize when upselling offers appear.
Upselling upon exit
You can even showcase relevant post-purchase pop-ups that activate upon exit from the checkout page. Bold Upsell is among the best Shopify upsell apps that let you upsell and cross-sell anywhere on your Shopify store through well-timed pop-ups. Another way to create pop-up upsell offers is by using the Pop Upsell app, which integrates seamlessly with your Shopify store.
One thing to keep in mind about pop-up suggestions is that they should be relevant to the customer's purchased product. This type of upselling strategy works best for upgrade discounts and small add-ons.
Post-Purchase Upselling Methods
Post-purchase upselling provides customers with an opportunity to add items to their order without impacting the original purchase. It means that there is no disruption to the initial buying journey, and it increases the AOV. But how exactly can you pull it off? Here's how to begin trying post-purchase upselling techniques.
Offer complementary products
Customers are more likely to be persuaded by relevant product recommendations because they're already thinking about the purchase. Upsell Recommendations is a free product recommendation app for Shopify store owners who are new to the online selling game. Additionally, Smart Search & Instant Search are other Shopify upsell apps that utilize your store's search function to suggest relevant products.
Offer discounted products
To keep repeat customers, offering discounts for future purchases as soon as your customers buy a product can encourage them to come back for more. Special offers on related products are another way to keep your customers interested. These special offers can be anything ranging from coupons to free shipping for the next purchase. You can use the Ultimate Special Offers Shopify app to create one-click upsell offers directly at your store checkout. Candy Rack is another popular one-click upsell app for your Shopify store.
Sometimes, to secure an upsell purchase, you may have to provide further incentives. A popular form of motivation is providing a free trial or free samples of your products. If the customer is satisfied, these freebies often convert to a more significant purchase. Usually, companies offer 7-days or 14-days trials on their products. Another example of such an incentive can be free gift-wrapping or offering free gifts with purchase to celebrate a customer's birthday, which is a successful tactic beauty brands like Sephora utilize.
Tips For Post-Purchase Upselling
Once you have got the basic mechanics of upselling right, the next thing to focus on is improving the process. How can you optimize your upsell funnel conversions?
Research has shown that personalized product recommendations positively impact the upsell funnel because personalization specifically targets customers interested in products relevant to their purchase. Keeping the product recommendations relevant allows customers to focus on their current purchase decision and removes distractions from the buying path. Then an increase in the upsell funnel leads to a higher average order value (AOV).
Consider relative pricing
While upselling, a rule of thumb is to avoid suggesting products that increase the overall order by more than 25%. If the purchased item is worth $100, your algorithm should be such that it does not show the customer's cross-sell and upsell items that cost more than $25. The reason behind this rule boils down to simple consumer psychology. Simply put, people don't feel compelled to spend significantly extra money on an item they have already bought.
Use historical data
A data-driven approach to upselling benefits store owners and enhances the overall shopping experience for your customers. When deciding upon product recommendations, using analytics and historical sale data can help pin down your customer's purchase behavior. If you notice a trend of product bundling, there's an opportunity for you to upsell the product bundle. Although it takes a bit of extra work, if you keep monitoring the performance of your upsell campaign, you can make minor improvements that will equate to significant improvements over time.
Email and social media marketing
The best upselling deployments are cross-channel. You can use targeted campaigns to promote your products and content to your customers that essentially "follow" them on social media. Retargeted ads are shown to be particularly effective in the D2C ecommerce space.
How Malomo Helps You Upsell On Shopify
Whether you use the Basic Shopify Plan, the Advanced Shopify plan, or the Shopify Plus plan, many apps will help you implement upsell opportunities. One such app is Malomo.
On average, buyers check tracking emails 4.6 times for each purchase. Leveraging this high engagement rate is a breeze with Malomo, which help you elevate ecommerce post-purchase upselling through:
Branded tracking pages
Malomo helps you create custom-branded, professional-looking shipment tracking pages that fit your brand's aesthetic—all without coding.
Proactive shipping updates
Improve customer experience by offering proactive shipping updates to notify your customers when delays or exceptions occur. Communication is essential in managing customer expectations when problems arise.
Integrate Malomo with leading ecommerce platforms like Shopify. Malomo also allows you to customize your shipment tracking emails directly within your ecommerce email platform.
Upselling is an effective means of driving revenue and delivering more value to your customers. However, poor upselling practices and tactics may have the opposite effect, overwhelming or driving customers away.
A data-driven, analytical approach to upselling will prevent poor upselling practices. Through critical thought and trend analysis, you will understand what upgrades your customers are interested in, how much more they are inclined to spend, and how best to position the value-addition to them are all key factors to make the sale.