Like any business, you want your customers to spend as much possible. You want them to buy more products and pricier products, along with extra features and add-ons.
Through upselling, you can increase your average transaction size, which boosts your customer lifetime value and ultimately makes you more money.
When we talk about upselling, we’re actually lumping four concepts together: Upsells, cross-sells, add-ons, and bundles.
Each concept encourages customers to spend more money and lead to larger shopping carts, but in different ways, so they’re worth understanding individually.
The four ways to boost cart value
Upselling is when you convince someone to buy a higher priced version of the same product. You might entice them to buy a computer with better specifications, a bigger diamond for their ring, or a larger makeup palette with more colors.
Cross-selling is when you convince the customer to buy a complimentary product, often from a different category. You might convince your customer to buy an extra battery for a cordless drill, an extra-long HDMI cable for a new TV, or a pair of pants to go with a new shirt.
Add-ons are additional services and products that help the customer get more value from the original purchase. This includes extended warranties, scratch-protection plans, training videos, etc.
Bundles are when you package two or more products together for the customer. You might bundle shoes with socks, video game systems with controllers, or hats with gloves. Usually buying the bundle is cheaper than buying the items separately.Through upselling, you can increase your average transaction size, customer lifetime value, and your revenue. Click To Tweet
Why does upselling work?
Upselling is especially effective, because it tends to happen at the point of sale (or close to it) in the buyer’s journey. By the time the customer decides to make a purchase, they’ve already overcome their objections — they’ve browsed your site, decided you’re trustworthy, and learned about your products. Their credit card is in their hand already.
This means they’re already in a buying mode. If you can convince them that an additional product or upgrade would give them more value, there’s a good chance they’ll buy.
It’s worth mentioning that upselling is 20 times as effective as cross-selling. Econsultancy found that cross-selling drives 0.2 percent of sales, but upsells drive more than four percent.
So what are some ways you can get more upsells?
1. Offer reasonable choices
The key to upselling is to offer additional products or upgrades your customers are likely to buy.
If someone is in the process of checking out with a $10 planter for their garden, you probably can’t upsell them a $400 lawn mower. Sure, those things are related, but the customer isn’t in the right state of mind to make a purchase that size so quickly.
But that customer may be interested in seeds, small gardening tools, or protective gloves. Those items complement the original purchase and don’t require the customer to make a big mental adjustment.
2. The checkout offer
The checkout page is an excellent place to upsell your customers because the buyer has already committed to making a purchase: they’ve decided to trust you and they’ve entered their shipping information. At this point, there is no barrier to overcome other than deciding if they want the product.
Dollar Shave Club upsells on its checkout page well. It offers customers complementary products and an opportunity to join its monthly subscription service. If you add an additional product, the page quickly updates the cart total.
3. The popup upsell
Popups are useful because they force shoppers’ attention. It’s easy to ignore the extra stuff on a checkout page (especially when the “complete purchase” button is big and colorful), but they can’t ignore a popup that must be manually closed.
Finch Goods uses a popup to add a small add-on to every account.
Keep in mind that this technique is designed to interrupt the user’s experience, which means you could upset your shopper. Make sure to only use popups after your shoppers have taken a deliberate step (like added items to their cart) so they’ll be less inclined to abandon your site.
4. The side-by-side comparison
A side-by-side comparison is one of the simplest ways to show a customer the better features of a higher priced product. Apple does this by displaying its MacBook in a comparison chart to give people the chance to buy pricier models, instead of letting users browse individual product pages.
5. The recommended productsRecommended products are a staple of a good eCommerce product page. Click To Tweet
There are two ways to sell with recommended products:
First, you can show products that complement whatever the shopper is viewing. If they’re looking at a bed frame, show sheets and pillows. If they’re looking at set a cookware, show them spatulas and whisks.
Second, you can show higher priced alternatives to whatever they’re viewing. If they’re looking at a queen bed frame, show them the king size. If they’re looking at stainless steel pots and pans, show them copper.
Khol’s gives the shopper some alternatives, most of which are more expensive than the main product on the page. They also smartly title their recommendations section “Customers who viewed this item also viewed” for a social proof boost.
You can add product recommendations to your Jilt emails by using the “related products” block in the email editor. Adding recommended products to your emails is a proven way to boost click-through rates, improve conversion rates, and increase the average order values for orders that result from your email marketing campaigns.
6. Free shipping thresholds
There’s no doubt that you should offer free shipping. Shoppers are more likely to buy if you raise your prices and give away shipping than if your products had lower prices and paid shipping. That’s why 64 percent of eCommerce sellers say free shipping is their most effective promotion.
An easy way to encourage upsells is to set a threshold for free shipping. If shoppers have to spend, say, $50 to get free shipping, they usually prefer to spend that money on a product than a shipping fee.
CoffeeForLess notifies their shoppers how close they are to earning free shipping.
7. Services to make the product better
Your customers may not want additional or pricier products, but they might be willing to spend money on related services that add value to their original purpose.
For example, some stores offer…
- Scratch coverage
- Extended warranties
- Content that teaches you how to use the product
- Faster delivery
- Installation or set up
- Customization/personalization (like engraving, printing, or stitching)
- Support plans
For an extra $5, Nordstrom will gift wrap your purchase.
8. The post purchase upsell
You probably send an email or two to your customers after they’ve made a purchase. It’s smart to connect with them at least once (aside from the recipient) to ask for feedback, request a review of the product they bought, or simply give them a coupon to shop again.
Post purchase emails are the perfect opportunity to encourage customers to make another purchase. You get to remind them of the value they’ve already received and suggest products you know they like (because they relate to their original purchase).
Home Depot sends post purchase thank you emails that give customers another opportunity to buy.
9. Show substitutes for sold-out products
Running out of inventory hurts because it could cost you sales.Minimize the effect of running out of inventory by steering customers toward other products. Click To Tweet
Take Metrodeal, for instance. When they run out of an item, they show a very similar version alongside the “sold out” message. Notice how the product images are cleverly similar.
This is a great way to cross-sell products (so you don’t miss out on sales) and prevent your customers from leaving your site after a negative experience.
10. Bundle necessary accessories
If your customer buys paint, there’s a good chance she needs a brush. If she buys a new outdoor grill, she probably needs a cover.
In some cases, a product can’t be used without another product. A flashlight needs batteries. A coloring book needs crayons.
Bundling products together is a great way to increase the value of your customers’ shopping carts. Plus, small accessories usually come with bigger margins.
No one does this better than Amazon. They match products people typically buy together and offer them to customers as a bundle.
Maximize your upsells through testing
Which of these techniques will work for your store? That depends entirely on your customer.
Once you find a technique that works, roll it out to your entire store and enjoy the revenue boost!