An upsell means enticing a customer to buy more by offering upgrades, additional products (cross-selling), one-time offers (OTOs) or other add-ons to their initial purchase to increase the amount of the final order.
Basically, an upsell is anything that increases your customer’s order value.
Amazon is a great example of a well-set-up upselling strategy:
Having a well set-up sales funnel can increase your average order value without you having to invest more into marketing.
Let me repeat this again. A well thought-over upselling strategy means:
- Your customers buy more from you
- You don’t have to invest more into marketing (i.e. buying and building traffic)
This is very powerful.
In fact, you can more than double your profit by including upselling into your sales funnel.
PayKickstart users have demonstrated powerful proof of concept: Many of them have seen both their average customer value and the total revenue more than double after they implemented one-click upsells:
Increasing ROI is good enough but what if upselling could also work as customer relationship management (CRM) tactic, turning your past customers into brand promoters? This means even more revenue without the need to invest into getting new leads (By Guy Nirpaz via Prezi)::
Happy customers don’t just buy again: They sell!
The smart upselling strategy should be building both:
- More direct sales
- More happy customers (driving more effective customer relationship management: see “CRM benefits” in the examples below strategy)
This changes the traditional understanding of a sales funnel quite a bit.
The traditional sales funnel:
The sales funnel that includes upselling and CRM:
[The sales funnel is more complex now that it includes upselling and customer loyalty strategies]
If you are not upselling, you’re basically leaving money on the table.
How to Make Upselling Effective
Upselling is only a good idea if it meets all of the below criteria:
- An additional offer should be a suitable match to the front-end product and actually add value to it
- An upsell shouldn’t be just a sales tactic. It should be customer happiness tactic building customer retention and loyalty. Upsells should make both the seller and the buyer feel like winners.
- An upsell should offer a one-click zero-friction upgrading experience (i.e. no need to provide your credit card details again)
- An upsell should be personalized at least to some extent based on the product itself or the customer’s history. A research shows that the majority of consumers are more likely to buy if the ecommerce site…
- Recommends purchases based on their history
- Addresses them by name
How to Set up Upselling Using PayKickstart
PayKickstart offers an easy way to create your own upselling strategy using the “Order bump” feature:
To set up an order bump, go to Funnels and there “Edit Funnel“:
From there, edit the product to enable “Order Bump“:
You are done!
Read a more detailed instruction here.
Based on PayKickstart.com data, adding an order bump, on average, increases your Average Transaction Value (ATV) by 30%.
To give you a better idea of different types of upsells, here are a few common ones you may have seen when buying (online or offline):
1. Premium services
Offer a premium service in addition to the plan (e.g. faster support, coaching, advanced personalized training, consulting, etc.)
Offering a premium service as an addon can help you steal your competitors’ clients by making it easier for them to switch to your platform and offering personal assistance as an addon service.
This is a common trick hosting providers use offering various advanced services – including migration help – as upsells to their lower-tier packages and free addons to their higher-tier packages:
2. Customization options
Offer an option to customize the product for an additional price, for example, change a color or up;oad your own picture / logo.
The ability to customize often gamifies buying experience making it more engaging and memorable. Adding an ability to customize an order is a good way to attract more buyers from word of mouth.
Shutterfly is the champion in offering this type of upsells on every step of their sales funnel making them irresistible:
[Notice how the price increases seamlessly with every customization]
3. Product protection or extended warranty
Offer to add an additional security or insurance (e.g. money back guarantee for a ticket if your buyer cannot show up at an event)
Amazon often offers to add extended protection plan to certain products :
CRM value: Offering a premium protection plan usually smoothens the relationships with the customer. Whether they purchased it or not, they feel like your business is no longer responsible for an accidental damage. Once you offer to optin for extended warranty, the buyer feels the full responsibility for the choice and is unlikely to get aggressive if anything goes wrong.
4. Extended service period
Offer a discounted price if a buyer subscribes for a longer period of time.
Apart from increasing the average order value, this upselling technique can also extend your customer lifetime value and build loyalty.
PayKickStart uses this technique offering 3 months free to anyone who choose to pay annually versus monthly:
5. Bundling and cross-selling
Offer to add a complimentary product before or after the buyer agrees to buy the front-end product.
Amazon is a good example of bundling products together in a most meaningful way (based on past customer experiences):
Stay away from too aggressive upselling!
Godaddy is another well-known example of cross-selling. They actually require a customer to opt-out from the offer when leading them through their sales funnel:
This is not something I’d recommend doing though. While a multi-step purchase experience may drive additional sales, this may actually irritate your customer in a big way.
6. Post purchase offers
Offering an upsell after a successful purchase.
Post purchased offers can be performed right after your customer makes a purchase. They can also be timed based on a milestone (e.g. a customer has been with you for a year).
Putting the right upsell in front of your customers at the right time is an important sales growth tactic. There are two important rules here:
- You should only attempt to upsell if the customer was happy with the initial sale.
- You should customize your upsell based on the initial sale (There’s nothing more annoying than being offered to buy what you already purchased in the past)
Post purchase offers (especially those that come a few months later after the initial sale and are timed to a holiday or a milestone) is great way to further develop your relationships with the customer, build brand recognizability and loyalty. There’s nothing like receiving a special offer for your own birthday from a brand you already like a lot!
Post purchase offers may be set up using email marketing automation software. For example, GetResponse (which also integrates with PayKickstart) can be set up to send customized upsell offers on a variety of special occasions as well as based on how loyal your customer has been:
How to Build a Winning Upselling Strategy
Finally, to create a better upselling strategy, make sure to:
1. Get to Know Your Customers Better
- Researching (branded) keywords and niche questions (to better understand your customers’ struggles)
- Surveying your customers immediately once they completed the purchase as well as on a regular basis, etc.
- Researching your customers’ demographics (PayKickstart can help you with that)
2. Monitor Your Customers’ Journey
Oribi is one example of a advanced analytics platforms that can map out each customer’s journey for you based on what it is you want to track. Seeing where each customers entered, which buttons they tried to click and what they ended up doing before leaving is absolutely enlightening:
3. Practice Social Listening
Finally, listen carefully to what your customers are saying and what excites or annoys them when it comes to their experience with your brand. But don’t just listen to your customers. Start listening to your competitors’ customers too, especially those that were particularly displeased. This will help you better understand your audience, avoid your competitors’ mistakes and hopefully even win those customers’ heart (if you treat them as your own leads).
Try using emotion search on Twitter, especially combined with your competitor’s brand name.
[:( competitor] will let you track all your competitor’s unhappy customers on Twitter:
Upgrade Your Business with Upsells
When done right, upselling will not only boost your bottom line, it will also make your customers happier and thus turn them into brand advocates. Use the tips above to create a winning upselling strategy for your business and set it up using PayKickstart order bumps and one-click upsells.
Ann Smarty is the Brand Manager at Internet Marketing Ninjas, as well as co-founder of Viral Content Bee. Ann has been into Internet Marketing for over a decade, she is the former Editor-in-Chief of Search Engine Journal and contributor to prominent search and social blogs including Small Biz Trends and Mashable. Ann is also the frequent speaker at Pubcon and the host of a weekly Twitter chat #vcbuzz