Upselling is a sales technique that allows brands to increase their revenue by inspiring customers to buy more upgraded and expensive models from their product lines.
Why Is Upselling Important?
The idea of upselling is to suggest a product that sweetens the primary deal, making the entire offer more expensive, but also adding value. Some of the obvious benefits of this practice are:
- It is simpler to retain current clients than to attract new ones;
- Upselling helps establish deeper relationships with your clients;
- Upselling results in better customer lifetime value (CLV).
Upselling is also important because it makes it possible to sell more than one item or a single more valuable item. This technique can increase income significantly as the difference between the former product and its upgraded version may be huge.
What Is the Difference Between Upselling and Cross-Selling?
Cross-selling is offering a related good or service to the buyer (for instance, shoes in addition to a dress). Upselling, in its turn, is about offering an upgraded version of the product. What do they have in common? Both methods are used to optimize profitability by motivating clients to spend more money.
You might need some examples to realize how these practices work. Below you can see some examples of upselling and cross-selling.
One example of cross-selling is so-called bundling sales. One of the most known companies to use this approach is the famous Amazon. Businesses that sell goods online use this method and benefit from it. The bundled products should be relevant and related, like this example with “Harry Potter” below. If the products aren’t coherently related, it won’t work and will only annoy potential buyers. You may also call it “Frequently bought together.”
Mixing SEO and SEM Services
It is a good idea to mix search engine optimization and search engine marketing services. To do so, determine and create customer personas. Then, do keyword research. After that, separate and arrange the keywords; assign more complicated keywords to SEM while the rest will go with SEO. If you have to hit both long and short-term goals, this option is right for you. Another example could be offering extra services or products related to the main topic of your website. If you offer editing services for writers and students, you may list all the possible assignments that you deal with, as many similar services do (e.g., CustomWritings).
Similar and Related Products
You may also choose a strategy like Laconicum does. It includes several similar or related goods in their initial offer. No matter which good you choose, you’ll be offered a better option with everything you need at the same time.
Paid Subscriptions vs Free Trials
Sky Broadband and Fibre prefer upselling to cross-selling, and they do it perfectly. They always offer a free trial or package, but the thing is that it lacks most of the features that clients need. That is why they initially try to offer paid subscriptions starting from ten pounds, for instance. They specify that the paid option adds plenty of speed, and that is exactly what customers need because everybody hates to wait.
The idea is to show that paid offers are much better than the available free options. An attention-grabbing picture is required but does not always matter if the offer has many exclusive features.
Now, it is time to dig a bit deeper into the process of creating an opportunity to upsell. Read on to find out how you can motivate your customers to buy more than they planned.
How Can I Upsell?
- Define the needs of your customers
- Come up with buyer personas
- Combine relevant goods
- Redesign the checkout page
- Select the type of upsell
- Benefit from knowing buyer persona
- Design and set up the campaign
Upselling takes place at the point-of-sale. Both salespeople and customer success managers are responsible for creating an upselling proposition. Here is how to do it.
Define the needs of your customers
You should understand why people are interested in specific goods or services. What motivates them to make a purchase? You can either talk to your clients on the phone or try to find their customer needs via polls and questionnaires.
You might think that your service or product has everything your customers need, but you have a limited perspective. Regular conversations with your customers will detect what demands remain unmet, and you’ll be surprised. You have to put yourself in the shoes of your clients sometimes to realize what they care about most. Otherwise, your business will not please your customers or bring in the desired revenue.
Come up with buyer personas
A buyer persona is a portrait of your ideal customer. Define the exact age, gender, occupation, hobbies, needs, goals, and other critical factors to realize what they expect from you and target the correct segment.
There are many factors to consider but focus on the main things: industry, pain points, and challenges. These are the major things to keep in mind because they will bring you the most value.
The next step is very close to the previous one. To create a buyer persona, you should communicate with both returning and potential clients. Do not think that loyal clients won’t ever leave you – you should implement the best practices of retention management to keep your existing customers satisfied.
Combine relevant goods
Bundling is a type of upselling that does not simply recommend products, but groups them in a specific category. It helps customers get an all-in-one purchase: everything they might need in one package.
Redesign the checkout page
If you don’t have the relevant goods displayed on your checkout page yet, we highly recommend adding them ASAP. You may set up different checkout pages to find which approach works best.
Select the type of upsell to use
The first approach is offering an upgraded version of what a customer is already interested in purchasing. Propose another version of the good or service. Additionally, you can offer product protection – asking the customers to extend their warranty to get cheaper product support and repairs. A screen replacement warranty is one of the common because it is something that suffers most damage out of all of a phone’s components.
One more type of upselling is customization is all about adding special touches to your product. It is about personalizing the product or service so that the customer feels special and is the exclusive owner of a specific design. As for the extended service period, it is somehow similar to product protection: the idea is to suggest a better value for a prolonged contract. SaaS companies benefit from such an approach.
Don’t be pushy with your offer
It is critical to come up with the right time for your offer. Inc.com has collected data from different sources, showing that Thursday is the best day for closing sales and setting up upsells.
Do not scare off your clients with annoying notifications and pop-ups! It is smarter to display your upsell at the payment stage, at the checkout or after that. Then, you’ll be sure that people who see your offer really need your product or service, and won’t be scared away. In the example below, the company reminds you that it is possible to get 25% off if you keep on shopping on their site. It is a rather attractive deal!
Benefit from Using Buyer Personas
So, you have determined your buyer personas, now, it is time to use this knowledge. When you are aware of a customer’s purchase history, you can provide valuable recommendations based on their previous purchases. Also, address your clients by name to make every client feel special.
When messaging, select suitable terms and phrases. For instance, it is better to avoid tech-savvy terminology if you are selling software so that you are more accessible for beginners. You should not use informal language or slang if you offer something related to serious issues like cancer treatment or home violence. Make sure that you speak the same language as your customers.
Design and set up the campaign
The last stage is to use free or paid tools to create and launch your upselling campaign. Many services make it possible to customize the fields and overall design completely.
Examples of Upselling
Now, it is time to have a look at some examples. It is up to you to choose the right form for your upselling campaign. It may be a website or an email campaign. Email upselling means sending messages after a purchase motivating buyers to take more action and continue their purchases.
Dollar Shave Club
Dollar Shave Club seems to understand its target audience perfectly. They place some restock features on their product pages and stress that clients can always count on some extras and full packages for shaving instead of, for example, blade only. Their upsellers are perfect reminders. It’s not another annoying sales pitch – it’s something that clients need and are already accustomed to using.
BMW does several things excellently. In addition to a successful UX design, they generate an opportunity for upselling. When ordering a car, they made it possible to configure the characteristics, making the car fully customizable and adding lots of upgrade opportunities.
The menu provides the opportunity to select cheese or olives as an extra component for a salad or pizza. US Pizza offers more ingredients or fully customizable order.
Now you understand how a good upsell looks. The practices in the section below will help you create your own perfect upsell campaign.
Upselling Tips and Best Practices
- Build trust
- Remain relevant
- Entice returning clients
- Don’t underestimate customer support
- Recall the “rule of three”
- Manipulate with time and delivery
- Come up with the social proof
Are you looking for more tips to make your upselling offer more effective? We are ready to share some with you!
If a customer hasn’t been with your brand for very long, they may refuse to listen to your recommendations. Build credibility by referring to specific, trustworthy, up-to-date sources related to your product or service. You may also involve influencers and ask them to share an opinion because 63% of customers rely on influencers to inform their decisions. In the example below, you can see that restaurant experts have chosen these particular places to visit. Most restaurant-goers are likely to trust a professional opinion and are more likely to visit your restaurant.
Avoid suggesting items that your clients likely don’t need. Coming back to the “Harry Potter” example, do not add “Lord of the Rings” to the recommendations list. You have no evidence that your readers want to see anything other than HP-related items on their list of recommendations. These books might have similar genres, but they target different audiences.
It is not necessary to only offer books from the series of the same name. You can add other products related to the series like memorabilia to the list because it is related to the main item.
Entice returning clients
The best way to attract return customers is to give them exclusive offers. When they think that you have nothing left to surprise them with, surprise them with a compelling offer! Exclusive offers include early-bird or seasonal discounts, referral programs, vouchers, and coupons for friends, etc. In the example below, River Island stresses that there is a limited discount on a certain group of products to make you eager to make a purchase.
Don’t underestimate customer support
Client support representatives capture the most upselling opportunities. They should be able to consult a client on any upgrades or special offers at any time – make sure that they are ready.
Recall the “rule of three”
You should not forget this rule whenever you are doing any kind of marketing. Three is a magic number when it comes to sales. Perhaps, you have noticed that, in most cases, there are three subscription packages to choose from on many websites. The first one is usually free, while others show their price and explain their benefits. Besides, people love having choices, but more than three options can quickly become overwhelming. Thus, it is better to settle on the three alternatives.
Manipulate time and delivery
If you sell goods, stress that your customers can get free shipping if they hurry up to make an order now or complete any other requirements. Stress that your offer is urgent and leave little to no time for postponing their order. This tactic is used effectively in the example below.
Use social proof
Mix your upselling offers with testimonials like in the example below. You can see what other customers think about the company. This makes your customers more confident when purchasing from your company. Social proofs are effective when it comes to upselling and email marketing in general.
Once they place an order and get what they want, do not think that your work is done. Remember customer retention? After a purchase, keep sending personalized emails notifying about new offers and deals from your company. Let them come back for more like the example below illustrates.
In summary, upselling is a vital part of a successful sales strategy. It is one of the best ways to increase revenue in the short-term. If you use email marketing in your strategy, send upselling emails with SendPulse! Automation 360 allows marketers to set up automated email sending after the purchase event is triggered by your clients.
Follow this guide to increase revenue with the upselling techniques!
Last Updated: 05.01.2021