What is upselling?
Upselling is the technique by which you can offer customers products or services of higher quality than their first choice. With, upselling the customer is incentivised, through the promotion of one item, to buy another more expensive item to increase your company’s revenue. In a nutshell, upselling offers the customer a second opportunity to purchase one or more products that may be more expensive but, at the same time, qualitatively better.
It is also important if the person has no intention of buying anything else. This sales technique can be used in any sector and is useful for both the person offering the product and the customer buying.
It allows you to make the buyer interested in other products in the future as well. All this is very important for your company and sales. It would be important for you to be able to acquire them through salesman courses as well.
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Why do upsell?
Upselling, although in many businesses it can be mistaken for an intrusive and negative sales technique, can improve the buying experience of many customers for several reasons that, in some circumstances, can make all the difference.
Firstly, upselling allows you to establish a stronger relationship with your customers. Proposing upgrades or add-ons and presenting them as an opportunity for a better deal will prove to be a tactic that will bring happiness to the customer and more revenue to your company.
Practicing upselling leads to an increase in Customer Lifetime Value (CLV), i.e. the net useful contribution the customer makes to your company over time. You can divide your customers into three main categories: unprofitable, profitable, and very profitable. A higher CLV implies more revenue from each of your customers without you having to increase your investment in generating new leads. In this sense, therefore, up-selling proves to be one of the most effective methods of customer retention.
Selling to existing customers is much easier than generating new leads. It is less expensive and can also be much more profitable because the user already trusts you and does not need to be convinced. It is a different matter for that type of customer who is hearing about your company for the first time. In this case, the work to be done will be more complicated, not without risk, and the percentage of concluding a conversion will be much lower. For e-commerce companies, this practice is ideal for improving profits and accelerating the growth process of the company.
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How to practice upselling
To find new customers and enable them to see your upsells without annoying them, you have to know how to choose the right time to show them. Showing your upsells at the wrong time can make all the difference.
Some e-commerce handles this situation by placing the upselling information well below the product to be purchased. In this way, only those who are interested can receive this type of information.
An alternative option would be to show your up-sell when people have decided to conclude a purchase. For example, within the shopping cart, before the final checkout.
Tendentially, then, upselling tactics can be used in three basic steps:
- before purchase: recommendations are displayed at the bottom of the page and/or in the sidebar depending on the product category.
- during purchase: you can continue to entice your customer with some tips that will be displayed via pop-ups, within the shopping cart, or on the payment page.
- after the purchase: Send customized follow-up emails to enable your customers to return to your platform.
Customer strategies and needs
Understanding customer needs is the basis for successful upselling tactics because it makes for a better buying experience. Properly done upselling always leaves the customer satisfied and with the feeling of having made a bargain.
Choose the right upselling
There are different types of upselling you can offer your customers.
First and foremost, the most common is the one about upgrading a product’s version or extending its warranty. You can ask your buyers to improve the software they have already purchased with you by offering them something better or greater protection against something that might go wrong.
You can also propose packages with several related products to enable increased sales and, consequently, revenue. Be careful, however, not to go overboard in proposing overpriced items. Customers will rarely support upselling if they have to spend more than 25 percent of the initially planned expenditure. Creating customized offers can be a good thing, as well as creating a sense of urgency by telling them that the offer will be available for a limited time.
Language is an important part of all successful marketing, but it is even more important to persuade your customers when you are targeting the upsell. Touching the right chords with direct language can be a successful tactic. Inform your customers of what they will lose if they do not seize the opportunity you are offering them with your offer. You will find that results and conversions will increase dramatically.
Channels for upselling
Online activities give you greater access to your customer’s data and thus provide you with additional tools that can come in handy in your upselling drive. Here are two main channels you can use in your tactics:
- Social Media: people are more likely to buy a particular brand’s product after following it on its Facebook page. Make sure you engage your customers on the social platforms on which they actively participate.
- Email Marketing: many have decided to take advantage of email marketing in this sense. At the heart of it, all is the idea of keeping personalized messages for your customers first and not forgetting to analyze your content to improve your online marketing strategy. Email marketing is still one of the most effective ways to reach your customers, and there are some examples of emails that can help you make more sales. For example, even if people don’t buy the upsell at the time of purchase, you can still offer it again via email. And you can sweeten the offer by offering an additional discount on the upgraded product or service.
Differences with cross-selling
In commerce of all kinds, the technique of upselling is often combined with cross-selling. The results of these strategies are often excellent because the customer is stimulated to spend more with the same company.
But, what are the differences? As we mentioned earlier, the technique of up-selling consists of offering customers products or services of higher quality than their first choice. People who come to your e-commerce site, or any business, are stimulated to complete a more expensive purchase.
Cross-selling, on the other hand, is the technique of offering the customer to buy products directly related to a previous purchase. Very often, the products offered are still items that the customer would have purchased, but, shown at the right time, the sale is practically assured. As far as e-commerce is concerned, the attempt at cross-selling is especially evident on the checkout pages.
Some examples of upselling
When we speak of upselling, we are not limiting ourselves to the field of e-commerce alone. As specified in the previous paragraphs, other types of platforms and software also invite users to upsell.
Here are some examples:
- Grammarly is software for the automatic correction of English texts. It offers the possibility of purchasing a Premium version and invites all customers to check out its advantages.
- Dropbox is a cloud storage service that allows users to save and share photos, videos, documents and all sorts of digital content. It uses an in-app banner to encourage upgrading to the Business version.
- Booking.com is a long-standing competitor in the competitive world of online hotels, flights, and travel assistance. Visitors using it for its core functionality, as a search engine for hotels, will find themselves subtly presented with upsell options right next to budget rooms.
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