If you are like most e-Commerce entrepreneurs, then you must be always on the lookout for new ways of addressing customer needs and increasing revenue? You are not alone in the effort! Crafting strategies to increase customer value is a sales aspect that intrigues us all! Some sales techniques have proved worth exploring. Such are, for example, upselling and cross-selling. By increasing the value of our customer orders, we raise our sales volumes too. Keeping up a good level of selling skills in a digital age requires constant learning. Just to trigger your interest in today’s topic, take a look at this brief video on how upselling may apply in e-Commerce.
What is Upselling?
In a word, upselling most commonly refers to convincing a customer in buying a product of a higher grade and value. To compare, cross-selling implies convincing a customer in purchasing another — different but matching — product. As a result, both strategies increase average order values.
Probably, there is not a single web user who has not yet encountered the option of purchasing software plans of different pricing. The higher the plan, the better the functionalities. Customers can even start their customer journey with a free trial plan. This is how WordPress does it.
This seems to be one of the most straightforward manifestations of upselling. The sales logic behind this is that it is much easier to sell to an existing customer than to a new one. Some recent surveys highlight a 60-70% probability of selling to an existing customer, as compared to 5-20% to a new one.
Perhaps, upselling is best defined as “the art of suggesting upgrades to a purchase” (Shopify Blog). Nevertheless, it may also involve directly impacting your customer’s decision to choose a more expensive product.
How does Upselling differ from Cross-selling in e-Commerce?
Both upselling and cross-selling are widely used in e-Commerce. If upselling recommends a better and therefore more expensive product, cross-selling, refers to making a second, additional purchase.
Both upselling and cross-selling increase our chances of getting better customer value. Also, they both offer the potential for better responding to specific customer needs, thus enriching specific shopping experiences. Therefore, besides their positive effect on sales, they also help us serve customers better.
When is best to apply upselling in our customer journey?
When selling online, upselling is considered times more effective. As mentioned above, it may apply in all phases of our sales process – during pre-selling, post-selling, and while making the purchase itself.
Are there any risks of losing instead of deeper involving customers with additional offers?
Let’s take a look!
Pre-purchase upselling happens before a customer completes his purchase. It usually includes the purchase of better products or complementary items that are tightly related to the product considered. Such may be, for instance, an offer for an additional warranty, preferential delivery options, etc. If customers are offered too many additional upgrades in the initial phase of their customer journey, they may simply leave their shopping baskets. We can resolve this with the help of post-purchase upselling.
It is much safer to invite customers to add to their purchase after they have completed it. This way, we are not risking their original order and we are “safe” to do it.
Although post-purchase upselling may happen at different pages of our online store, most often it is done between the “checkout” and “thank-you” pages.
Browse some post-purchase upselling examples here.
Here are some key reasons why to consider post-purchase upselling in our sales mix:
- It drives higher AOV because customers increase the final price of their order;
- It does not affect the original purchase and is thus safer and riskless;
- It is characterized by a higher conversion rate as customers have already filled-in their payment data;
- It may be effectively used as a customer retention strategy where in addition to purchase we offer discounts, vouchers, free gifts, and samples;
- Most big e-Commerce platforms are equipped to apply it extensively. Take a look at what you can achieve by Shopify’s upselling plug-in on mobile: How to Upsell and Cross-Sell on Your Online Store
Sometimes, post-purchase upselling may hide certain challenges. For example, our second product proposal may not be necessarily relevant to customers, or customers may feel irritated and our overall shopping experience may become cumbersome.
Do not let this discourage you! We are here at your disposal to discuss how to best implement your new upselling ideas.
7 Tips and Tricks for Upselling Effectively
Here comes a handful of tips on how to upsell effectively. As a rule of thumb, the more data-driven and personalized your approach is, the better decisions you will be able to make.
- Be relevant. It is key that the second product you are proposing to a customer is giving a distinct value-added to his original choice.
- Ensure regular but tactic upsell offerings. First, ensure that your customer really sees your proposals on your web store but second, make sure that this does not hinder his overall experience from shopping with you.
- Personalize your upselling. Research has proven that 75% of customers have better chances of buying again if their offer is personalized. To achieve this, you may start collecting customer data such as purchase history, shopping preferences, names, etc.
- Use urgency. It proves effective using time-bound incentives to incite decisions to buy.
- Set a price limit. Use data to define your customer’s likelihood to spend more money. Best practice says to aim at a sale not bigger than 25% of your initial customer’s plans.
- Follow-up by e-mail. Even if your customer does not buy the upsell on your website, you can still offer it by e-mail. E-mail marketing still proves one of the most efficient tools for eCommerce.
Both upselling and cross-selling are effective strategies for increasing average order value in eCommerce. Although they may be implemented at various stages of the sales cycle, post-purchase upselling is often considered the most profitable way.
Upselling in e-Commerce is a well-established practice for enriching customer experience. When devising your upselling tactics, you may take advantage of tested tips and tricks to reduce the risk of impacting negatively customers and ensuring higher sales effectiveness.
Should you need more inspiration on how to apply upselling in your e-Commerce sales, take a look at our latest projects!
Are you ready for a new challenge? Call us today!