Traffic Cardinal Traffic Cardinal wrote 11.10.2024

What Is Upselling? Definition, Benefits, and Best Practices

Traffic Cardinal Traffic Cardinal wrote 11.10.2024
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Affiliate marketing is not a piece of cake, webmasters have to constantly explore and apply various sales techniques to keep their profits coming from their advertising campaigns. One of these clever tricks is upselling, when you offer customers a more expensive item with extra features. If the customer originally wanted one product, you can offer them a better option with more benefits and value and hence seal the deal with higher profits.

Upselling does wonders at any geographic location and with almost every target audience. But to truly master this technique, you need to understand all the nitty-gritty of how it works. Today we’ll explain the meaning of upselling, ways to apply it in your marketing campaigns and show you some examples of successful upsale offers to get inspired with.

What Is Upselling?

So what does upselling mean? Honestly, it is much easier to grasp when you see it in action. For example, imagine you are promoting an online electronics shop. A potential customer wants to buy a smartphone. The system then shows them several other options that have better specifications. They cost more, but they also provide more value. The client might decide to pay extra and buy a better product. This way, the company makes more profit. This is upselling.

The goal of this technique is simple: to increase sales and revenue. However, there are different ways to achieve it. The main thing is that the customer is already interested in buying the product and it is similar to the one they initially chose.

Upselling vs. Cross-Selling

There are many selling techniques out there… Sometimes it can be so hard to tell one from another, isn’t it? Each serves different purposes hence has different outcomes. Let’s draw the line between the ones that are mixed up the most: upselling and cross-selling. This will allow you to avoid unnecessary confusion and get exactly what you want.

We’ve already covered the definition of upselling but practice makes perfect. So let’s make it stick: it’s when a seller encourages a client to buy a more expensive or upgraded version of the item they are considering. We can return to the smartphone example and specify it a little: upselling in this case will be to offer a model with more storage or better camera features. So this way the value of the original purchase will be increased when the salesperson suggests a higher-end product.

Cross-selling is similar in this respect (buyer spends more money) but it involves suggesting additional, complementary items to the customer. That is, using the same smartphone example, when the salesperson recommends buying a protective case or a screen protector. The bold move will be to try selling wireless earbuds along with the phone. Raising the final amount of the purchase so drastically might scare off the client, but who knows? Maybe you will end up closing a good deal! Besides, cross-selling is used to improve the overall buying experience. And what’s better than adding related items that conveniently complement the main purchase? It can be just the solution you are looking for.

As you can see, both strategies are the magic bullet when it comes to boosting sales and customer satisfaction, just keep in mind that they are applied in different contexts in order to achieve these goals.

Benefits of Upselling

Upselling is an effective technique that can bring many benefits to your business, such as:

  • Higher average order value. If you can upsell to 10 customers (that is, persuade them to pay 5-10% more for a better product), you will definitely improve your overall revenue.

  • More repeat customers. Your clients are sure to appreciate your service more when it’s your thing to offer them a wide range of options and customization. For example, if you sell smartphones, your shop will be the first to come to mind when they need to buy a new one.

  • Lower bounce rate. When you present multiple offers to your buyers, you give them more choices. This increases the chance that they will find something they like and buy it.

  • Stronger brand loyalty. A smart retail tactic is to give your customers the illusion of choice. In this case, you are not supposed to force them to buy anything. Instead you let them decide what suits them best.

Examples of Upselling

And now, dear reader, we invite you to explore some inspiring upselling examples from successful ecommerce companies and learn from their smart moves.

A good example of upselling is Dollar Shave Club. It’s a subscription-based razor company that offers the Starter Set for shaving products. Their kit includes a razor, shaving butter, prep scrub and post shave dew. This is a clever way to increase customer loyalty and retention, as it has two benefits. On one hand, clients spend more money by buying more products. On the other hand, they are more likely to continue with a monthly subscription after trying the starter kit.

Monthly subscription box from Dollar Shave Club
Monthly subscription box from Dollar Shave Club

The tech giant Apple upsells to their customers by offering accessories for their popular devices. One of these examples is the Apple Watch. On their website, they have a feature called Apple Watch Studio that allows clients to customise their watches. They can choose the case size, material, colour and strap of their Apple Watch by scrolling through a gallery of different combinations and seeing how they look on the wrist.

Apple Watch try-on feature
Apple Watch try-on feature

This engages customers and satisfies their preferences. Moreover, this also encourages to buy more straps for their Apple Watch, as they can easily switch them to match their outfit or mood.

McDonald’s also uses this selling strategy by offering fries and a drink with burger orders. This way they increase order value and revenue, and customers get a full meal and a drink to satisfy their hunger and thirst.

A classic combo: burgers, fries and Coca-Cola
A classic combo: burgers, fries and Coca-Cola

The fries and drink offer is a classic upselling technique in the fast-food industry. Well-played for both the customer’s experience and appetite!

Clinique, a beauty brand, entices its shoppers with gift sets when they spend at least $55. The gift sets cater to different preferences and contain both skincare and makeup products, neatly arranged in attractive and handy cosmetic bags.

Clinique free gift offer
Clinique free gift offer

This is a smart strategy, don’t you think? Customers buy more products than they originally intended and the average order value is growing. Besides, clients feel rewarded for choosing Clinique over other brands.

Next, a brand that offers a range of products, including baby items, uses upselling techniques with clothing sets. You might have only planned to buy one jumpsuit, but buying a set seems like a better deal.

Kids clothing set offers on Next’s website
Kids clothing set offers on Next’s website

Besides, it never hurts to have extra clothes, since kids can be quite messy and you might need to change them often. The brand knows this and takes advantage of it.

Best Practices for Upselling

To encourage upselling on your website, you need to add some extra sections. They all have the same purpose, but they are tailored for different types of offers.

  • Similar products. You can always suggest similar items from another category to your customers. You can also offer them new products that have just been launched and are in high demand.

Similar product offers by Lush
Similar product offers by Lush

  • Seasonal products. You can take advantage of seasonal offers. To make them more visible, create a separate category called “Seasonal Products”.

Starbucks holiday drinks
Starbucks holiday drinks

  • Filtered products. You can use upselling to show your customers the offers they have already seen or the ones they have filtered. For example, you can show them all the products that have reviews.

Product reviews with pictures
Product reviews with pictures

When and How to Upsell

Upselling is not a difficult technique to implement in your advertising campaign. You just need to follow these steps:

  • Craft your offer. Think about why a potential lead would agree to buy a more expensive item and how to convince them not to reject the offer.

  • Analyse and segment your target audience. First of all, you can start with getting to know your customers. The parameters for your audience profile may include their age, interests, financial status and approximate job title. After that, you need to split your audience into different groups and come up with a unique approach for each one. Some users need more time to warm up, some want to cut to the chase and some don’t like too many options. You need to consider all of these factors.

  • Upsell after the customer has decided to buy. This way, you can reduce the risk of losing the sale.

  • Add more incentives to your offer. You can sweeten the deal and suggest more discounts, gifts, free shipping or other perks if they decide to pay more.

  • Compare the products. When you offer more expensive items instead of cheaper ones, show the client what they are getting for the extra money.

  • Keep the price difference reasonable. If someone wants to buy a Nokia 3310, don’t offer them a new iPhone instead. The extra payment should not be more than 25% of the original price.

  • Don’t be too pushy. Upselling is a supplementary technique, not the main focus of your campaign. Don’t try to force it on your customers.

  • Create a sense of urgency. For example, you can limit your offers by time or tell the buyer that the products are running out of stock.

  • Don’t overwhelm the customer with too many offers. They might get confused or bored and decide to delay or cancel the purchase or just stick to the original product instead.

Conclusion

So now you know that upselling is your best bet if you want to skyrocket your conversion rates and profit margin. We’ve armed you with a secret of what upselling really is along with a kit of useful insights into best practices and inspirational examples for your future endeavours in the competitive market. Apply this valuable knowledge to your advertising campaign and you will

FAQ

Is upselling the same as cross-selling?
Not exactly. These two techniques are different (even though they pursue the same goal – to score more sales). We define upselling as offering an upgraded (and, of course, more expensive) version of the product instead of the one that the client intended to buy in the first place. When cross-selling, you stick to the initial desired product but instead suggest additional items on the side.
What is the difference between upselling and downselling?
Both techniques depend on the customer’s purchase power. If the buyer is ready to spend more, you can go with upselling, but if your offer can really break the bank, it’s better to suggest a cheaper alternative, that is, to downsell.
What are the types of upselling?
The most popular type of upselling is the magic word “premium”. Based on the nature of the product, it can also be extended warranties, additional features and services.
What is an upsell product?
An upsell product is a higher-end or upgraded version of the item which the customer is initially considering. Its purpose is to provide more value and increase the overall purchase amount.

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