Upselling is a tried and true technique for offering your customers products or services that are more valuable than the ones they were initially interested in.
- Upselling can increase your revenue by 10-30% on average.
- The likelihood of selling to a customer is 60-70%, while the likelihood of selling to a prospect is 5-20%.
- Upsell and renewals account for 70-95% of revenue for companies that upsell.
Assuming your company earns a flat percentage on every sale, the higher-priced items you sell will benefit your profit margins.
Isn’t it intriguing?
This article will help you become an expert at upselling. We’ll explain what upselling is and how it differs from cross-selling, how to identify opportunities, and finally, the tools and techniques you can use to succeed at upselling.
What Is Upselling?
Upselling is a sales technique in which a seller invites a customer to consider/purchase more expensive items, upgrades, or other add-ons to generate additional revenue. Typically, it entails marketing more profitable services or products. However, it can also present the customer with options they had not previously considered.
It is important to note that when upselling, it is always the same category and style of product or service, not a complementary product. So, if you work in a pet store, you won’t simultaneously sell dog food and a dog leash; it sells a wider and better variety of dog food.
What Are Upselling and Cross-Selling?
Before we begin with our upselling tips and examples, it’s critical to understand the distinction between upselling and cross-selling. Both are strategies for increasing sales revenue, but they work slightly differently.
Cross-selling is the practice of recommending other products that are related to the one being promoted. What is an illustration of cross-selling? Cross-selling occurs when you buy a cell phone online, and the online store suggests screen protectors for that model.
Upselling is the process of convincing a customer to purchase a more expensive version of a product. How do you increase your sales? Let’s use the cellphone as an example. If you are about to purchase a model with 32GB of storage space, the online store may advise you to purchase one with 64GB or 128 GB.
The wonderful thing about upselling is this. Along with raising AOV, it also increases client lifetime value. In other words, repeat customers make larger purchases. And because of this, it’s crucial for your company.
How to Upsell
Offer a special reward.
Showing your clients amazing new things on your website is one thing, but getting them to follow through and make a purchase is quite another. They’ve already made an effort to decide what they want to purchase, so they may require a motivator to push them toward an impulse purchase.
Customers are already in the buying mode if you provide your upsell opportunity on the checkout screen since they’ve already input their payment information. You’ve persuaded them to make an initial purchase; now, provide a special offer to get them to spend a bit more.
A combination of an upsell offer and goods your clients are already interested in helps them make their purchases. Customers trust your brand because they get what they want from it, and a particular offer also increases your sales prospects.
Customers might be more likely to spend a little more to acquire it. For instance, if their cart value is $50, they can save 10% more by upgrading to a larger product.
Always offer upsells.
Customers can buy an upsell if you provide them with more opportunities. As a result, promote your upsell everywhere it makes sense. Some familiar places for upsells are:
On product sites, where there are numerous opportunities to display product variants
When customers add items to their carts, it’s a perfect opportunity to showcase supplemental goods or services that will increase the value of the items they’re already going to purchase.
For instance, when a customer reaches significant success, Asana will offer better instructions on managing tasks with their premium version after you’ve added a few tasks.
Show the value of the upsell with quick wins.
People will put additional money into your company once you show it will benefit them. Even those who are pleased with the goods or services you now offer will require persuasion.
It’s always a good idea to back up your claims with proof (more on that in a bit). However, creating quick wins and providing something of value right away is the ideal approach to demonstrate to your clients how you can be of use. Say you work in the IT sector. It might offer customers a free test run of an updated piece of software. They may take advantage of this right away while also seeing a clear example of the long-term value they will be obtaining.
Upsell quality over quantity
Customers will become irritated if you oversell. Mainly when done at random.
Instead, concentrate on a few upsells that benefit your customers and enhance your primary offering.
Three upsells maximum per checkout. Once a person buys something, you may upsell him again, incredibly if he is contented with his buy.
You can design unique email marketing campaigns to instruct your customers on utilizing your items. By doing so, they can discover additional information, such as qualities they would require to achieve better results.
Use examples and proof to support your arguments.
Any upsell pitch needs supporting data. It’s crucial to show clients how you’ll benefit their business if you claim you can, especially if you’re asking for additional money. Show them case studies or client testimonials that explain how you were able to assist other businesses that made investments alongside you. Assemble all of your top customer testimonials for a specific product. Use as much social evidence as you can to support your ideas. Two other crucial pointers for utilizing evidence are as follows:
– Utilize your CRM. Using such a database, which tracks client purchases and identifies potential upsell products, up to 39% of businesses claim to have significantly increased their upselling chances.
– Driving urgency with low stock. It has been demonstrated that using “limited availability” signals or data increases the likelihood of successfully upselling clients by fostering a sense of urgency and “missin’.”
Use product comparisons to trigger a sale.
Most customers who visit your product pages are researching something and are looking into the availability, cost, and characteristics of products. Showing more than one product to your clients will simplify this procedure.
This method is frequently used on price websites for software-as-a-service (SaaS) products, where they contrast various service bundles. However, this strategy can also effectively position an upsell opportunity early in the client journey. Customers may select more quickly by having many options for the same product on one page rather than switching between different pages or tabs.
Depending on the kinds of things you sell, use comparisons. Customers gain from similar products with varied attributes that they use to decide which products to purchase.
Upsell the most popular products & best sellers.
Ninety percent of consumers acknowledge that reviews influence their purchasing decisions.
This means that if a product gets more ratings and reviews, you’re more likely to be able to upsell them to a more expensive version of it.
This is how many individuals make purchases: they visit a website and determine which product has the most reviews and the highest ratings.
With your best-selling products, you can get the same results. They will typically have the highest ratings and reviews, but not necessarily.
These goods are the finest at satisfying your clients’ wants, which explains why they sell so well. Consequently, more others are likely to purchase them as well.
Your best-selling products will therefore sell even better if you upsell them.
Use the Rule of Three
The “rule of three” is a term that marketers use frequently. People respond to patterns; three is a magic number, and this has to do with how people perceive patterns.
In this instance, we’re discussing the application of the rule of three to price. Numerous studies have demonstrated that when there are three price tiers, individuals frequently choose the middle one. This is sometimes referred to as “price anchoring.”
In either case, having at least three more options makes an upsell seem more appealing.
You’re set up to raise AOV if you use the rule of three and inform your customers about the benefits of the upsell (as was previously described.
Provide an Updated Monthly Report
Monthly reporting is an integral part of a business. Not only do you show your clients their current status and standing, but reports say a lot about how attentive you are toward them. If you have an agency and you are handling client accounts, a monthly report will give them a summary of what has happened to their accounts, if there were problems and how they were solved. A monthly report will also suggest what the clients expect to achieve for the upcoming months.
Monthly reports are your best upselling points to existing clients, leads, and prospects. Being able to provide data and solutions only shows that you are credible and can handle accounts well.
Upselling consumers has the potential to be one of the most profit-driving strategies in the arsenal of any marketer or sales team when done right. That is combined with creating the most effective elevator pitch or designing an optimized post-click landing page.
Start by selecting the appropriate product or service before implementing the method into your sales strategy. Next, strategically time the pitch to coincide with the customer’s demands or previous interactions with the business. Lastly, rely on time-tested strategies like emphasizing success stories or price-anchoring goods. No matter the sector, upselling consumers can increase revenue and speed up return on investment.