Up-selling means applying sales strategies that encourage existing customers to buy more from their e-commerce. What do we mean specifically? The acquisition of new customers is undoubtedly one of the most complex and expensive activities for entrepreneurs. Retaining existing customers is easier if you know the techniques to apply, and one of the most effective is upselling. Applying this technique means increasing the revenue from individual transactions and customers obtained by offering them a higher-value version of the product they originally intended to buy or have already purchased.
Upgrades, luxury, or premium versions are part of this wide range of strategic proposals applicable by e-commerce owners to up-sell and maximize revenue from each customer.
What does upsell mean in practice, and how are these techniques applied? What is the difference between upselling and other sales strategies? How do you propose exclusive versions without seeming too invasive? Let’s talk about it in detail in this article!
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What Does Upselling Mean?
As mentioned, up-selling refers to a series of sales techniques that incentivize the customer to purchase a better, more complete, or more extensive version of the product initially requested.
An example could be a newer version of the smartphone requested by the customer, the premium version of the software, or an extra-large package of detergent. This activity does not translate into a pressing and continuous sending of commercial messages, quite the contrary. The goal is to emphasize and make customers aware of the variety of the company’s offers, perhaps with specific discounts, earning more from individual transactions.
Your goal when implementing up-selling strategies for your e-commerce is to make the life of your customers easier, suggesting, right from the start, the best solution for their needs.
You are talking about upselling means putting articulated strategies into practice. To succeed, you need to know the characteristics of the products sold and the needs of potential customers in depth. If you do not see the profit margins of individual products, the average cart, the problems, and the most suitable for your customers, putting these strategies in place could also lead to negative results.
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Difference Between Up-Selling And Cross-Selling
Among the sales techniques used together with up-selling, we can include cross-selling. It also aims to obtain more from individual transactions and existing customers. Still, instead of offering advanced or premium versions of the same products our customer is interested in, it is based on the proposal of complementary products or services. Although the two terms are often used interchangeably, the two methods bring different advantages and are applied distinctly within e-commerce. Let’s take a small example to clarify the difference between these two sales strategies: A potential customer visits your tech-dedicated e-commerce site to buy a mid-range laptop.
His expenses with this purchase will be around € 800. After selecting the preferred model, the customer is presented with several options: newer laptops or with more powerful accessories. In this case, we are looking at an up-selling strategy. On the other hand, showing accessories such as a laptop bag, a mouse, or a webcam means putting into practice cross-selling strategies. Using these sales strategies in combination will help you increase the value of the average receipt and encourage the purchase of other products or services.
How To Upsell?
Being able to generate performing and helpful up-selling marketing strategies to increase the sales of your e-commerce means knowing some data and applying some principles.
Always remember that upselling should be a win-win strategy: customers trust you and your products and receive added value and more complete and practical solutions to solve their problems or meet their needs. Everything must start from a profound study of the typical customer: what are his tastes, his needs, his spending power. You can build relationships and encourage long-term customer loyalty by knowing it well. To build winning and effective up-selling strategies, you should:
- Know your product in-depth: the idea behind upselling is always to help customers understand why they should choose the most expensive option. You can communicate it well only by knowing in depth the characteristics of your product and the needs of your target;
- Recommend solutions that your customer could appreciate: always remember to underline the “extra benefits” that the customer will get by paying a slightly higher amount;
- Do up-selling without exaggerating: make sure there is a minimum price difference between the product you are offering and what your customers are viewing, comparing it with your market and the value of the products you sell;
- Use automation and analytics whenever you can;
- Minimize Choice Options: According to a 2006 research by Bain, reducing complexity and narrowing your choice can increase revenue from 5% to 40%. The good idea is to offer only two or three choices, highlighting the best option, and communicate to your customers the importance of buying something valuable and beneficial.
Also Read: How To Deliver High-Impact Sales Coaching
When To Up-Sell?
Not all products in your e-commerce are suitable for applying up-selling strategies. Some are potentially more profitable and interesting than others, for example:
- The products with the most reviews ;
- The best-selling products (which will probably also be the most reviewed);
If the question you are asking yourself at this point in the reading is: when can I upsell, on which pages is it better to show premium products? To answer briefly, we advise you to sell up:
- To show their premium or updated versions on the product pages,
- When the customer reaches some milestone, thank them with discount codes;
- Use up selling on the checkout page: many buyers are impulsive and can be persuaded to buy other products just as they are about to complete the payment.
However, always keep in mind the conversion rate of your e-commerce and your customers’ purchasing process!
Examples Of Upselling And Success Stories
In conclusion, here are some examples of effective up-selling of the practices you can implement on your e-commerce to try to satisfy your customers’ requests and offer the best in terms of quality, shopping experience, and results. To best up sell, you can propose:
- An updated version of your product or service: Offer your potential customers the latest version of your product or service.
- Product warranty protection or extension: ask the customer to extend the product warranty to insure it for longer or in the case of more specific damages. For example, in the case of smartphones, you could also offer a guarantee for screen replacement.
- Customization: Offer to customize a part of the product for a little extra.
Now you should understand how important it is to implement up-selling strategies in your e-commerce: to sell more and to add value to your customers’ shopping experiences.