A lot of ecommerce businesses focus on driving more traffic and acquiring new customers, but neglect to extract more value out of their existing customers.
Considering that it can cost up to 25 times more to acquire a new customer than to keep and sell to an existing one, you should be focusing on driving more revenue from your current customers if you want your ecommerce business to keep growing.
A great way to generate more revenue from your existing customers is to use upsell offers.
What is an upsell?
Image source: Guiding Metrics
An upsell is an offer presented to a shopper with the intention of having them spend more money than they initially planned on spending.
This type of offer usually consists of a product that’s slightly more expensive than the one a shopper was initially interested in purchasing.
Upselling is a common sales technique used by businesses to increase average order value and boost revenue. It’s also very effective for increasing customer retention and lifetime value.
Customers also benefit from upsell offers because they’re presented with products that might be a better fit for their needs.
Why upsells work
The reason why businesses frequently use upsells is because they’re very effective.
The secret behind their effectiveness lies in timing. In most cases, an upsell is offered when a customer is thinking about buying or has already decided to make a purchase.
At this point, the business has most likely already managed to overcome any objections the customer might have had, increasing the chances of them accepting the upsell offer.
How to upsell effectively
Now that you know what upsells are and how they work, let’s look at how you can use them effectively to generate more revenue for your ecommerce business.
If you want to extract as much value from your customers through upselling, you’ll want to make sure to place your upsell offers in strategic locations, avoid complicating your offers, create reasonable upsells, use pop-ups and incentives, as well as split-test your upsell offers.
Place your upsell offers in strategic locations
For your upsells to be highly effective, you’ll need to place them in strategic locations across your website and external content, such as product pages, emails, and the checkout and thank you pages.
You’ve probably seen ecommerce websites display product recommendations on their product pages. You might be doing the same in your online store.
These are actually upsell offers. Some of the recommendations might be cross-sells or downsells too.
A great example of upselling on the product page can be seen on Mixology’s website.
Image source: Mixology
The brand includes only three items in their recommended products section, making sure not to overwhelm shoppers with too many options. The three products listed include an upsell, a downsell, and a cross-sell.
Displaying upsell offers on your product pages is a very effective way of getting customers to spend more money on their purchase. It also creates a better shopping experience by giving customers quick access to more options.
Pro tip: You can easily add an upsell offer to your product pages with Upsell Anything by using our simple drag-and-drop page builder.
Your marketing and transactional emails are also a great place to display upsell offers.
You can showcase upsells in your order confirmation emails, abandoned cart emails, as well as dedicated upsell emails.
Order confirmation emails
The order confirmation email serves to let your customers know that you’ve received their order. It should also provide them with information on when they can expect to receive their products.
These types of emails have very high open rates. This shouldn’t be surprising.
Shoppers obviously want to know that their order went through, as well as find out when they’re going to receive it. That’s why they open as much as 58.32% of all order confirmation emails.
Considering their high open rate, these emails are one of the best locations for displaying upsell offers.
If you decide to upsell through your order confirmation emails, make sure not to make your upsell offer the main focus of the email. The largest part of the email should still be dedicated to providing customers with more information on their order.
Huckberry does a great job of upselling customers in their order confirmation emails.
Image source: Really Good Emails
The brand’s emails provide all the details a customer might want to know about their order, including a listing of all the items contained in the order, as well as the estimated delivery date.
At the bottom of the email, there’s a section showcasing the brand’s trending products so that customers can revisit the Huckberry website and make another purchase.
Abandoned cart emails
While they’re opened less frequently than order confirmation emails, abandoned cart emails still have very high open rates compared to other types of ecommerce email campaigns.
This means that they’re another great place where you can try to upsell your customers.
We particularly like ASICS’ approach to upselling customers through abandoned cart emails.
Image source: Really Good Emails
First and foremost, the brand’s abandoned cart email accomplishes its main task – reminding customers of items they left in their cart. However, it also showcases a number of upsell and cross-sell offers to provide customers with even more options.
Apart from including upsell offers in your order confirmation and abandoned cart emails, you can also create dedicated upsell emails whose sole purpose will be to upsell customers.
What kind of upsell offers you’ll present in these emails will depend on your industry, the types of products you sell, and your customers’ buying habits.
For example, a fashion retailer could segment customers based on the brands whose clothing they usually purchase, and then try to upsell them by showing them products from brands that have similar, but slightly more expensive offerings.
Shoppers that have reached your checkout page are obviously ready to make a purchase.
Why not offer them an upsell right then and there?
The checkout page is an excellent place for upselling customers. Displaying an upsell offer on the checkout page comes with no risk – either the shopper will buy the product they wanted to get in the first place, or they’ll opt for the upsell.
Evelo does it quite well, offering add-ons that provide more features to customers while increasing the value of their order.
Image source: Evelo
Thank you page
It’s always easier to sell to existing customers than to people who’ve never bought from you before. In fact, you have around a 70% chance to sell to an existing customer.
You can take advantage of this by displaying upsell offers on your thank you page.
Since people who reach your thank you page have already bought from you and are obviously interested in your brand and products, they’ll likely be open to buying another product from you.
It will also be a lot easier for them to make another purchase because they’ve already given you all their billing and shipping information.
Amazon displays upsell and cross-sell offers on its thank you page all the time. Here’s how that looks:
Image source: Conversion Uplift
Keep it simple
Apart from placing your upsell offers in the right locations, you’ll also want to make sure not to overcomplicate them and confuse shoppers.
Avoid including too many products in your upsell offer since this can cause anxiety in shoppers and make them reluctant to make a purchase. In most cases, you shouldn’t be using more than three product alternatives as a part of your upsell offers.
By limiting options, you’ll help shoppers to make their decision more easily.
Create reasonable upsell offers
Your upsell offers should also be reasonably priced.
When we say reasonably priced, we mean that any product included in an upsell offer should be only slightly more expensive than the product that initially interested the customer.
For example, if a customer was looking at a $200 computer monitor, don’t try to upsell them by offering them a monitor that costs $1,500. Instead, show them monitors that are priced between $250 and $400.
Here’s a reasonable upsell offer from Apple:
Image source: Apple
This upsell offer from Apple is very compelling because it provides shoppers with an opportunity to get a much more powerful laptop by spending just 30% more than they initially planned on spending.
Pop-ups are a very effective way of attracting shoppers’ attention to your upsell offers. This is especially true if you set up your pop-ups to appear when shoppers add an item to their cart or try to leave your website.
Keep in mind that displaying too many pop-ups can annoy shoppers.
If you decide to use pop-ups on your website, limit them to be displayed just once every 24 hours. This will prevent your pop-up offers from decreasing the overall quality of the shopping experience you provide.
Image source: Beeketing
Provide an incentive
Another way to make your upsell offers even more effective is to combine them with an incentive.
With 90% of shoppers claiming that they make more online purchases because of free shipping, offering to deliver customers’ orders for free is a great example of an incentive you could use to increase the chances of shoppers taking you up on your upsell offer.
The best way to implement this is to offer free shipping on all orders that exceed a certain amount.
If you opt for using this type of incentive, make sure to let shoppers know about it by displaying the offer in a prominent place on your website, such as the top bar.
Here’s how Dick’s Sporting Goods does it:
Image source: Dick’s Sporting Goods
Split-test your upsell offers
Once you’ve created an upsell offer, it’s crucial to continuously split-test it to ensure that it’s generating as much revenue for your online store as possible.
Split-testing involves changing the offer slightly to learn if the new variant performs better than the original offer.
Keep in mind that the key to effective split-testing is to only change a single element of the offer at a time so that you’ll be able to know which specific change resulted in improved (or decreased) performance.
When it comes to upsell offers, you’ll want to test the following elements:
- Product – Start split-testing your upsell offer by changing the product you’re offering as an upsell. Try using different products in the offer and find the one that performs the best.
- Page layout – Apart from testing different products, you’ll also want to try out different page layouts and designs to see if using a particular layout helps your upsell offer to convert better.
- Price – Finally, you should also test the pricing of your upsell offer and find out which price point appeals to your customers the most. Note that setting a lower price won’t necessarily guarantee that your offer will perform better.
Pro tip: Upsell Anything comes with advanced upsell analytics that you can use to measure the performance of your upsells and identify your best-performing offers with ease.
Upsell your customers and generate more revenue for your online store
Upselling is a great way to generate more revenue for your ecommerce business. It usually involves offering customers a product that’s more expensive than the one that initially caught their interest.
Upsell offers are a great way to boost average order value, as well as improve customer retention and lifetime value.
Effective upsell offers are simple and reasonably priced. They’re also placed in strategic locations across your website and content.
If you want to extract as much value as possible out of your upsell offers, you should make sure to continuously split-test them to discover more profitable variants.