8 effective upsell strategy tips for success

The motivation for visiting an online store is the desire to satisfy a need. In some cases, customers may not even know what they are looking for. As a salesperson, you need to help them find the product that satisfies their needs and meets their expectations. At the same time, you have the opportunity to convince your customers with an irresistible upsell offer. But what is the key to an attractive upsell offer? Here we outline best practices for developing a successful upsell strategy.

1. Know your target audience and value your existing customers

The first step of any e-commerce plan is to know your target audience. This makes even more sense when it comes to developing upsell strategies. Ultimately, it’s about providing improvement opportunities for your customers. Therefore, you need to know what they need and be familiar with both their interests and problems.

In many cases, the upsell offer targets customers already in your database. This is a major advantage since you already have their demographic information as well as information on their buying behavior.

Many online stores focus entirely on customer acquisition as a strategy to increase sales. They overlook that growing your business depends largely on your ability to retain current customers and generate additional sales. Bain & Company, a management consulting firm, has researched this and concluded that a company can become about 95% more profitable if it manages to increase its customer retention by just 5%.

Upselling is often employed at some point after the purchase. In this case, you can build on the customer’s existing experience with your brand. Let’s look at SaaS products as an example. Their data illustrates that, as users become more familiar with the solutions, they also become more interested in new features and upgrades. Consequently, they are more likely to accept an upsell offer.

It is therefore not surprising that SaaS has built its business plans around this strategy. Survey results show that larger companies tend to rely more on upsells from existing customers.

2. Automate your operation

Automating processes makes it easier to manage your customers while providing valuable insights for developing your upsell strategy. Engage machine learning technology to spot opportunities and identify potential customers. You can then use the information gathered to create relevant upsell suggestions. The main uses of automation in online retailing are described below:

Segmentation

Start by segmenting your target audience, i.e. dividing your customers into small groups based on their characteristics. These groups can be classified based on demographic, geographic, purchasing behavior-related or other variables. CRM systems that allow you to apply very specific filters are available. You can create detailed profiles with these. It’s critical that you establish criteria that give you detailed insight into buyer motivations and expectations.

You can also use this information to track current customers and develop a plan that enables you to continue to provide value to them. For example, set buying behavior milestones that trigger pre-determined upsell promotions.

Product affinity analysis

Shopping cart analysis or product affinity analysis is a well-known predictive marketing technique. It consists of matching products in your catalog with segments of your target audience to help you predict their next purchase.

For accurate identification and linking, your item catalog must be well-organized. This point is often neglected because it is considered rather trivial. In the long run, however, this can lead to costly mistakes because valuable upsell opportunities are missed or there is a failure to link products effectively.

Identification of the “next best offer”

The next step after affinity analysis involves what marketers describe as the “next best offer” (NBO). In your product catalog, several items can be linked to one item. The predominant challenge is predicting which audience group will most likely convert.

Of course, in order to forecast this, you need to analyze your customers’ past behavior and the corresponding purchase data. This helps you present upsell offers that are precisely tailored to customer needs and interests.

Your online office supply store receives monthly orders from a customer. Since these are frequent purchases, you, as the seller, can set up an automatic replenishment service. It’s an improvement for the buyer because you are saving them a step in the purchase process which builds loyalty. And you have gained an advantage by securing future sales.

The “next best offer” can be applied to maintenance or preventive work as well as the sale of goods. This is commonly implemented with technology products, such as new software versions or cell phones. This technique can be employed in drafting the upsell strategy for any product category. This example should help you understand how it works:

A customer bought several toys from your online store last year. He first bought toys for babies from 0 to 6 months. Three months later, he became interested in items for children aged 6-12 months. The behavioral pattern suggests that the NBO products may be for children aged 12 to 18 months.

3. Create a personalized upsell offer

Online stores have many advantages over local retailers. However, there are some good small business practices that you should adopt. Remember how you felt when you went to the local store and the clerk offered you those cookies you liked so much? It’s always nice to be recognized and feel that others care about fulfilling our wishes.

The great paradox is that online retail has all the tools needed to create personalized experiences, but they are underutilized. This reality has been demonstrated in numerous studies. To cite just one example, consider the results of the Personalization Pulse Check conducted by consulting firm Accenture:

Several customers had abandoned an online store. The reason given by 48% of survey respondents was lack of curation. This refers to the inconsistency of item selection and the lack of corresponding offers. An overwhelming 91% of respondents said they prefer online stores and brands that offer personalized deals.

This demonstrates that personalization can be a deal breaker between a successful business and an unprofitable online store. Simple details such as addressing the buyer by name or referring to their purchase history make all the difference.

Suppose that a buyer was interested in a Manchester United FC ball during his last visit. Now he is looking for soccer jerseys, and you have just added the English league jerseys to your catalog. Do you think he might be interested in this team’s jersey? Present it as an upsell offer, and even if the customer does not buy it, consider it a win as he will definitely appreciate the gesture of a recommendation tailored to his needs.

The secret to upsell strategies is to provide value to the customer. Personalization is the best tool to achieve this.

4. Provide social proof

Making a purchasing decision can be a stressful, overwhelming and confusing experience. The higher the price of the product is, the greater the fear often is. As the seller, your objective is to minimize buyer hesitation and encourage them in their decision.

Don’t hesitate to use social proof to help your customers decide. Knowing that other people have found a product valuable can help customers overcome their insecurities. They will feel more comfortable and satisfied with their choice.

In upselling, social proof carries even more weight. The reason for this is that the inhibition threshold for purchasing increases in the case of a higher-priced product. When preparing your upsell offer, you should select items that have proven their worth.

Social proof can simply be a pop-up that reports on items purchased or viewed by others. A more sophisticated alternative is to show influencers or well-known personalities using the product. You can also include photos, videos or testimonials on your product page. However, mind that you comply with the regulations on the use of images and the protection of personal data.

Sharing reviews from satisfied customers also helps promote an upsell offer using social proof. These testimonials provide evidence of the value of the products. Objective data, such as usage statistics or percentage purchase rates, has proven effective as well. Moreover, figures tend to be very convincing.

5. Create upsell offers by bundling products

With product bundling, you offer your customer items that meet their broader needs and enhance their experience.

Carefully design a configuration of the upsell package that can meet these expectations. Offer a strategic mix. For example, if a customer buys an iPad, it makes sense to offer AppleCare+ and a customized case. If someone buys a computer without an operating system, add the software and the installation service to the package.

Product bundling works very well in combination with a personalization strategy. Not only will you increase your upsell sales, but you will also strengthen your customers’ loyalty.

6. Communicate the benefits of the upsell offer

To create a successful upsell offer, you need to pay attention to form. The mere description of the product may not be sufficient. If your upsell offer fails to convince the buyer of its value, they are unlikely to place the order.

Your approach must be based on the customer’s needs. To do so, you must recognize their desires and goals. Otherwise, it may appear that your only interest is to increase the sale value.

The ideal strategy presents the upsell offer as an opportunity. Formulate your recommendation from the buyer’s point of view and emphasize the additional benefits it brings. It is important that your message helps the customer understand the advantages of the upsell offer. You can do this with simple yet powerful arguments, as grandiloquent speeches often bore customers.

7. Use email marketing for upselling

At the beginning of this article, we briefly mentioned automation. Now we will explain in detail how you can use this upsell strategy via email.

Perhaps you are already using automated responses. These are called transactional emails because they are created automatically in response to the receipt of a contact’s email. Sending emails to customers who still have products in their shopping cart or announcing new products are common practices (Abandoned Cart Emails).

However, you can get even more out of your email marketing strategy by offering your buyers personalized suggestions based on their preferences. Test this method with your most loyal customers. Take a close look at comments and feedback as these will help you fine-tune your execution.

Learn more about the possibilities in email marketing.

8. Simplification of upselling

An upsell strategy can fail at the last minute if the buying process is too complicated. A well-executed design helps maintain the enthusiasm of buyers and increase the conversion rate. For example, the process can be made very user-friendly if the customer has the option to add upsell items without leaving the original product page.

So, configure your website so that your customers can update their shopping cart with just one click. The same principle applies to payments. Make it as simple as possible while still providing complete and transparent information about the transaction.

Upselling: immediate return and a long-lasting effect

A successful upsell strategy is the result of strategic planning. Do not lose sight of your customer during the planning process. Focus on meeting their needs. With the right tools, you can achieve amazing results. Not only will you increase your sales, but you will also provide the customer with an enjoyable shopping experience. After all, this is the best method to ensure the successful future of your company.