9 tips for increasing your sales with upselling

Upselling is one of the best tools to increase your e-commerce website revenue. By increasing the value of the average sale, you also boost the profitability of your online store. Another advantage is that no major changes or investments are required for this.

It’s about using the resources available to you wisely and focusing on providing value to the buyer. In this article, you will find 9 tips to help you implement upselling and grow your business.

What is upselling?

Upselling essentially consists of offering the customer higher-priced or higher-margin alternatives. As a result, the seller increases their sales, and the buyer receives a better product or service in return.

The key to upselling is presenting value-added options that match the interests of your target audience. This can be, for example, an updated or improved version of the originally selected product.

9 tips for maximizing sales through upselling

Upselling was a common practice long before the advent of the Internet, so it is not unique to online retailing. Have you ever been at a restaurant and given the option to increase the size of your drink for a small extra charge? This is a classic application of upselling.

However, not all upselling variants work the same way. For upselling to be successful, you need to consider the following factors:

1. When and where to offer upselling

Choose the right place and time to present your upselling offer. Analyze customer behavior and the performance of your website’s pages. Free tools, such as Google Analytics, are available to check click-through rates and conversions. This helps you understand how your business is faring.

Pay attention to the customer journey, taking aspects such as shopping cart abandonment and history into account. Also consider the type of product or service being offered. All this information can help you develop your sales strategy and target audience segmentation. This allows you to make an informed decision about whether to offer upselling before or after the initial purchase.

Upselling before the initial purchase

Upselling offers presented to your customer before closing the sale often appear on the product page under labels such as “Best Sellers,” “Most Viewed” or “You might also like” While these recommendations can be perceived as expert advice and enhance the shopping experience, the customer may quickly feel overwhelmed and abandon the purchase altogether. Furthermore, you have little information about the customer’s needs because the sale has not yet been closed. Therefore, your recommendation will be less accurate.

Upselling after the initial purchase

Does it make sense to offer an improvement to the original product when the sale has already been made? The following example answers this best:

Imagine a customer bought a computer in your store without an operating system or with an outdated version. You could offer the necessary program or upgrade, thereby increasing the value of the sale.

In this case, use either your “Thank you” page or the purchase confirmation message to introducing items for upselling. There is a good chance that your proposal will be relevant to the customer because it is highly targeted.

2. How much more is the customer willing to spend?

Of course, it’s tempting to double the value of a sale, but in reality, that rarely happens. So, make sure that your offer is within a moderate price range.

Some experts recommend that upselling should not exceed the value of the original product by more than 25%. This rule applies to traditional retail. In online retail, however, the limit is generally a bit more generous. The price is at least 30% higher than the initial product.

Some have also had success with price differences of 50%, but this is not the norm. In reality, the chances of conversion decrease the further you move from the original price. Moreover, your offer must meet the actual needs of the buyer. Focus on satisfying these when selecting upselling products.

3. Choosing your upselling offer

Relevance is the most important factor in upselling and certainly one of the biggest challenges. If your recommendations are not aligned with the original product, not only will they go unnoticed, but they may scare your customers away.

You will hardly be able to convince a buyer who is looking for a disposable capsule coffee maker to buy a more professional model.

The consumer may feel cheated or misunderstood by irrelevant suggestions. This does not demonstrate that you know the customer or want to satisfy their need. You are simply offering a self-serving sale. Not only will you lose that one opportunity, but you could also negatively impact your store’s reputation and, with it, your long-term business success.

4. How much is enough?

How many options should be included in the upselling offer? Experience shows that offering a single product has minimal impact on results. Furthermore, it is almost impossible to accurately predict buyers’ preferences. Provide several alternatives that meet the basic search criteria. But do not overdo it! If the selection is too large, information overload can occur.

This topic has been studied in detail by psychologists and neurologists. The more variables involved in a decision, the more complex it becomes. As a result, the consumer feels under increased pressure and may feel restricted and unable to make decisions.

American psychologist Barry Schwartz went so far as to define the “Paradox of Choice.” According to his research, people presented with many choices tend to be less satisfied with their decision. To avoid such inconveniences and reduce anxiety, he contends that brands can benefit from a narrower product offering.

So what is the ideal number? Practice seems to show that it is 3. Although there is no solid scientific basis here, evidence suggests that this strategy is effective. The formula for success is simple:

Present an upselling offer with 3 similar products with better features and a slightly higher price than the original.

5. The rule of 3

We also find this magic number here. This, however, refers to the prices of the items included in your recommendation. The rule of 3 combines upselling price ceilings and floors with the paradox of choice.

Select three items with three price levels, each being above that of the initial product. This creates three ways to maximize your income. At first, one could assume that the customer will choose the most favorable offer. However, that is not how the human mind works.

This is where the “anchor effect” comes into play. Because the brain loves patterns, it unconsciously uses information from the environment to make decisions. The high price of one product changes the customer’s perception of the other prices. They then seem less extraordinary, increasing the probability that these items will be selected.

6. Minimize upselling shipping costs

Does free shipping make sense for sales resulting from upselling? The answer is a resounding “yes.” The following graph illustrates the reasoning behind this.

Free or discounted shipping significantly influences the purchase decision around the world. If we focus on Europe, the data are even more meaningful. A survey conducted by Statista in 2021 shows that 7 out of 10 shoppers are deterred by high shipping costs.

You’ve invested a lot of time convincing your customers of the benefits of your upselling offer. You should not ruin all your efforts at the last minute. Furthermore, you’re asking your buyers to make an extra sacrifice and pay a bit more. It is only fair that they are rewarded with better conditions.

It would also be useful to set a minimum purchase amount to qualify for free shipping that is equal to the cost of the product. In any case, avoid upselling, which leads to higher shipping costs or delivery delays. Please note that the customer can change his mind and abandon the shopping cart at any time.

One effective technique for preventing purchase abandonment is to integrate reinforcement messages during the transaction. For example, you can set up free shipping reminders on upselling product pages.

7. When is it too late?

Combining upselling with a sense of urgency leads to a rapid and significant increase in sales. This is an old trade formula that has not lost its effectiveness. It is increasingly being implemented.

In recent years, a human behavior has been identified that could help explain how this works. This is the FOMO syndrome. This stands for the “fear of missing out.” The emergence of social networks and the spread of the Internet have contributed to such an extent to this phenomenon that it is estimated that 2 out of 3 social network users suffer from some degree of addiction.

When you combine the desire to be up-to-date with current trends with the desire to make smart purchasing decisions, it all makes sense. If you put a timer on your upselling offer, customers will be more likely to accept it. This convinces them to act quickly and not miss the opportunity.

Case studies show that some online stores have increased their revenues by 27% with this strategy. Additionally, it’s not just the time factor that can create a sense of urgency. You can also indicate shortages of supplies.

8. Avoid overselling

To be credible, the upselling offer must provide real value and be discreet. If the superiority of the add-on offer is emphasized too much, the consumer may begin to distrust the offer.

Moreover, intrusive upselling ruins the shopping experience. This is referred to as “overselling.” Be sure to provide clear information about the benefits of the improved product, but do not badger the customer with repetitive messages.

Watch for signs of rejection. If there are indications that the buyer is not interested in the proposed upselling offer, you should stop promoting it.

9. Upselling with the decoy effect

The decoy effect, or loss leader effect, is another technique that comes from traditional marketing. Its aim is to persuade the customer to choose the most expensive offer. This appeals to a cognitive bias by pricing one item slightly lower than a more expensive item. This, for example, persuades you to choose the larger drink over the medium-sized drink as you have been lead to perceive the more expensive option positively.

In another scenario a customer is looking for a book by his favorite author. The first selection is a softcover edition priced at 15 euros. Upselling could include three proposals:

• A hardback edition for 19 euros (about 27% more)
• A special edition with commentary by the author for 19.50 euros (30% more expensive)
• A bound, annotated and illustrated edition for 20.25 euros (35 % price increase)

This offer is designed to elicit desire in the customer to buy the highest quality copy. The first two alternatives are very similar in price and their different features are less attractive.

There have been numerous studies on this topic, and it has been found that a lure can influence the decision by up to 40%. Of course, you need to determine a deciding price that makes an option seem more valuable.

Multiply your sales with an upselling strategy

Upselling is an effective strategy to encourage your customers to make higher value purchases. Careful execution and planning can help you maximize revenue from your e-commerce business. Just make sure you’re making relevant offers that align with the buyer’s expectations and needs. A satisfied customer can become the best ambassador for your brand and attract new customers to your business through their recommendations.