When it comes to ways to increase store profitability, upsell is one of the first to mind. This sales technique has proven itself in the best way, both in online and offline sales. And no matter what your product is: cars, gadgets, or feed for cattle. Even though the upsell techniques are widespread and can boost commerce income dramatically, not all know how to apply them correctly.
This article will tell you what upselling marketing is in a nutshell and give recommendations on how to harness this efficient increase in sales strategy.
Start with the basics — what is upselling?
Upsell is a mechanic of selling, which consists of increasing check amount by selling more expensive analogs, related goods, or services, that better meet customer’s needs and contribute to raising of satisfaction rate from using the purchased item.
Upselling marketing has two main goals:
- benefit customers, contributing to the speedy conclusion of the transaction here and now;
- Increase in revenue for vendors, by the value of other services rendered or additional sales.
Before you move to upselling, make sure your e-store works smoothly. If needed, use Magento bug fixing services.
Variety of upsell techniques
A clear understanding of which upsell techniques won’t encourage customers to purchase and make them feel satisfied and happy is essential for seller revenue. Different methods can be applied depending on the products.
You offer extra benefits related to using the purchased product or service. A few examples:
- Version upgrade — You are offering to buy an improved version of the original product that is more powerful, faster, or more expensive. The most simple example is purchasing an iPhone equipped with 64gb or 256gb of memory. Another example is a subscription to streaming services like Netflix. A more expensive subscription allows you to watch videos in higher resolution and access the resource from more devices.
- Product customization — Offer the customers to choose the parameters of the product they want, reject the options they don’t need and pay extra for features they would like but are not in the basic version of the product. A great example of this upselling technique is the variety of vehicle configurations that automotive dealers offer. Depending on the engine, interior trim, and additional options, the same model’s cost can vary almost twice.
- Product protection — Offer the customer to pay an additional amount to extend a warranty period on the purchase. This solution is trendy among sellers of expensive computer equipment, smartphones, TVs, etc.
It’s selling a larger volume or number of products with a discount (buy three and pay for two). A popular variation of this upsell technique is Twin pack. Consumers can purchase a variation of the main product but in a pack of two identical units. The seller’s offer: “buy two, I’ll give you an extra discount” – this is the upsell option.
Bundle or on pack
It’s a sale of the product’s set consisting of the main product and something else at a profit for a customer. These are the iconic bundles, the technique which is extremely popular in pre-holiday seasons.
These are sales of goods or services from other categories unrelated to the main product. When buying a gaming computer, you can offer to purchase accessories like a gaming mouse or keyboard. Many people believe that cross-sale is a different type of revenue enhancement and does not belong to upsell techniques. However, we have no right not to mention it in the article.
Advice on how to upsell effectively
- Determine what kind of need the client needs to satisfy and why he chose a particular product. This will help you select the most relevant upsell product. Remember, the main goal is to satisfy customers by offering the best solution, not getting more money. They will be loyal and return to you again in the first case. Otherwise, they will feel cheated and never return to you.
- Use visual comparisons of products, so customers can clearly understand that a proposition is better in specific aspects. Moreover, a difference between these parameters must be more tangible than the added money that a client will have to pay.
- The offer to spend a little more for the best must be accompanied by additional motivation, even if this better and more expensive offer is reasonable and understood by the buyer. A bad example of upselling marketing is convincing a customer that the decision is profitable or giving a little bonus to an expensive purchase.
- The upselling products will work efficiently if you select relevant recommendations in the context of price. Usually, customers are rarely ready to spend more than 20-30% on the cost of chosen products.
- The attempt to expand the offer by offering accessories should continue to convince the customer of the reasonableness of the purchase. It should not serve to rethink the user’s basic features and usefulness of the selected product. The offer should not serve as a reason to think about the lack of functionality: “…but what doesn’t work without it?”
- One crucial point is that all the techniques that increase sales strategy work only when the client has already decided to buy the selected product. Suppose the consumer is at the stage of product choices. In that case, excessive pressure and annoying “spend more” can discourage the purchase altogether.
So we briefly walked through the most common upselling techniques and highlighted the main points you need to pay attention to when using them. As for the technical implementation of upselling on your site, our experts are always ready to help you install and customize all the necessary technological solutions as well as provide Magento development services.