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The Huge Advantages Of Upselling On Your Shopify Store

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written by Devin Zander | September 15, 2017

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For E-commerce sites, like Shopify, you can increase your revenue by offering your customers up-sell opportunities. Up-sell should not be confused with cross selling which is when you encourage customers to buy products that go well with their purchase. For example, if you just bought a tent, a good cross sell might be a sleeping bag. Up-selling, on the other hand, is about spending more on additional features of a product they have already purchased. When you offer up-selling solutions, you are not only increasing your company revenue, but you are also building good relationships with your customers.

Time to Step into The Up-Sell Big League

In 2006, Amazon announced that 35% of their revenue was generated from their cross sell and up-sell efforts. Some of the smaller e-commerce stores have shied away from using up-selling techniques and are losing out on substantially increasing their revenue. Hopefully, through this article, we can expand on the incredible growth opportunities available to an e-commerce business when they embrace the potential of up-selling. Sucharita Mulpuru, a research analyst at Forrester, found that product recommendations are responsible for 10-30% of revenues on e-commerce sites.

Increasing Your AOV with Up-Selling Options

As an e-commerce business, you are looking to increase your average order value (AOV). The goal is to make more money per order while spending the same amount to acquire the customer’s business. The additional revenue gives you more budget to spend on marketing or to re-invest in your e-commerce store. We’ve all heard the famous McDonalds Up-sell Story from the 70’s?  They weren’t selling fries with their burgers so they decided to simply ask each customer, “Would you like fries with that?” Their AOV went through the roof.

Up-selling drives an average of 4% of sales at your e-commerce store according to a Predictive Intent study. The study also revealed that up-selling is 20 times more effective than cross selling. It is important that you test what up-sell offers will work for your products.

When a customer has already expressed an interest in your brand and trusts the relationship, they are more open to up-selling offers. You are 14 times more likely to upsell to existing consumers than to a first-time buyer on your e-commerce site. Instead of throwing all of your budgets at acquiring new customers, save some for engaging with your existing ones.  Marketing Metrics found that “the probability of selling to a new prospect is 5 to 20%. The likelihood of selling to an existing customer is 60 to 70%.”

Does Your Product Have Up-Sell Potential?

Not all products have up-sell possibilities.  To determine if they do, you must ask yourself a few key questions. Is the proposed up-sell a better version of what the customer intends to purchase? Is it a relevant addition to the original item? Will the up-sell benefit the customer? Is the customer in the market for an up-sell or have they shown they don’t want to make any further purchases?

Up-Selling Avenues

Once a lead has converted, they are ready to receive your premium offers, package deals, volume discounts, and warranties.

  • A premium offer is a luxury version of the original product
  • Offering free product warranties when you offer a higher-priced item for up-selling increases revenue
  • An after purchase up-sell can be part of your email drip campaign that sends out warranty up-sells etc., as part of your ongoing relationship with your acquired customer.
  • Inbound customer service interaction offers further possibilities for up-selling to customers. The more personalized the recommendation, the higher the probability of a sale.

These up-sell opportunities can take place while the customer is selecting items for their shopping cart or at checkout. They can be introduced in email drip campaigns and of course through direct contact. Up-selling is basically about enticing your customer to spend a little more than they originally intended to pay. But you are also offering them a significant upgrade with better features and specifications or higher volumes that will improve their lives and provide exceptional value.

Right Pricing for Up-selling?

However, your “up-sell” can’t be for a massive amount. If someone is buying an item for $100, your up-sell can’t be for an additional $1000 because you definitely won’t convert. It should be presented as an incredible bargain for the customer. Ideally, the related up-sell should be 60 -75% cheaper than the product the customer has added to their cart. An up-sell can also be offered post-purchase where there might be less chance of cart abandonments. If they have already made a purchase, they could be in buying mode, and an up-sell might inspire another purchase.

It also works to suggest who the upgrade would benefit. Perhaps with a sale of additional storage on a computer, you could say, “For professional film editors” and explain the reasoning why this group might find it useful. Putting a suggested up-sell option in context is a highly persuasive technique.

Knowing Your Customer

When deciding on which products should be up-sold, focus on those that have received the most reviews, your top selling products and what is most relevant to a particular segment of your target audience. When you up-sell an ideal product for a chosen persona, you stand a greater chance of making the sale because you do know your customer.

For e-commerce stores operating on platforms like Shopify, you can use a variety of plugins to automate your up-selling efforts. Shopify offers a range of up-sell apps which trigger the up-sell offer at checkout based on what is in the customer’s cart. Smar7 Bundle Upsell is the world’s first smart up-sell and bundle app on Shopify.  Smar7’s app works perfectly for all web browser and mobile devices with a gamification element that makes shopping with you…Fun! There is a range of plugins to choose from depending on your particular up-sell and cross sell needs.

Limit your Up-selling Options

We are impulsive shoppers so when we see an up-sell opportunity at checkout; we are more likely to take up the offer. However, consumers do not want to be faced with too many choices.  Too much choice is demotivating according to a study conducted at Columbia University and Stanford. If you offer too many options, the customer feels paralyzed by choice and abandons their cart without making the original purchase.

There is so much information online, and you have to narrow down the selection for people. The Google “Zero Moment of Truth” report showed that from 2010-2011 shoppers doubled their consumption of information, and then it doubled the following year again. 2012 seems eons ago so you can just imagine how much info we are consuming in 2017! Keep up-selling options simple to avoid confusion and overwhelm.

Adding Real Value

The key to a successful up-selling strategy is to be empathetic, not opportunistic. You don’t want your customers to turn away from the purchase because you have been too pushy. You want to suggest up-sell products that will add real value to them and that they will enjoy. The offer has also got to be a good upgrade because you want to increase your average order value, but at the same time encourage a long lasting customer relationship. You want to use upsell apps that make the process intuitive and easy to use.

E-commerce stores that embrace up-selling (and cross-selling) are the ones that will stand a better chance against the giant online stores because they are offering the same kind of customer rewards for their loyalty. Let us help you have a competitive advantage with our up-sell and bundle app that increases your revenue. Click Here and try our FREE 30-Day trial.

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