Definition - What is Upsell?
Upselling is a sales strategy where a brand convinces a customer to increase their spending by offering a premium version of their desired product, additional features or services, or even other attractive perks. This technique aims to boost the average order value and profits for the business, and while product upgrades are popular, upselling can be flexible to include various incentives that entice customers to enhance their purchase.
Types of Upsells
Product Upgrades
This is the classic upsell, where you convince the customer to buy a higher-tier version of the product they're considering. This could offer more features, better performance, or a more premium look and feel.
Add-on Features & Services
This involves suggesting additional features or services that complement the core product. Examples include extended warranties, priority support plans, gift wrapping, or assembly services.
Larger Quantities or Bundles
You can upsell by offering discounts on buying a larger quantity of the product, or by creating bundles that combine the desired product with other relevant items at a discounted price.
Freemium to Premium
This is common in software or subscription services. You offer a basic version for free, but entice users to upgrade to a premium version with more features and functionality.
Loss Leaders with High-Margin Add-Ons
This involves offering a base product at a low price (sometimes even at a loss) but making a profit by upselling high-margin accessories or consumables needed to use the product effectively.
Best practices
Align Upsells with Customer Needs
Analyze customer data like purchase history and preferences to recommend relevant upsells that meet their specific needs and interests. For example, if they bought kitchen gadgets, suggest a high-end blender with multiple functions that aligns with their cooking goals. Highlight how the upgraded product's additional features provide more value to justify the higher cost.
Time Upsells Appropriately
Pitch upsells at the right moment when customers are showing interest or have already made a purchase decision. Pre-purchase upsells aim to increase initial order value, while post-purchase upsells boost lifetime value. Avoid overwhelming new customers and wait until they've experienced your core product's value, like after a successful project completion.
Emphasize Benefits over Features
Instead of listing technical specs, convey the tangible benefits the customer gains by upgrading or adding on. Help them visualize how the upsell improves their situation, like "faster upload speeds save time daily" or "find higher-quality leads with the premium plan."
Offer Bundles and Pricing Options
In addition to upgrades, you can bundle complementary products into value-priced packages. Provide a few tailored pricing tiers and options rather than one-size-fits-all to increase conversions and flexibility.
Importance & Benefits
Importance for Businesses
Boosts Profits
Upselling increases the average order value, meaning more revenue from each customer.
Reduces Customer Acquisition Costs
It's cheaper to upsell to existing customers than acquire new ones.
Increases Customer Lifetime Value
Happy upsell experiences can turn one-time buyers into loyal, repeat customers.
Benefits for Customers
Enhanced Value
Upsells can introduce customers to features or services that better suit their needs, leading to a more satisfying purchase.
Convenience
Upselling can provide a one-stop shop for everything a customer needs, saving them time and effort.
Improved Experience
Upgraded products or additional features can lead to a more enjoyable or effective user experience.
Read more about Upsell
How AfterShip Personalization’s AI-Powered Checkout Upsells Could Transform Your Business
Skyrocket Your Shopify Sales With Upselling
Upselling Throughout the Year: An Essential Guide for eCommerce Holidays