Looking back at the last decade, we could easily label it as “the era of streaming services”. Spotify, Netflix and Youtube have all been a big part of the past 10 years, even making their mark on the English language (“Netflix and chill”, anyone?).
Okay, so we all love to stream our favorite shows, but what has that got to do with upselling? Well, streaming services are great examples of how a segment has succeeded in easy upselling. Because let’s face it, we’d all rather listen to music uninterrupted by commercial breaks.
But enough of reflecting on the last decade and another busy year that’s passed. It’s time to ditch the Black-Friday-Holiday-season hangover and think about how you can get the most out of your online store in the year ahead.
When you contemplate improvements to your online store, a word that should come to mind is ‘upselling’. Upselling is simply getting your customers to buy more, whether by choosing a more expensive item, adding extra products or upgrading to a premium version.
You could say that streaming services have it easy. Their premium product directly removes friction and annoyance for the user, so it’s not a hard sell. But what about e-commerce, how can you upsell your products in the most efficient way? The answer is not quite as simple, since there are so many ways to approach it.
But the true beauty of upselling is that it requires 0 extra marketing budget. It’s just a case of getting customers who have already found their way to your online store to buy more. The true experts in this area are Amazon. They claim that as much as 35 percent of their revenue comes from upselling alone. So how do they do it?
Here are 9 important things to think about when it comes to upselling in e-commerce.
1. Choose your upsell wisely
As mentioned above, there are many different solutions for upselling within e-commerce. The right solution for you will depend a lot on what you sell, and may involve combining several elements. Running tests will help you find the optimal strategy. But don’t upsell just for the sake of it; make sure that what you’re offering fits your shoppers’ needs.
Here are some examples of different ways to upsell:
- List cheaper and more expensive options next to each other and clarify what the customer will get for their money. When displayed like this, customers often think it’s worth paying that little extra to get the upgraded version.
- Help your customer out by showing them what other shoppers bought together with the item – an “Others also bought” section.
- Offer your shoppers a discount when they combine products.
- How can customers pay extra to remove friction? Faster delivery is one example.
H&M is one store that does the “Other also bought”-spelling well. They have also added a “Style with”-section to make it easy for the shopper to complete their outfit.
2. Always upsell
When you’ve decided on the right upselling option for your product, make sure to always offer it. Each time there’s no upselling option, you make it harder for your customers to spend more. But every time you offer it, you improve the chances of increasing your AOV.
One great place to upsell is on the product page once the customer has selected a specific product. Another good opportunity is of course at the checkout (remember the “Others also bought” section).
3. But: Don’t be too pushy!
If the upselling suggestion appears at the wrong time, the shopper might end up buying nothing at all. A piece of advice: Skip the neon-colored pop-ups flashing in front of the product they’re trying to look at…
4. Make it personal
A report from Klarna, “Experience is the new loyalty”, shows that 25% of US shoppers value a personalized checkout experience, based on a brand knowing their previous payment preferences. And that’s exactly what you as an online retailer should strive for.
Knowing your customer’s previous shopping behavior, you can adjust their upselling recommendations accordingly. This will provide them with helpful suggestions, and you with a higher AOV.
Some good ways to make it personal are to base the upselling suggestions on purchase history and to talk to them by name.
5. Offer free shipping
Even though free shipping in itself is not upselling, you can get shoppers to buy more by offering free shipping once they spend a certain amount. Promote it early on in the process: “Free shipping for purchases over $70”.
6. Three is the magic number
If you have ever worked close to marketers, you have probably heard them talk about “the rule of three”. It has to do with people responding to patterns, and this uneven number seems to do the trick.
What you should do is apply this rule to your pricing options. Many studies have shown that if there are three pricing options displayed, people usually go for the middle one.
7. Don’t be too greedy
Upselling is all about quick wins. That’s why you need to avoid upsells that are too pricey in comparison to the product the customer was first considering. Blogger Bitcatcha recommends nothing more than 40% greater than the item they’re already planning to buy. Others even suggest limiting it to 25%. In other words: Don’t be too ambitious when upselling!
8. Post-purchase upsell
Even though it’s great to get the customer to buy more while still on your site, you shouldn’t underestimate the power of upselling after purchase. The most effective way to do so is probably to send an email with the same deal offered on your website – or tempt them with something even sweeter.
9. And when nothing else works…
…consider down-selling instead.
This is mainly about giving your customers a personalized shopping experience. If you have shoppers who abandon the upselling options, they’re probably looking for something else. Have a look at their patterns; are they searching for alternative products at a lower price? If that’s the case, it’s probably time to down-sell instead.
A nice way to get the shopper to actually become your customer is to offer them a discount code to convince them to buy the product.
It might seem like there’s a lot of work behind succeeding with upselling, but the good news is that there are many great tools that can help you out with this. Klarna is a valuable e-commerce partner when it comes to increasing those AOVs.
The fintech unicorn has become more than just a payments company, but the heart of Klarna’s business is still about giving shoppers the opportunity to buy now and pay later. Offering financing options is an upselling method in itself, but Klarna has additional services to help you sell even more.
Let’s have a look at them.
Klarna On-Site Messaging enables you to push personalized messages to your customers while they browse your store. They get to know what their financing and payment options are as soon as they come to your site, without it feeling pushy. Instead, the messages are personalized thanks to Klarna using their 70-million-strong customer database to create a unique experience for each shopper.
This is a great way to upsell, since shoppers right away know their spending power thanks to financing options. Merchants using the service have seen a 25 percent average increase in order value, and also a 4 percent increase in sales conversion rate.
This is what it can look like:
Instant Shopping is exactly what the name suggests – shoppers can complete a purchase seconds after seeing something they love. It’s designed for on-the-go browsing, giving customers the ability to buy wherever they are, whether in an elevator or awkwardly waiting on a date.
By adding Instant Shopping to your site, your customers can skip the shopping cart and registration entirely. It’s easily implemented everywhere retailers have a presence; on social media, blogs or online stores. This tool makes it possible to upsell anywhere, even though the customer has only a few seconds to make their purchase.
What difference does Instant Shopping make for merchants? Judge the results for yourself. Conversion increases by 30 percent on average and retailers typically see an increase of 15.8 percent in AOV.
Let’s see what it can look like on blog sites.
To sum it up…
Phew, that was a lot to take in! Are you wondering where to even start? Well, the good thing is that you just have to start somewhere. Start with one thing, something easy, and try out some new upselling tricks. And always remember to track and analyze every step of the way. Good luck!