Few sales techniques are as universal and effective as upselling. Upselling is used to get a customer to spend more by buying an upgraded version of what’s being purchased.
Upselling exist because customers will often pick the cheapest version of whatever they’re buying. They need to see a direct benefit to paying more.
It is a salesperson’s job to make the customer aware of options beyond what they intended to purchase. Doing so increases the value of the sale.
Usually, all that is required for a successful upsell is to present customers with options. Since ecommerce sites use an interface rather than a salesperson, upselling is done in the form of product recommendations.
Here are some tips to maximize the efficiency of your upselling techniques.
The most important factor when offering a product recommendation is relevance to the product being purchased or considered. Some sites recommend products by promoting their most popular items. Some do the opposite and promote low-selling items in an effort to clear their stock of unwanted products. While both of these tactics make sense, they’re often ineffective.
For instance, consider a store that sells a variety of products. Many physical stores upsell by grouping items together in aisles. If these stores were to follow the “popular items” example, one of their aisles could be “breakfast cereal and auto parts” since both are popular items. Grouping these would seem off-putting in a brick and mortar store. It’s also off-putting online. It makes more sense to group together breakfast cereal and milk, since they are normally consumed together.
When considering what items to group together for recommendations, consider items that have direct or semi-direct ties to one another.
For example, if the item is electronic, recommend backup chargers, accessories, or batteries. If it’s furniture, consider recommending accent pieces that are frequently purchased as a complement. For more expensive items, a common and effective upsell is to offer an extended warranty. Many of these products can be bought elsewhere. However, by offering them while a user is already making a purchase, you can quickly increase your order value while saving the customer time.
Understanding the Customer
Whether a customer has bought from you in the past or not, the data you collect from them can shed some light on their purchasing habits. For instance, if the customer has been consistently looking at up-to-date tech equipment, they’re likely looking for quality over value. Therefore, recommending newer or higher end products will be more effective than low-cost alternatives.
The opposite can be true as well. Customers looking at lower end or older models will probably be upsold on warranties or accessories for the older model. It’s unlikely they’ll be interested in a brand-new phone.
You can also use this data to display more enticing results to “bargain hunters” who spend the majority of their time in the sale section. For instance, if customer X has been browsing shoes marked at a 50% off, showing them other discounted items will be more effective than trying to upsell them on a full price pair.
Consider a Recommendation Engine
Product recommendation engines are a fairly recent development in ecommerce, and they continue to advance. Essentially, they use an algorithm to study user’s purchases, browsing, and click history. It then uses the data to predict which products would be of the most interest to the customer, often leading to successful upsells.
Programs also allow stores to set custom parameters. Examples include: prioritizing seasonal merchandise, limiting recommendations to only full-price products, and even preventing low-stock items from being shown.
Research has shown that sites using such technology consistently have higher order values and greater conversion rates. While this technology does require an initial investment, it pays for itself quickly.
Upselling via product recommendations is a fantastic way to increase your average order value. However, like any tool, it must be used thoughtfully. By leveraging a combination of common sense, clever pairings, and technology, customer satisfaction can rise along with your AOV.
Looking for More Ways to Increase Your Conversions?
Check out UpSellit’s 27 Attributes of an Effective Email. This in-depth guide covers the ins-and-outs of crafting the perfect remarketing email. It’s a great resource and it’s totally free! Download it today and start writing awesome emails that convert.