In the world of eCommerce, how do you make more money? Do you focus on acquiring new customers or retaining old ones? As a small business owner, increasing the average customer lifetime value and order units is one of the smartest decisions you'll ever make.
"The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70%." — Marketing Metrics
An upsell is when you persuade a customer to buy something extra or more expensive.
Here are some ways to leverage upsells:
1. Make your upsells related to the product the customer is buying.
When offering upsells, be sure the additional item is a relevant one. Don't just throw in a shirt because you want to make more money. Most upsells fail when you show items that are not related to the customer.
For example, if the customer bought a sports related shirt, it wouldn't make sense to offer them an upsell in the pet niche. Or if a customer bought a premium brand like American Apparel, don't offer them a Hanes product as an upsell.
2. Be sensitive about your price.
When you start to experiment with prices, try not to offer too much of a discount as it can cheapen your product.
The upsell must have a small difference in dollar value or a small nominal percentage difference – 10-20% max. You need to show some incremental value for the increase in price.
Most sellers offer a $5 upsell discount on GearLaunch. GearLaunch makes it easy to upsell customers by letting them complete the purchase of the first product and then offering them a few options, right after they click the buy button. Customers don't have to re-enter their credit card information if they choose to take an upsell.
To activate an upsell on a campaign, go to the campaign settings and locate the upsell box in the right column.
Enter the upsell discount amount and you're all set!
Here is an example of the upsell pop up that will appear after the customer has completed purchasing the first product.
Upsell discount as it appears on the customer's receipt.
3. Upselling increases Customer Lifetime Value (CLV).
Once someone makes an upsell purchase, you can segment them through a drip email campaign over a period of thirty or sixty days and offer them more upsells.
The best part is that through email, you can group your list based on interests and segment them based on actions they take.
If you're using MailChimp, you can set up eCommerce 360 to automate your workflow to keep customers engaged after purchase.
The eCommerce360 workflows let you send automated emails based on a specific product purchase or purchase from a product category. When a subscriber triggers the workflow with a sports apparel purchase, for example, you could send a series of campaigns offering other apparel items from that sport.
If you aren't upselling your customers, you won't be able to maximize your revenue.
Offering personalized experiences and relevant recommendations will help your customer get what they want without compromise and feel good about it. This not only makes you more money, it makes them happier in the long run.