What Is Upselling | Best Techniques and Hidden Perils

Upselling means, “Do you want fries with that? “

The most common example of upselling is this sentence that most people hear. The idea behind this short sentence is the “upselling technique.” McDonald’s has made thousands of dollars with these six words simply. So you can use an upselling strategy for your eCommerce to increase your revenue by increasing your average order value.

You can boost your business revenue up to 35% if you use upselling and cross-selling intelligently. So read this article because we will share our experiences and practices to help you get the best result.

Five important topics that you will learn in this article: 

1. What is upselling exactly, and why is it important? 
2. The difference between upselling and cross-selling (upselling vs. cross-selling)
3. Uncover upselling tips and best techniques
4. List of most common mistakes when upselling
5. How to upsell

Without further ado, let’s get to “what is upselling”!

You might be wondering how much effect ordering fries have on McDonald’s billion-dollar sales, look at the image below. This image shows upselling effect of several McDonald’s products:

Did you get what a simple sentence does with sales? If yes, follow this article because we will teach you how to increase your sales like MacDonald did.

What is upselling exactly?

In short, an old marketing strategy persuades customers to purchase more valuable and expensive products. It can be in addition to their purchase or upgrading their primary purchase. 

To clarify, imagine that you go to Starbucks to get a small coffee for 8$. Suddenly you see that the big one costs 2$ more, but significantly more coffee. In this situation, I bet that you will choose the bigger one. 

  More example is when: 

• Upgrade ordinary Guarantee to a gold one
• Buy a 6-month Netflix subscription instead of a 3-month one
• Offer hotel room with a better view
• Selling a double burger with extra cheese instead of a burger
• ….

Why is upselling important? 

According to somu.com, an average of 70-95% of revenue comes from upsells and renewal. Upsells are 68% more affordable than acquiring new customers. In this part, I want to show you 3 important reasons to convince you why you should use upselling.

1. Increase customer retention

The customer will respond to your offer more often. When you upsell a product, you will offer them a better option or service. So, they will return to your site and trust your offer again because they were satisfied with their last purchase.

2. Increase customer lifetime value (CLV)

High CLV = more sales without advertising. 

3. Increase your profit

Imagine that you get 40% revenue from customers each month. Your profit from upselling will be 480% more in one year, perfect, isn’t it?

The difference between upselling and cross-selling

Do you remember the upselling example? I want to say the same example for cross-selling. You go to Starbucks and order an iced latte; then you see cakes on the table that tastes like hazelnuts, chocolate, and coffee. The barista will grab your glance and say,” would you want a piece of cake with your latte?” and you say yes, I would. 

See, as I said, when you buy a product, you buy some complement besides your primary purchase.

 More example is when: 

• Sell frames and glasses beside the phone
• Sell wax polish after selling shoes
• glasses bag after buying glasses
• …

Note: cross-selling is also known as attachment selling because a customer purchasing a primary product will have some extra attachment. For instance, when you buy a laptop, you may buy a mouse with that, which is an attachment.

Uncover upselling tips and best techniques

Now that you get basic information, it’s time to give you some tips that a low percentage of people know:

One # tip: Always keep the 25% rule in mind

When customers come to your website, they have a price range in their mind, so you have to consider their pocket too. For instance, imagine your product costs $50, but your upsell costs $100. In this case, your upsell process will completely fail. Why? Because your upsell is totally out of range.

If your upsell were $75, your chance would be doubled. So remember to have only 25% price upper than the original product. So that they can focus on the upsell offer. 

Remember: don’t upsell on a price alone; you must upgrade the product to something more than the primary product. For example, if your customer chooses the phone with 128GB storage, upsell a phone with 258GB storage with 25% upper price.

#2 tips: Use the rule of three

Would you like to convince more customers to buy more from you? Learn the rule of three options. This technique is the simplest and the most powerful in selling.

Short answer: always have three options on the table. 

Long answer: when you have only:

•  One option, customers, say should I buy this or I should not?
•  But when you have two options, they say, “which one is better for me.”
• And when you have three options, you have more chances to misguide them, so they say, “I think the second one is better.” 

For example: 

When you go to the movie, you have two options: a big pop or small pop. You mostly choose a small one. Why? Because most people like to play safe, they like to pick the one to save more money. 

But at that moment, the seller offered the third pop in medium size with just three more bulks. The price goes like, small pop: 3, medium one: 5, and a large amount of pop for 10$.  When you offer an unreasonable option, you have more chance to distract your customer’s focus on what you want. Imagine that you give them three options; they will choose the 2nd option. Why? Because they think it is more reasonable. 

Research from the University of Minnesota shows that adding an unreasonable third option increases sales.

How this technique works: They offer you the small, something in the middle, and the one limited option. That is called contrast pricing. So in this technique, you are going to: 

• Make the third upsell super-duper that is outrageous, knowing most people wouldn’t go for this.
• Make your small offer so wimpy!
• And then, you have to make your middle option compelling, make it an eye-catching upsell offer, and believe that most people will buy this. 

  #3 tips: Upsell after the purchase

Never crush a client with upsells before they have even completed their checkout. The first reason that customers abandon shopping carts is because of added or increased prices. 

You can reach your customer with email marketing when they buy and leave your website. For example, you can still offer it again by email even if they don’t take your upsell. 

Bonus for you: 

To make that email more attractive, offer free shipping or a small gift on the upgraded product or service.

#4 tips: follow the most viewed, sold, and relevant product

Are you thinking about what you should upsell? Follow the VSR rule: which is viewed, sold, and relevant product.

Our most viewed and sold product is the best social proof and evidence for your customer to buy them. Relevant is the key to successful upselling. For example, if you sell a knife, upsell a knife sharpener. 

#5 tips: limited edition

Let’s say that you are selling a headset gadget, and it is available in black and white color. The upsell technique that you can do is to represent the gold color, which will be 30% more than the white and black ones.

People love it when there is hope and quote exclusive and limited editions where they can charge more. 

# 6 tips: Take smart steps

I must mention that upselling itself won’t work well, and it’s not encouraging because most people know and do it. But a small percentage of people use a professional and intelligent strategy for upselling. 

How can you optimize your upsell?

1. Discount: say: “if you buy B instead of A, I will give you such a discount.”
2. Free shipping
3. A small gift: for example, if you’re upselling a mobile phone, say: “If you buy this, I’ll give you a screen protector and a hands-free bag.”
4. Bundle: You can bundle your product into a package. If you are selling a laptop, you can make a package of a mouse, bag, and coolpad. In this case, adding a discount on the bundle will work better and increase the average order value.

Bonus for you: 

There is a powerful plugin called YITH WOOCOMMERCE PRODUCT BUNDLES, which will help you to do this tip correctly. What can you do with this plugin? You can bundle your product (with the information you get from your buyer) and upsell it with an amazing discount. 

5- A most common mistake when upselling

Since any method can be wrong, you need to know all the problems and mistakes of upselling. You don’t want all your effort to be wasted. Do you? So if you don’t want to miss that 30% of revenue, don’t make these upsell mistakes.

1. Have aggressive upsell

What is an aggressive upsell? Any pushy offer, for example, when you’re offering an upsell every 1 minute Or even upsell at the wrong time. (as we said, you have to upsell after a purchase). 

You should have complete knowledge to know where and how to offer a upsell to get the best result: 

• Should you offer when they are searching? 
• Is your offer to solve their problem? 
• Are you sure that you are now just making as much money from them?
• Does your pop-up appear at a good time? 
• ….

You can only put a small box under the product page, which is not very annoying, so whoever is interested can click on that box to read more details. And the best time for this is when they add a new item to the cart (before a checkout process).

    2. Not have enough information

You must have information about your customers’ needs and upsell product. When you personalized their upsell with the information, you can have a successful upsell.

 You will offer a relevant product to your customer when you know all the information. For example, you are selling laptops. Your customer is trying to find a gaming laptop (as you know it should have lots of options like high-quality graphic card, high ram amount and…), if you don’t know anything about product information you will upsell a laptop which is good for programming or for just doing homework.

Now, because of this mistake, you will not only lose your customer but also the money you will get from that gaming laptop.

When you are offering, you should: 

• Know the categories that you want to upsell 
• Choose on which page should share the upsell product information
• Check if they are relevant
• Add a picture of a upsell product

 67% of customers say images are critical when they want to purchase. A lack of photos will cause upsell failure. 

    3. Hide social proof and customer reviews

You have one free and easy tool to increase your sales: your previous happy customers. Just do what amazon do; it not only shows what people bought but also: 

• What people also looked at
• The people recommended and offer

 4. Not using a plan B

If upselling isn’t working well for you, you can consider down-selling. Remember that it doesn’t mean your product or services are awful when people aren’t buying from you. There are so many reasons that people abandon their carts. One of them is the high price or lack of trust. 

So you can down-sell the product (meaning the price is lower than the primary product) and attract more attention and trust. When they’re closing the purchase page and canceling the purchase. Then you can implement upselling and down-selling.

5. Useless upsell phrases

As much as images affect the customer’s decision, so do phrases. You can add some urgency to make a customer feel FOMO or write powerful words to attract customers. People hate to feel tricked or forced. They don’t want others to make a decision instead of them.

Use a phrase like: 

😍“You may also like” or “the gold recommendation just for you.”

Not 

😐“You’d better choose” or “we’ve selected for you.”

 How to upsell

Now that we learn all the basics about upselling, the best tips, and strategy, let’s implement it on our site. 

1. Track customer’s needs and behavior

The first and foremost step is determining their product’s consumers and industry. 

• What offers do these audiences welcome the most? 
• Is it better with discounts or does it not matter to them? 
• Do they like free shipping?
• By giving a free one-month subscription to the site account? 
• With what?

Check what your customer wants, then find which other product they probably like! (one easy way to do this is to install a woocommerce wishlist plugin so that you can track all information for finding their needs), you can see all of MC Woocommerce Wishlist Plugin Here.

    2. Full knowledge of products and related product chains

In the second step, you should have enough compelling information about your product. You should check what category of products you have in your online shop. Make certain categories according to the knowledge that you get from the customers in the first stage and also based on the nature of the product:

• Which ones can be bundled together
• Which ones can be offered as another product for upsell (related)
• Which can be given as a gift (as a complementary product)
• Which of the following can be an upsell or a cross-sell?

     3. Determine the upselling strategy

Once it is clear what products will be considered for the upselling, you need to determine the strategy of each upsell.

• What can I do to make it more persuasive? Give them a discount? Send it for free?
• What can I do to create urgency for the person? Should I use a count-down timer? Should I limit its duration altogether? Tell them you can see this page only once in your life, and if you close it, it will not be displayed to you when you buy this product.
• For which upsell products should I leave two steps? For which upsell‌ after purchase?

     4. Implement and start A/B testing: 

You should check the items implemented on the site and the bugs removed. Test and control different modes and make sure everything is working properly.

     5. Add follow-up step

You should remind the user of upselling. For example, suppose your strategy is to limit the upsell for a few days. In that case, you should send emails until the last minute and remind the customer of the opportunity. These emails can be automated with your email system.

     6. Calculate the CRO and optimize the upsell

You need to track your upsells during the month and figure out which one works better. Constantly A/B test and make it better. You have to constantly change the situation to create an ideal situation.

Conclusion 

And the words, make sure you automate upselling. If you manually enter your upsell items, it’s impossible to scale and will never adapt to your customer’s browsing behavior.