What is upselling?
Upselling is a sales tactic that offers customers a personalized product recommendation, based on their intended purchase, that provides more benefits for a price increase. Typically, the primary goal of upsells is to increase average order value, revenue, and customer lifetime value for ecommerce businesses. However, companies can also use upselling to increase buyers’ satisfaction, boost customer engagement, and increase brand loyalty.
An upsell is most effective when targeted toward existing customers with faith in your brand. Due to the relationship-based nature of the repeat purchases they offer, subscription businesses are uniquely suited for upselling opportunities.
The difference between upselling and cross-selling
Upselling and cross-selling are both important sales techniques for increasing AOV and customer LTV for ecommerce businesses. Both upselling and cross-selling recommendations have the potential to streamline the shopping experience for customers, and both should be highly customized to fit shoppers’ needs. However, while an upsell aims to convince customers to purchase higher-quality products or services at a higher cost (upgrades), a cross-sell aims to add related products or services (add-ons) to a customer’s order.
Upsell strategies for ecommerce businesses
Merchants can offer upsell opportunities on an individual product page or customized cart page, via pop-ups or follow-up emails, and even on the customer portal. Tailoring these product recommendations as much as possible to fit the customer via product recommendation quizzes, customer data, and analytics increases the probability of an effective upsell. Being upfront about the value propositions of a product upgrade is also important, with supplemental educational materials if customers are newer to the offering to improve the customer experience.