Definition: An upsell is a marketing technique that businesses use to suggest an incremental purchase from a customer for an additional fee.
Retailers and businesses use this strategy to increase sales and maximize profits.
This method is very effective in persuading people to purchase more than they originally intended.
An upsell can also be when a customer wants to purchase an additional product or service that’s better.
It’s not just limited to eCommerce sites either; it can be used for any type of business that sells physical goods.
Stores sometimes use this strategy to offer much more than just an additional product.
They’ll offer extra services or even push customers into making purchases that are more expensive than the initial product.
Why do we upsell?
Upselling is important for both the customer and the company.
When done strategically, it can be an effective way to increase revenue.
Not only does upselling help businesses make more money, but it can also improve customer service by showing them other items or products they may need.
For customers, upselling can provide convenience by making it easier to purchase all items that they need in one location.
This strategy helps increase the average order value, as well as increase customer satisfaction by giving them more options.
What is an example of upselling?
Upselling simply encourages customers to buy the next expensive item in the product line, upscaling an order, or offering add-ons – all while they are standing at the counter and before they have completed their purchase.
For example, if someone buys a medium-sized drink, the salesperson may ask if they would like to upgrade their drink to large by paying an additional fee.
Another example is offering an extended warranty on products.
If you sell computers, it’s common practice to offer extended warranties as part of your service package.
The customer pays extra money upfront and gets a 5-year warranty on the product instead of the usual one-year warranty.
Are upselling and cross-selling the same?
Upselling and cross-selling are fairly similar, however, they do have a few differences.
Upselling is a sales tactic that involves persuading customers to purchase a more expensive item from their original set of choices.
Meanwhile, cross-selling aims to increase the number of items purchased by offering complementary products or services.
Both terms can be applied when you’re trying to sell more than just one product at once.
What is an upsell page?
Upsell pages are often used in eCommerce settings where the customer adds an item to their cart or before hitting the checkout button.
This page is designed to entice users to a better offer that usually costs more than the initial product.
The goal of this page is to sell additional products or services when the customer is most inclined to buy.
They are often used in conjunction with purchase pages but can also be found on product pages, checkout pages, and landing pages.
What are different upselling strategies?
Upselling has become a much more common practice in almost all types of businesses.
The strategies may sometimes vary depending on the product and industry you’re in.
However, the concepts are still the same and these are the most common ones used by businesses nowadays:
Offering free shipping
Offering free shipping for orders over $100 can be considered as upselling because it adds another product to the order without being directly connected with the initial purchase.
Consumers are more likely to buy more from you to reach the minimum amount and avail of the free shipping offer
When someone purchases something at an online store, they will often receive an email with upsells within two hours of clicking “checkout” that offers them related products.
The key here is to make sure you are offering your customers relevant information about what they might want next.
Creating a sense of urgency
When you’re able to create that sense of urgency, it can lead to an increase in conversion rates for your upsells.
This is because people are often willing to make purchases when an offer is only available for a limited time.
Offering substitute products
If the product they’re interested in isn’t available in the first place, then offering them a similar alternative that’s more expensive may entice them into buying.
This could include selling them a different size/color etc.
Using social proof
Using social proof to show that other consumers have purchased the product is a very effective technique for businesses to increase sales.
Giving someone an idea that others are enjoying your product can be an effective way to encourage them to buy.
How do you upsell in retail?
Retailers often utilize upselling as a tool to generate higher profits and increase customer satisfaction with the store.
It is done by offering customers a better version of the product that usually costs more than the initial product.
This process of persuasion is one of the most underrated sales techniques used today.
But it can be incredibly effective for retailers who are aware of their customers’ needs.« Back to Glossary Index