It’s hard not to think of an upsell in outdated terms — it evokes the classic car salesman tactic and a haggling process that no one enjoys. But, upselling is a powerful tactic to grow average order value for modern ecommerce brands. Getting started with upsells is easy! Here’s what you need to know:
What is upselling in ecommerce?
Upselling is the practice of encouraging a customer to buy a more expensive product or additional product add-ons that increase the total value of their purchase.
How is an upselling different from cross-selling?
While a cross-sell encourages a customer to add more products to their cart, an upsell pushes the customer to add a higher margin product to their cart. Both upselling and cross-selling are techniques designed to increase average order value and customer lifetime value!
However, upselling typically directly increases the profit margin you make on an order, while cross-selling may not change the margin because additional products added to an order may have the same or lower margin than the products already in-cart. Upselling and cross-selling are not mutually exclusive — you can encourage the customer to both add more products and choose higher-value versions of the products they are already planning to purchase!
An upsell example
If your brand sells several tiers of a similar product, an upsell can work well. For example, a mattress brand could use an upsell to convince a customer to upgrade the mattress in their cart from the basic model to the deluxe model.
When to use an upsell
You can incorporate upsells at several points in the customer journey. However, different upsell tactics are better suited to some stages of the journey.
To encourage an upsell pre-purchase, build recommendation modules into your product and category pages. Common locations for upsells are at the bottom of the PDP or in a sidebar.
Add product recommendations to your shopping cart and checkout pages. You can also include recommended products in your abandoned cart emails.
To encourage post-purchase upsells, carefully design and segment your email drip campaigns to incorporate personalized product recommendations.
Upselling best practices
A well-executed upsell recommendation should feel like a personalized suggestion rather than a hacky scam. Make sure to incorporate these best practices and upselling techniques:
Help your customer rationalize a larger purchase by offering incentives like free shipping. Rewards programs that offer discounts on future purchases are also excellent motivators.
Your customer isn’t stupid. Be sure to carefully tailor your product page and item descriptions to communicate the value proposition of the more expensive purchase. Using data-informed personalized suggestions also ensure your customer is likely to find value in the products you are suggesting.
Avoid being pushy. Allow the customer time to decide on their purchase, and make sure to curate recommendations (too many product choices can paralyze a customer). Remember that a customer is unlikely to spend more than 25% above their original planned purchase.
Add language to your product pages like low stock warnings and “most popular” tags to increase your customer’s sense of urgency. Post-purchase, you can add time-limited offers to your post-checkout pages that encourage additional orders within a set time frame.
Canal helps you easily add products to your site from our network of trusted brands that your customers will love. While Canal isn’t strictly for upsells, adding new products to your assortment gives you greater flexibility to grow customer order values. Canal has an easy-to-use upsell function, too, so you can manage your third-party products and upsells in one place.
Ready to get started using upselling techniques in your ecommerce store? Learn more about how Canal can help.