What is Upselling?
Upselling is a sales technique that encourages customers to purchase additional or more expensive versions of a product.
Upselling products often involves suggesting add-ons, larger sizes of a product or products with higher specifications. Upselling can also be beneficial for the customer experience, as encouraging a customer to purchase a larger product, for example, could help them to save money in the long-term which can improve their trust in your brand.
Upselling is often combined with cross-selling techniques. Cross-selling involves suggesting related or complementary products to your customer based on items they are viewing or have previously purchased. Combining these two methods can contribute to increasing sales and average order value.
Benefits of Upselling
There are several advantages to businesses of upselling products. These can include;
Improving customer experience
The nature of upselling gives customers the opportunity to view more products, allowing them to explore and compare their options. This opportunity for comparison can make customers feel as though they have bagged a better deal and that the business is considering their needs as a consumer.
Successful upselling can also improve relationships between business and customer. If a customer had a positive experience previously shopping on your site, they attach value to your products or services and will continue to come back for the same convenient experience.
Improving the average order value
One of the main purposes of upselling is to increase average order value (AOV). Higher AOV means more revenue for your business from fewer customers. Presenting customers with more expensive versions of a product that have additional features or come in larger quantities is an easy way to encourage customers to spend more in each transaction.
Despite these advantages, it is important to keep the customer experience at the forefront when implementing upselling tactics. Poorly executed upselling can make the customer feel pressured to spend more, or overwhelmed by too many options, which can cause them to lose trust in your brand.
Presenting your customer with other product options will not guarantee that they will buy them. Using incentives can increase the success of your upselling tactics.
Incentives could include offering bundle deals, discounts for higher-priced products, or offering free shipping over a certain threshold. Incentivising upselling can increase the likelihood of a sale and higher AOV, and also make the customer feel as though they are getting the best possible deal on their purchase. In turn, this can lead to customer loyalty and boost your conversion rate.
The Propensity Model
The propensity model is used to predict the purchasing behaviour of a customer in the future. This model is based on information about products a customer has previously bought. This data can be analyzed to determine which products may appeal to that customer next.
This predictive model can be used to support upselling tactics, as it allows you to present and upsell more relevant products to that customer. The propensity model determines a score to predict the probability that a customer will purchase a certain product or perform a certain action.
Using this information effectively can allow for a better understanding of your customer’s behaviours and allow you to improve your business’s methods of upselling.
Don’t Be Pushy
It is important to avoid using upselling strategies that could be perceived as pushy or aggressive. Upselling at the wrong time or suggesting irrelevant products to your customer puts you at risk of being perceived as overly pushy.
Commonly, ecommerce stores only present customers with upselling options when they have already decided to make a purchase. This way, the customer feels as though they are being presented with better, cost-effective and relevant products which are offering them an opportunity to see improved value in their purchase.
Using upselling techniques effectively can be highly beneficial for your business and your customers. Upselling offers the opportunity for you to sell more profitable products and can give your customer a tailored and more valuable experience.
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