Upselling involves selling a higher-priced or upgraded version of the initial product the customer intends to purchase. This technique is used to increase profit and average order value (AOV) by providing a more expensive product.
For instance, fast food restaurants often use upselling to suggest meal upgrades with larger portions or additional toppings for an extra fee. Another example from the beauty industry is showcasing more convenient and budget-friendly upsized options after a customer adds a face cream to their basket.
However, it’s important to strike a balance between providing relevant and beneficial upsell options and avoiding being too pushy. Correctly executed upselling not only increases profit, but also benefits customers by offering an improved product. Poorly executed upselling, on the other hand, can lead to negative customer experiences and lost sales.
When upselling online, businesses must pay attention to several key factors:
- Relevance: They need to ensure that the upsell offer is relevant and beneficial to the customer. This means analysing the customer’s purchase history and browsing behavior to suggest relevant and personalised upsell options.
- Timing: The upsell offer should be presented at the right time and in the right way to avoid being intrusive. For example, offering an upsell during the checkout process can be an effective strategy as the customer is already in a purchasing mindset.
- User experience: Businesses should avoid offering too many upsell options, which can overwhelm or confuse customers.
- Analytics: It’s important to monitor and analyse the results of upselling strategies to identify what works and what doesn’t, and adjust accordingly to optimise revenue and customer experience.