The Art of Upselling for E-Commerce
When it comes to eCommerce upselling, the old adage rings true: Timing is everything. While upselling can take place at any time during the buying process, choosing the right moment is a delicate dance, and each option comes with its own set of pros and cons.
Businesses in the eCommerce space are at a unique advantage when it comes to upselling. These businesses can leverage subtle techniques that are highly effective.
The data proves that upselling is a no-brainer for online retailers, but how can we perfect this opportunity to maximize ROI? There are three major considerations when it comes to the art of the upsell:
- Where is your customer in the buying cycle and how does their mindset influence your success?
- When should you make an offer?
- What technical upsell strategies are easiest to implement for immediate ROI?
Making the most of the buyer mindset
It is important to remember that when it comes to upselling, the outcome largely depends on the buyer’s mindset at the time. Mike Schultz, president of RAIN Group, outlines four specific types of buyer mindsets. If presented with the right information, two of these are likely to result in a sale and the other two aren’t. While you may not be able to control a buyer’s mindset at a given moment, the beauty of eCommerce is that you do not have to sift through each customer manually to determine where they’re at. Just showcase beneficial offers at the right time, and the decision is theirs.
- Satisfied non-buying mode: A person who is satisfied where they are, despite evidence that a product or service could improve their situation;
- Euphoric non-buying mode: A person who does not perceive they need assistance or solutions; these are the most challenging marketing targets and certainly not the topic of this article.
- Problem-solving buying mode: A person who is seeking out products that offer a solution to an at-hand problem;
- Future-seeking buying mode: A person who is looking for innovative ways to improve their circumstances.
Even though certain customers fall into one of the two “non-buying mode” categories, they have still made their way onto your website for one reason or another. While these prospects may be less likely to convert, using the strategies outlined here can give you the best chance at causing a shift.
For customers who aren’t quite ready to buy, you’re not at a complete loss. In those cases, a “win” looks like getting them to opt into a lead nurturing funnel (but that’s a topic for another day). Today, let’s focus on satisfying “buyers” versus non-buyers.
Choosing the right upselling moment
Typically, eCommerce upsell opportunities present themselves at three specific pivot points:
- on the product page;
- during checkout;
- after the sale is completed.
Each option offers pros and cons depending on your products and your typical buying cycle. If you’d like some expert confirmation or feedback on the upsell timing that fits your business, schedule time on our calendar for a quick, risk-free consultation. But first, here’s an overview of the pros and cons at each stage:
1. Upselling on the product page
This usually entails the creation of a module on the bottom or side of a page, instead of just showcasing the product itself. For example, when Amazon introduced product recommendation upselling in 2012, it saw a 29% sales increase. However, presenting upselling opportunities as customers browse has garnered mixed reviews. The advantage of this approach is that it allows customers to take in information at their own pace, without feeling pressured. But some consider this practice akin to offering a dessert menu before a diner has had the chance to decide on the main course. It’s not impossible that a prospect will oblige to an upsell during the earliest phases of their experience, but exposing them to too much too soon may overwhelm some shoppers. If the person is in a problem-solving or future-seeking buying mode, they are on the hunt for products and services that will better their lives. They can’t buy them if they don’t know they exist, and there is always a chance that customers will shift from a non-buyer to buyer mindset as options are presented to them. Additionally, this stage is controversial because while the buyer mindset may be ripe for making a purchase, they have not entered full-fledged spending mode yet. Presenting additional options heightens the likelihood of indecision and ultimately may lead to cart abandonment.
2. Upselling during the checkout process
Did you know the average U.S. consumer spends $5,400 per year on spontaneous purchases? A lot of this happens during checkout, once a customer reaches “spending mode.” Here, they have pulled out their wallet and are preparing to cross the finish line. We see this all the time in brick-and-mortar stores, where items are strategically placed around checkout counters. Because customers are ready to purchase, it can make a lot of sense to center your upselling strategy around this phase. The impulse-buying phenomenon is more likely to kick in when customers see upgraded or complementary products presented to them on the checkout page. This is especially true when they perceive added value for the money spent. In fact, a majority of survey respondents — 85% — said impulse purchases center around taking advantage of a great deal or discount. If a shopper perceives they can gain a lot for spending just a little more, the chances of conversion increase. That’s why you must be mindful not only about when you are upselling but also about the cost of the products being presented. We touch on this more in our previous blog post, where we discuss leveraging buy-one-get-one (BOGO) deals and other discounts as an upselling strategy. Ecommerce influencer Neil Patel also offers some basic pricing guidelines when it comes to presenting upsell items to customers. He uses Apple as an example. In this case, it would be a wasted effort for them to attempt an upsell from a $329 base model iPad to a $2,500 iMac computer. Due to the drastic difference in price and features, the chances of conversion are slim to none. Rather, Patel suggests offering a more comparable model. The smaller difference in price reduces the friction of spending more money on the more expensive, sophisticated option. Additionally, features on these models will likely be more closely aligned, limiting the variables that influence a customer’s decision. In this case, offering to upgrade the customer from a $329 base to an iPad air for $499 would be a much more sensible and strategic option.
3. Upselling post-checkout
In an interview with Forbes, Patel expressed that he experiences the most success upselling after the original purchase is completed. While it goes against the “strike while the iron is hot” mentality, upselling to a customer post-checkout is another strategy some businesses find lucrative.
A seller can present these options in multiple ways. A post-transaction upsell can be as simple as offering a few products directly after the buy button is clicked. Another great opportunity is in a customer’s email receipt. You may even opt to include a coupon code with an expiration date. This improves the likelihood that the customer will take immediate action, either spending more themselves or sharing the deal with someone they care about.
Sometimes the most strategic post-checkout upsell is days, weeks or even months later. depending on the nature of what you’re selling. For example, in the SaaS industry, growth Specialist Emily Smith says it makes sense to upsell after your customer has had the opportunity to hit success milestones. This can come after they have completed the onboarding process and spent more time getting to know your product.
Don’t be afraid to experiment
Although a strategy recommended for larger companies that have a high transaction volume, running A-B tests could be the key for knowing the exact right time to upsell for your business. Try running a three-week test, presenting the upsell opportunity at different times each week. Measure the results and tweak as necessary.
Another experiment you can consider is playing with the wording of your upsell messaging. Rather than using the typical “those who bought this also bought that” language, try changing the language to something like “Add Extras.” This wording signals the customer to explore accompanying items that will make their purchase feel more complete. You might also consider using the terms:
- Special Offers;
- Picked Just for You;
- Get it While it Lasts;
- Bundle and Save;
- Other Customers Enjoyed.
Don’t limit yourself to these options. Consider the products that you sell and the mindset of your buyer. Consider how the upsell fits into their decision, and don’t be afraid to use their own words. If you’re unsure about what words to use, or you just want to bounce ideas off of someone, remember that we’re always here to help.
Why choosing the right eCommerce platform matters
Thus far we’ve covered your buyer’s mindset, the timing of your offer and even adjusting some of the words that you use to make an offer. The most underutilized option that makes the most dramatic impact is utilizing the right technology for your online store. Your online business can only be as good as the functionality of your eCommerce platform. Choosing the right platform equates to the difference between operating a lemonade stand versus a Fortune 500 company. One may meet your needs when you are in the elementary stages of your business, but it is important to choose a platform that grows with you. If you don’t, a bottleneck will present itself as you expand, forcing you to endure a cumbersome migration. For businesses that anticipate any level of growth, we recommend choosing a platform that works from your first sale up to millions in revenue. Our first choice is the Magento eCommerce platform. Magento makes sense for several reasons. We outline them in-depth in our previous blog post, but in short Magento offers:
- Open, flexible architecture;
- Abundant, built-in customization options;
- Flexible pricing to serve merchants of all sizes (including free!);
- Enterprise-level security & functionality;
- Free, comprehensive training through Magento U;
- Thousands of plugins that expand on the platform’s already outstanding capabilities.
One of the most appealing attributes of Magento is that it is owned by Adobe. With a forward-thinking tech giant in the driver’s seat, expectations are high for ongoing advancements, and one of the most recent directly relates to upselling. Powered by Adobe’s proprietary Artificial Intelligence (AI) engine, Adobe Sensei, product recommendations in Magento have been taken to a whole new level. At the first-ever Adobe Summit digital experience, which was unveiled on March 31, 2020, Adobe announced its roll-out of AI-powered product recommendations. Merchants can customize where on the site the recommendations appear, and there are three types of modules to choose from:
- Most popular;
- Customers who viewed this also viewed that;
- Customers who bought this also bought that.
With the eCommerce industry’s top competitors, the best upsell plug-ins only allow merchants to manually add upsell items per product. This means each time you add a new product you need to manually add it to complementary product pages, and vice versa. Alternatively in Magento an advanced AI algorithm displays unique and relevant items guided by real-time customer shopping metrics that are compatible with a customer’s likelihood to convert. Magento is also using AI-powered upselling tactics in its out-of-the-box chatbot powered by Dotdigital. As of the Magento 2.3.4 release, the chat feature offers the potential to recommend complementary products to a previous purchase and upsell customers to different products (in case their favorite is out-of-stock). Magento offers an unparalleled toolbox of eCommerce resources for online merchants. If you’re ready to learn about ways the platform can help position your business for growth and higher profits, schedule time on our calendar to begin a complimentary, risk-free conversation with one of our Magento experts.
After reading this article, we hope you have a better grasp on the role the buyer mindset, timing, technical strategies and choosing the right eCommerce platform play when it comes to successful upselling. There are many elements to consider when implementing upselling into your business, and the payoff can be well worth the effort when done strategically.
While upselling is an effective eCommerce tool, it is only one piece of a well-rounded business strategy. Tapping into recurring revenue streams and automating business systems can also reduce friction and help supercharge your sales. If you need guidance on putting together a well-rounded, results-driven business strategy, schedule time on our calendar for a risk-free complimentary brainstorming session with one of our eCommerce experts.