How to upsell like a pro: Top strategies to boost average order value

A great upselling strategy will raise your average order value to help you generate more revenue from each customer.

But it’s more than just boosting your bottom line.

An excellent strategy also makes customers aware of better options they may not have known about. This is a great way to ensure customers find out about the potential upgrades available on your store. Because otherwise, they might have been lured away by competitors promoting similar options.

But, at the same time, we’re all too familiar with how it feels when a salesperson pressures you into spending more on a product you don’t need. This is annoying and can push you away.

That’s why upselling must be done strategically. In this article, we’ll show you how to upsell correctly and share some practical examples of brands killing it with remarkable upselling strategies.

What is upselling?

Upselling is a sales and marketing technique where you encourage the customer to spend more and get an upgraded or higher-end version of a product they have selected.

Think about the last time you went to a coffee shop and ordered a medium latte, but the barista asked if you wanted to upgrade it to a large one for just 50 cents extra. That’s a classic example of upselling.

Upselling can also involve suggesting extra add-ons to go with what the customer is buying. For example, Apple will ask if you want to add AppleCare+ Coverage for an extra $11.99/mo to protect your product.

One of the worst things you could do as a salesperson or marketer is look at upselling as an opportunity to increase sales. Yes, upselling presents a remarkable opportunity to boost revenue. But unless the upsell is sensible and provides actual value to the customer, your efforts are only likely to annoy and push them away from your store.

The best upselling strategy presents a win-win solution to both the customer and your brand.

The customer gets to learn about and purchase a similar but more expensive product that will deliver more value to them. On the other hand, you get to delight your customers by presenting a better alternative, all while increasing your order value in the process.

How is upselling different from cross-selling?

Upselling is different from cross-selling in that while upselling encourages customers to spend more on a premium version of the same product, cross-selling promotes complementary products that go with the item the customer is buying.

For example, in the coffee shop example we shared earlier, the barista could suggest buying a pastry to go with your coffee.

Meanwhile, you’ll see eCommerce stores include a section on “Frequently Bought Together With” when you add items to your cart. This section will typically show complementary products that align with the item you want to buy.

For example, you’ll add a Foundation to your Sephora cart, and you’ll see them suggest related or complementary items like a foundation brush.

Both upselling and cross-selling techniques allow you to increase the average order value while enhancing the customer experience by presenting valuable products.

Benefits of upselling

So, why should online brands bother altering their websites and checkout processes to upsell? Here are three major reasons.

• Easier to implement for existing customers

It’s easier to sell to an existing customer than a new one. Existing customers already know about your brand and probably trust it. That’s why they’re buying from you.

For that reason, it’s so much easier to upsell to existing customers who are trying to buy from you. They already trust your brand, so your personalized recommendations will be taken seriously. This presents a relatively easy opportunity for sales teams to meet their targets by increasing revenue from the same number of conversions.

• Adds value to customer purchases

As mentioned earlier, a well-executed upsell strategy adds value to customers. This is especially true when you understand your customers and their pain points.

Those insights will allow you to recommend the right products likely to benefit the customer in the long run. For example, instead of proceeding with the item they have in the cart, you can present a premium product showing how it aligns with their needs.

So, yes, they’ll indeed spend more, but it’s on an item that actually meets their needs better. This boosts customer satisfaction and can even enhance loyalty. Customers will see that “this brand just gets me,” and this drives more repeat purchases.

But, of course, you must understand your customers and recommend the right products for that to happen. We’ll talk more about this in a bit.

• Increases average order value

Finally, upselling will inevitably increase average order value. This is the reward you get for analyzing your customers, understanding their needs, and recommending the right upgrades at the right time.

Reports show that upselling can increase the customer lifetime value by 20 to 40%. Also, 72% of marketing teams use upselling and cross-selling to generate 30% of their revenue.

When to upsell

A great upselling strategy starts by identifying when you should suggest the premium product. Make your recommendation too early, and you risk getting the customer annoyed. This could even result in them abandoning their cart.

At the same time, you don’t want to wait until it’s too late and the customer has already settled for a specific product.

So, here are three periods when to upsell and how to do it.

1. Before sale

You can upsell your products while the customer is still adding items to their cart. This is one of the most common upselling strategies.

Typically, you’ll see comparison tables or charts when you add items to your cart. These charts will show how the suggested product is better than the one you’re currently buying.

You can also use this time to promote relevant product add-ons. For example, ProFlowers suggests some extra items that would “Make Your Gift Extra Special.”

It’s the equivalent of a salesperson talking you through a premium version of a product when you’re still in the shopping aisles of a brick-and-mortar store.

Some physical stores would also upsell products by placing premium alternatives right next to cheap items on the shelf.

2. During checkout

This is a great place to upsell because the customer has already added specific items to their cart, so you understand what exactly it is they’re interested in. You simply suggest similar but more premium items to what they have.

However, you don’t want to create a big distraction here. Your suggestion must be very specific and outline the benefits clearly. Too many distractions at this point can hurt the entire checkout process and possibly increase cart abandonment.

For example, when you click View Cart while checking out on Away Travel, you’ll see a product bundle suggestion as shown below.

Product bundling is one of the most effective upselling techniques. We’ll discuss it below. And although this Away Travel example is more of a cross-sell, you can still do something similar to recommend premium products or extra add-ons.

3. After sale

Upselling can happen at any stage of the customer lifecycle, including after the sale. However, this is most common with SaaS or software businesses, where they may promote discounted upgrades once a customer has signed up for a paid plan.

Ecommerce businesses can also do upselling and cross-selling after a sale through email marketing. In your order confirmation email, you could include a section on an add-on or complementary product that could enhance the customer’s experience.

That’s what this brand does.

You can also use the thank-you page to upsell after the purchase.

Top upselling strategies to maximize revenue

You’ve seen when upselling should be done. Next, let’s look at how you should upsell.

1. Provide reasonable alternatives

Suggesting reasonable alternatives is one of the best ways to ensure your upsell efforts yield results.

But, what exactly does that mean?

First, the product you suggest must be similar to what the buyer is already engaging with. It must help the buyer achieve their intended goal much better or more efficiently.

You must be able to explain the additional value of that product to justify why it costs more and why the customer must consider it.

Secondly, the price difference between the product the customer is buying and what you suggest must be reasonable.

Let’s assume you have a software product with three different plans. You have a basic package going for around $9.99, a pro plan for $19.99, and an enterprise plan with custom pricing that typically starts at hundreds of dollars.

If someone is trying to complete a purchase for the basic $9.99 package, it would make no sense to suggest the enterprise plan. The difference (both in pricing and features) between the two plans is too steep.

Even your pitch for the product will likely come off as inauthentic.

You will likely see more success upselling the buyer to the second plan. The reasonable price difference will motivate customers to consider the upgrade.

Similarly, ecommerce business owners must keep a close eye on the products they’re recommending. The recommended upgrade must fit the customer’s needs, and the price difference must also be reasonable. This builds consumer trust and makes them feel they’re still in control of the purchasing process.

2. Offer attractive bundles

Bundling is a popular sales technique that combines upselling and cross-selling. With bundling, you combine products that work together and offer them at a discounted price. The total price tag becomes lower than what the customer would spend if they bought each item separately.

Therefore, one of the best ways to increase the appeal of your upsell is to suggest a premium product as part of a bigger package. So you would tell the customer why the suggested item is a better purchase than what they’re currently considering.

On top of that, you’ll explain how they’re getting an even better deal by buying the complementary products.

This strategy can help you increase your average order value significantly, while still delivering value to your customers by giving them all the items they need for a good user experience.

It’s what Away Travel does, giving customers an opportunity to save $50 off any bag and suitcase combo.

This is one of those techniques you must test to make sure you’re not alienating customers. It’s especially essential when dealing with a price-sensitive item or target audience.

That’s because the bundle will likely cost significantly more than what the customer was ready to spend on the one product. So run A/B tests to confirm how many people take up your offer. You may also want to test different product combinations to see what works best with your audience.

We’ll discuss these tests in detail later.

3. Pop-ups with special offers

Pop-ups with special offers are another incredible way to present your upsells. The idea here is to create a pop-up showing customers the premium product available to them.

This pop-up will include some copy explaining the benefits of this upgrade. It can even go as far as putting the two items side by side to show buyers why they’ll be settling for less if they complete the purchase with the current product instead of the suggested upgrade.

Huel, for example, runs cross-selling campaigns delivered through pop-ups when a customer adds items to their cart.

Pro tip: Make sure the offer or discount is only available through the upsell. This increases the perceived value of that offer. Potential customers should not be able to access the same discount on your website.

4. Subscription selling

This option is only available to brands that sell products that must be bought regularly. It’s a clever upselling technique because even though it may result in a lower initial sale, it guarantees future repeat purchases, which will eventually result in a higher customer lifetime value.

Plus, it’s a great way to boost customer retention.

To upsell a user to a subscription package, you basically offer the customer the same product at a cheaper price if they sign up to buy and have the items shipped automatically at given intervals. For example, the items could be shipped every fortnight or monthly.

Good examples of products that would work well with a subscription model include personal grooming items like razors, supplements like protein powders, meal kits, pet supplies, and even some skincare products.

Check this out:

Petco offers 35% off the first order and a 5% off all future orders if the customer opts for a repeat delivery instead of a one-time purchase. This essentially converts a standard eCommerce brand into a subscription business model.

5. Use the thank-you page

Finally, you can upsell on the thank-you page displayed after the customer has completed their purchase.

One of the best things about upselling on the thank-you page is that you are not risking losing the purchase entirely. As mentioned earlier, a poorly executed upsell can result in decision fatigue and scare off the customer. Customers can end up abandoning their cart altogether.

But you won’t have to worry about any of that if you wait until the thank-you page. The customer has already completed the purchase.

Now, of course, the customer may already be set for the item they bought. That means your upselling efforts will likely struggle here unless the upgrade promises immense value.

Alternatively, you can use this page to suggest add-ons that the customer could benefit from. For example, you could promote warranties and even cross-sell related products.

Examples of great upselling techniques

Here are three upselling campaigns we found really interesting.

1. Huel

Huel is a meal replacement brand with an impressive upselling strategy. They use various channels, including the product page and emails, to cross-promote and upsell items.

Source

But what we liked the most about their upselling campaigns was the subscription package. This option promises a 20% discount on all recurring subscriptions.

And they promote this option both on the product pages and during checkout.

Notice that the terms of this upsell are very clear on the product page. New customers are told how they can easily swap or skip deliveries and are free to cancel at any time. Plus, frequency is not predetermined. Buyers can choose from four different options. This is an incredible way to boost customer confidence and reassure them they’re in the driver’s seat.

2. The Ordinary

The Ordinary is a popular beauty brand with a simple but well-executed upselling strategy.

Like Huel, they also offer a subscription option where you can save 10% and get free shipping. You also get to choose how often you want to receive your package.

Clearly, upselling doesn’t have to be sophisticated.

3. Chewy

Chewy is a popular pet food supplier based in the US. The company employs several upselling techniques.

First, you have a subscription option, which has become really popular in the eCommerce industry.

In addition to that, they also provide discounted product bundling options.

Upselling best practices

Follow these six best practices to create an effective upselling strategy.

• Focus on the customer’s needs

Customer needs should be at the center of your upselling strategy.

Don’t focus on just increasing the value of each sale to line your pockets. This will only result in unreasonable upgrade suggestions that will push your customers away.

Instead, lean into customer data analytics to understand what your customers really want. What issues or pain points are they struggling with? What do they hope to achieve with the product they’re trying to buy?

The answers to these questions will help you understand your customer’s goals and how to best meet them. You’ll know what product upgrades will resonate with them. Even more important, you’ll know how to make the suggestions, i.e., what benefits you should point out to explain why the upgrade is a no-brainer. This results in better customer relationships overall.

So, analyze your existing customer database and track purchase history/behavior, and how users interact with your online store. It may also pay to interview your customers directly through website and email surveys, as well as social media polls, to understand their needs.

• Personalize

An estimated 40% of consumers have bought a more expensive product because of a personalized customer experience. 49% of consumers have also made an impulse buy because of a personalized recommendation.

That’s the power of personalization.

Use the data from your audience research above to deliver personalized recommendations and offers. Marketing automation platforms like GetResponse make this process even easier because they can track user behavior to see which products customers interact with. This allows you to deliver tailored offers for both upselling and cross-selling.

• Create a sense of urgency

Crazy offers are a great way to nudge customers into buying a more expensive product. But your offers will become even more powerful when customers realize that this offer is only available for a limited time.

This creates a sense of urgency and increases the perceived value of the offer. As a result, customers are likely to claim the offer much faster and complete the purchase.

Therefore, take advantage of FOMO-inducing elements like countdown timers and showing limited stocks. You can also adjust the copy to reflect that the offer will not last forever.

• Don’t be pushy

Upselling is supposed to enhance the customer experience. Being pushy and pressuring customers with your upsell will achieve anything but that.

Therefore, make it really easy for customers to say no to your offer if they’re not interested. If you’re using a pop-up, the option to cancel it should be visible and easily accessible to customers.

In addition to that, do not oversell your upsell. We mentioned that you could upsell the customer before the sale, during checkout, and after checkout. Don’t use all those options at once on the same customer.

This will come off as being pushy.

Can you imagine going to the store and a salesperson kept pushing an upgrade to you while you’re picking an item on the shelf, follows you to the cash register, and even in the parking lot?

That would drive you nuts. Don’t do the same thing to your customers.

• Don’t get greedy

We mentioned earlier that you must suggest reasonable alternatives that do not result in a significant jump in pricing.

Use the 25% rule to guide you here, i.e., the suggested product should not increase the cart value by more than 25%.

• Test your strategies

Lastly, test your strategies to see what upselling techniques work with your audience.

Start by testing where to upsell. So, run split tests to see whether you’ll get the highest conversions when upselling at the product page, checkout page, or thank you page.

The other thing you must test is the incentive included. By how much should you discount the suggested upgrade to optimize uptake? Do you need additional incentives like free shipping or extended warranty to increase the conversion rate of your upsells?

Finally, test your upsell copy. Try including social proof elements like customer reviews to see if that’ll drive uptake. You can also test different FOMO techniques to see which produces the best results.

Test your upselling strategies continuously to ensure you’re getting maximum ROI for your efforts. And remember to test one crucial element at a time, so you can pinpoint what variables are moving the needle.

In closing

The key to successful upselling is understanding your customer’s needs and meeting those needs with reasonable product recommendations. Once you’ve mastered that, the rest of the strategy will involve testing and adjusting as you go.

So you can test when to upsell (before, during, or after checkout) and the incentives that’ll boost sales. Do that and you’ll see significant growth in both customer satisfaction and your average order values.