Upselling 101: How to increase your AOV
Upselling is a great way to increase your AOV (average order value). In the big picture, upsells are undeniably a foundation of a profitable e-commerce store. To get a grasp of the whole upselling thing, you just need the basics from this article and then some hands-on experience. So let’s take a look at what’s cross-sell, down-sell, the difference between true upsell and cross-sell, and some more stuff.
Upselling vs. cross-selling
Let’s begin with a common misconception, if you hear somebody use word upsell, they mostly mean everything that increases your AOV, doesn’t matter if it’s cross-selling, bundle or true upsell. We can state an example, for every one of them so you’ll have a general idea.
True upsell/ Upgrade:
If your customer selects a 64GB iPhone, you can offer him 128GB instead, for just a few bucks more. All in all, the upsell is when you offer a product with a higher value as an upgrade. If he chooses the superior one, the product with a lower price would be replaced in his cart. This tactic is also very often used to sell a longer period of subscription for smaller “monthly” prices. Try out how it works in our CandyRack preview store.
Again, a great way to increase AOV, however, this time with a relevant complementary product. If you sell remote controls, you could offer batteries, if smartphones, you could typically go with protective cases or headphones. What’s more, you can even cross-sell services like extended warranty, gift packaging, or even gift cards. If you are wondering how to get some money out of gift cards, check out The Ultimate Guide to Gift Cards on Shopify.
- Bundle or frequently bought together is actually a type of a cross-sell when you offer a combination of products as a bundle for a better price. You could’ve already seen this type of cross-selling on Amazon.
The main idea of down-selling is to get your customer to convert, even with smaller order value, when he would normally choose not to buy. You can either propose a discount on the same product, offer cheaper and better-converting product, or add some value to the product he was considering to purchase.
A great example of down-selling is exit offer for software products. Let’s say you sell monthly subscriptions for online yoga classes. When your customer wants to abandon the cart with 3 months subscription, you can offer him 1+2 months free. You won’t lose your money, because he probably wouldn’t buy anyway and you’ll get some extra revenue. Also, what’s even more interesting, you’ll have an active customer for the next 6 months to whom you can upsell anytime.
Another question is when to trigger the upsell or cross-sell:
Choosing the right time, to trigger the upsell proposal for every product, could be tricky, but let’s be honest the best way is to test it out. Here are some examples that could inspire you:
Cross-sold products and services are either directly on the product page or they are triggered by add to cart button. The most efficient method is to use checkboxes or pop up windows. Classical product page upsells (“frequently bought with” listed somewhere below the product) usually don’t convert that well.
- Cart upsell/ cross-sell is an excellent choice when you have too many products with low value, which can’t be upsold individually. Some products work best if you try to upsell them in the cart, for example, subscription-based complementary products like an interesting newsletter for your niche, or services like premium shipping, incognito parcel, etc.
- Post-purchase upsell is great because you don’t risk anything after the payment and your customer is still in buyer’s fewer. Here you can offer a service, for example, gift packaging. It’s great to add some smaller complementary products. You can also use a cross-sell offer with the same product, but with a discount and enhanced social pressure within the copy(1+1 type of deal). Pop-ups work post-purchase because the pop-up creates a sense of urgency. Lastly, upsells after checkout can be effective only if you use one-click payment. It doesn’t matter how you make it work, but if the customers have to type in their payment info again, it’s just a terrible experience, and they probably won’t buy.
- Exit offer is the opposite situation than the post-purchase. You probably lost this customer, but you have one last chance to give him something interesting. But firstly, do your math, if your users need more visits to buy something and they tend to spend more time on your page, try something else first. On the other hand, if you have a significant bounce rate, let’s test the exit offer. Try to find something that will catch your customer’s attention and work with their LTV too. Sometimes it’s better to catch that customer, even if the revenue is not so big at first. Pop-ups work with exit offer the same way as in post-purchase upselling, which means that they bring a sense of urgency. This is the right time to push, so don’t be afraid to test out more aggressive communication.
Top apps for upselling
Bold Upsell by Bold (from $9.99 per month) — Probably the most notorious upsell on the Shopify App Store. Allows you to offer upsells/cross-sells on the product page, cart page, or post-purchase. Supports multiple offers, discounting, free gifts, and other types.
Discounted Upsells by Booster Apps (from $19.99 per month) — It allows you to create an in-cart pop-up to cross-sell additional products with a discount. Simple UI and setup, effective way of upselling.
Exit Pop Ups & Email Pop Ups by Optinmonster (from $49 per month) — Great for exit offers and gives you an opportunity for some marketing workarounds. If you’ll find more use of it, the price will be modest.
Guest Post by Digismoothie
Peter Galbavy, E-commerce and Marketing specialist, Digismoothie We are Shopify experts in upselling. Our ultimate mission is to help merchants grow their businesses using our apps.