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Would you like to sell more products to your customers and increase your sales revenue?
If yes, you'll need to master upselling and downselling techniques.
In this guide, we’ll show you how to leverage these tactics to increase your sales and profits.
Let’s get started!
The primary goal of every business is to maximize its profit.
One of the most effective ways to do this is by increasing your average order value.
This is where upsells and downsells enter the game that is marketing.
Upsells and downsells are similar in that both are geared towards offering a beneficial product to customers to increase the current order value.
Here’s a quick depiction illustrating how upsells and downsells work together in a sales funnel:
Even though upsells and downsells are used in similar situations they’re dissimilar.
Simply put, upselling is the process of offering your customer a superior and more expensive product than they were initially interested in.
Let’s take a look at an example of upselling:
Imagine going to a café and thinking about getting a medium cup of coffee for $6.
But then, you see, the large cup of coffee is selling for only $8. The cup size is significantly larger, and there’s only a $2 difference.
As a result, you think that the larger cup has a higher perceived value than what you’re paying for it.
When it’s time to make a decision, you pick the larger cup of coffee — This is upselling!
The best time to use upsells is when:
When implemented at the right moment, upsells can boost order value, customer lifetime value, and revenue.
Downselling is when you offer a cheaper, alternative product to the initial purchase product if the customer seems hesitant to complete the transaction.
Let’s take a look at an example of downselling:
Keeping it in the café, imagine there are 2 special offers in front of you:
1. A medium coffee with a large slice of chocolate cake for $14
2. A medium coffee with 4 small blocks of chocolate for $8
There’s no difference in the coffee cup size, and you still get a sweet treat.
You choose the cheaper option, as you feel the first offer is too expensive for what you’re getting in return.
Note: It might sound a bit counter-intuitive, however, you have to consider situations where a customer simply doesn’t have enough money to purchase the more expensive offer.
The best time to use downsells is when:
Additionally, you can use downsells paired with high-priced products to get more sales by offering discounts, unpaid trial periods, free shipping, one-time deals, and other price-reduction techniques.
If executed correctly, your downsells can turn hesitant prospects into paying customers, and new customers into loyal customers.
So far, we’ve taken a look at some common, day-to-day situations where these sales techniques are used, but let’s see how they can benefit your business.
Both upselling and downselling are essential sales techniques to boost the bottom line (or net income) of your business — How exactly?
Here are some advantages of upselling:
1. Increases revenue
When upsells are implemented correctly, they can create a higher profit margin for your business.
A successful upsell strategy should be able to convince a customer to purchase a higher-priced product, which ultimately increases the sales value of each transaction.
2. Boosts customer satisfaction
Upsell products tend to offer your customers more benefits, which then boosts the satisfaction and happiness that customers get from using your product.
Some online platforms offer basic and premium versions for the use of their tools.
Although the basic version is good, the premium version generally offers more advanced features and capabilities.
More benefits = satisfied customers.
3. Strengthens customer relationships
Bolstering your customer satisfaction by selling a premium product is an exceptional way to strengthen your relationship with your customers and earn their loyalty.
A strong customer-business relationship can make future upselling easier since loyal customers are more open to paying more for your expensive products.
Additionally, upselling can add value to the lives of your customers, increase customer lifetime value, and increase brand loyalty at the same time.
4. Improves ROI
Upselling is one of the best methods for increasing your return on investment (ROI).
Acquiring new customers isn’t easy and can be a costly undertaking.
Upselling to your customers will allow you to see a profit quickly and boost your ROI.
Here are some advantages of upselling:
1. Grows your customer base
One of the primary goals of downselling is to acquire new customers.
People are often hesitant to spend a lot of money on products, especially when they’re new.
However, if your business sells a cheaper product as an alternative, it helps persuade them to make a purchase.
2. Increases conversion rate
Pricing is an important factor in the purchasing decision.
When you offer cheaper alternatives, you create a clear pathway to getting customers to buy and, therefore, increase your conversion rate.
Different businesses use different ways of implementing downsells.
Some offer related products at a lower price, while others offer discounts or free trial periods to cater to budget-conscious customers.
This helps close sales and strengthens customers’ relationships with your business.
3. Enhances customer lifetime value
Customer loyalty is crucial for any business. In fact, according to research, 65% of your sales will come from existing customers.
Although downselling might seem counterintuitive, it’s a good way to boost customer trust and loyalty — How?
Offering products that are affordable and offer excellent value demonstrates your understanding of the budgetary constraints your consumers face.
This way, the customer's needs are acknowledged, and they’ll be more likely to do business with you (now and in the future).
We’ve already discussed the benefits of upsells and downsells, but marketers must tread carefully when implementing these sales techniques.
Here, we’ve compiled a list of best practices (with examples) for each technique.
Want to learn more about how to use upselling techniques in your online business?
Here are 4 examples from which you can get ideas:
1. Make your highest-paid plan stand out
Systeme.io’s pricing page highlights the highest-paid plan by repeatedly listing that all features on the platform are unlimited for all those who join its Unlimited plan.
The team’s marketers know that potential customers who come to the page to join will look at the plan that fits their every need.
Therefore, the benefits of the higher-paid plan must be clear.
By repeating "unlimited," site visitors will immediately notice the attention-grabbing word and want to see how they’ll benefit and whether they should choose it.
2. New features/products upsell
Converse is an American shoe company that designs, distributes, and licenses sneakers, skate shoes, lifestyle brand footwear, apparel, and accessories.
If you’re a Converse member, you’ll notice that most of their upsells happen through promotional emails:
This is Converse’s way of reaching out to existing customers to entice them to purchase a new and improved platform sneaker.
3. Feature most popular products
Wallien is an ecommerce store selling high-performance, high-quality wetsuits.
Here, Wallien takes advantage of one of the most popular upselling strategies by telling you exactly what you should get!
By labeling some wetsuits with a distinct “MOST POPULAR” tag, loads of site visitors will take a look to see why it’s so popular and if they should choose it, too.
4. Suggesting related products
If you’ll be selling any kind of physical product, we recommend adding a related product suggestion section.
You can customize the section to either display upselling or cross-selling items.
Here’s an example of this strategy from Billabong.
When you’re viewing a pair of flared pants, you’ll see a product feed underneath it providing recommendations of other pants you’d potentially also like.
This feed shows other high-priced items, in addition to the pair of flared pants in the product line. Without a doubt, this is an upsell.
Pro tip: When using this upsell technique, keep it relevant to what the visitor is looking at and within a relatively appropriate price range.
Let’s see how you can earn more by charging less with the following best practices:
1. Free plan/trial
If you’re running a subscription-based online platform, offering an entry-level plan, or even a free plan or trial, can boost conversions by reducing the risk involved for your customers.
For example, systeme.io lets interested site visitors try out the platform for free to see if it's right for them.
At systeme.io we offer a free plan because we know potential customers may have reservations about paying more than $27/month for an app, especially if they're new to the online business industry.
So, rather than charging new, beginner customers, we downsell access (for free!).
This lower-commitment approach allows systeme.io to capture revenue from customers who otherwise may never have signed up.
2. Offering discounts/coupons
Running a sale on selected products, will not only attract new customers but also help you strengthen your relationship with existing customers.
Here’s an example of how Vans implemented a downsell by offering a sale of 50% off on selected items.
In addition to the 50% off sale, Vans allows site visitors to sign up for their newsletter and get an additional 15% off their purchase.
While running promotions can be an expense for your business, it also has the power to increase your sales.
Promotions add a layer of time sensitivity to your customer's buyer's journey and, as a bonus, lower your cart abandonment rate.
Remember: While promotions are exciting and entertaining ways to motivate your audience, you must ensure that your bottom line is protected — ask yourself how steep of a discount you can afford to offer.
3. Abandoned cart emails
Abandoned cart emails are great ways to re-engage with customers who leave your website without completing the checkout process.
If the price was too high the first time around, you can either offer a discount or send recommendations for related, cheaper products to recapture a lost sale.
Here, the Google Store has sent out an email after a cart was abandoned.
To entice their customers to go ahead and complete the purchase, they provide a $10 coupon.
4. Exit intent popups on product pages
Adding exit intent popups to your product pages is probably one of the simplest downselling strategies.
When a prospect visits your site, a popup will appear as they attempt to leave your site.
This popup should entice the prospect to stay.
Check out this example of Wallien, who saw an opportunity to add an exit intent popup and a perk at the same time.
If the price put any of your consumers off from making the initial purchase, your downsell will catch their attention and make your second offer difficult to refuse.
Creating and adding upsells and downsells shouldn’t be difficult — just take a look at how easy it is with systeme.io!
Systeme.io is a simple, affordable, and intuitive online business building platform for anyone who is looking to grow their online business.
When it comes to upsells and downsells, systeme.io allows you to:
Additionally, systeme.io has loads of other features to help you build and grow your online business.
Creating an upsell and downsell with systeme.io is easy!
First, you'll need:
Next, navigate to your funnel and click on "Create step", and choose "Upsell" or "Downsell".
Place them in specific spots in your sales funnel: Put the upsell after the main order form page and downsell after the upsell.
Next, configure the resources of your payment page, so that your customer can access their product after payment.
Note: It’s important to add buttons to accept or decline the offer so the customer will always have the option to accept or decline it.
Additionally, all our plans include:
We ensure that you have a successful online business that is focused on producing valuable content using systeme.io.
Just in case you have extra questions regarding upsells and downsells, we’ve compiled a list of 4 of the most frequently asked questions and answered them for you.
Cross-selling encourages customers to buy related or complementary products, whereas upselling encourages customers to buy a comparable higher-end product than the one in question.
Although they’re frequently used interchangeably, both have unique advantages and work well together.
Short answer: All of them.
Slightly longer answer: Each technique fits a different scenario, a different customer, and a different product.
So, we recommend you use each as a selling technique in different places in your business.
It’s clear that upselling, downselling, and cross-selling techniques are super effective, but only when done right.
The proper application of these strategies in the right sales mix can increase bottom-line earnings by multiples.
So, why not give it a shot?
You might be surprised by the impact this can have on your bottom line!
Give systeme.io a go (for free!), add an upsell, downsell and cross-sell and see how your online business grows.
Other posts about sales funnels:
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