The lifetime value of each customer is one of the best ways to look at your business. Recurring business is an integral aspect of many successful businesses. But to gain more loyal, long-term customers, upselling is a key tool to implement.
Upselling improves your average order value and enables you to provide better customer service. This means more sales and higher overall revenue. For companies that offer strategic upsells, 70% to 95% of revenue comes from upsells and renewals! If you’re running a retail store, incorporating upselling techniques into your marketing strategy is incredibly profitable.
In this article, we will explore the top 10 online retail upselling strategies in 2022 and share examples of upselling as well.
What are the benefits of upselling? Why should you use it?
An upselling strategy covers the process of keeping up with customers and offering them what they’ve already demonstrated interest in.
For e-commerce stores, reducing cart abandonment is one of the strongest benefits. Rates vary greatly by industry and year to year, but in all cases, the majority of filled shopping carts (70%) end up abandoned. In some cases, the rate exceeds 80%, particularly when shoppers use mobile devices.
A customer is less likely to abandon their shopping cart if they find other relevant products they’re interested in. Upsell features include displaying relevant products, before and inside the checkout page. This provides an incentive for the customer to interact with your site more, increasing their engagement.
Average order value
Upsell strategy is meant to increase your average order value (AOV). Customers interested in your products can be encouraged to buy complementary products, join your subscriptions or get some add-ons.
Increasing your AOV leads to additional revenue for your business. It’s easier to sell more to an interested customer than to sell less to many customers.
When done correctly, upselling increases conversions by increasing the number of purchases per customer. One customer buying more related products results in more revenue over time as your upselling strategy encourages more customers to do so.
Top upselling strategies for your retail business
Utilizing the best upselling practices enables businesses to maximize their retail sales performances.
1. Offer discounts based on a minimum order value
This common strategy alone has been reported to increase sales by 25%.
It’s a simple trick; you make a simple offer such as a certain discount on any purchases over a specified value. For example, “Get 10% off any order of $50 or more!”
In this case, imagine your customer is looking at a checkout screen with $40 on it. If they simply purchase another $10 worth of products, the total cost will only be another $5. As explained, this simple offer has been shown to compel customers to make larger orders.
The end result is having a customer feel like they made a better purchase. This translates into a higher AOV for your business.
2. Create product bundles
Product bundles are groupings of products sold as a single package.
Product bundles are often sold for less than the total cost of each product purchased individually. This type of cross-selling creates a perception of more value for the customer’s purchase. Instead of selling 3 relevant products separately for $20 each, bundle them together and sell the whole package for $50! This also improves your AOV.
Pro-tip: product bundles work best when they are sold as an “all-in-one solution” to any problem. For example, all-in-one kitchen sets versus individual kitchenware purchases. This makes it easier for your customer to understand.
3. Incentivize customers to boost sales
There are a lot of ways to incentivize additional, scheduled, or repeat sales—for example, free shipping and “buy two get one free” offers. Other examples include free products for purchases over a specified value or loyalty reward points.
There are many ways you can encourage your customers to provide you with free and effective advertising as well. Coupons for leaving reviews are one example.
4. Offer a guarantee to build confidence
Money-back guarantees, extended warranties, or free exchanges in cases of faulty products or dissatisfaction demonstrate your confidence in your products. They also provide customers with more confidence in your products, encouraging them to buy more. This can often be the nudge that convinces customers on the fence to go ahead and make a purchase.
5. Host in-store events
Events, when hosted properly, are a great way to engage customers and provide memorable experiences. They are also a great lead generation strategy, and a great time to feature your most generous upsells.
This strategy’s usefulness will vary greatly by industry. Some events should be held on location, while virtual events may be appropriate for other businesses. For example, if you run an automobile showroom, getting customers to come in and look at what they’re interested in can lead to them taking an interest in other newer or more expensive items that they otherwise wouldn’t have even considered.
Pro-tip: Keep visitors engaged with things like games, trivia quizzes, and other interactive features.
6. Leverage inventory for upsells
As a business practice, it’s important to focus your upsells on slower-moving products, such as those that may end up going out of season. Inventory management can and should be incorporated you’re your upsell strategy.
A good example of this is Marks and Spencer, which offers steep discounts as high as 70% on old stock after they release a new collection.
7. Showcase smaller, easier upsells at checkout
This retail practice is so common for a good reason—it works!
Your store layout, whether brick-and-mortar or online, should showcase small, evergreen products at the checkout. Apparel chains often place their socks near or even beside the point of sale (POS). This is because it’s an easy upsell; people need socks and socks are cheap and wear easily compared to other clothing items. Supermarkets are another example, often displaying mints, toys, chocolates, deodorants, and similar easy upsells at the checkout.
You can implement this in your own business easily. Online, plugins, or web designers can see to it that you offer similar easy upsells at the checkout page. This enables you to make a minor change that will often increase checkout values and raise your bottom line.
8. Use a visual attraction
We are visual creatures. Placing a visual aid like an attractive display based on a theme can go a long way. Similarly, well-organized product layouts that are easy and enjoyable to interact with can encourage additional purchases. Social media cut-outs are another option that should be used where applicable.
Product recommendations sections are a great place to showcase your upsell products.
Bonus tips for online stores
Online stores have additional options for upsell strategies that should be taken advantage of.
9. Convert products into subscription products
This is a specific upsell strategy that gives customers an easy way to turn a single purchase into a recurring order cycle or subscription. Some products, such as pet foods, need to be purchased often, in a regular cycle.
The good news is that this can be added to your POS easily. A plugin like Autoship Cloud enables you to just add a “Subscribe” button that can create a custom, recurring order. Schedules can then be altered at the customer’s convenience.
This strategy creates recurring revenue for your business while building a loyal customer base!
10. Setup customer email campaigns
Upselling leads and existing customers are easier when the process is automated. If you have many customers, this is a must.
Set up automatic email notifications for users about their upcoming orders. Of course, email subscribers about their upcoming deliveries and “changeable before” dates as well. Email marketing tools are also great for:
- Order notices
- Payment details
- New product notices
This is another tool that can be integrated with a simple plugin. Autoship Cloud also enables this feature through its built-in integration with SendGrid, which was built specifically for this purpose.
Our best tip of all – use Autoship Cloud!
Autoship Cloud is an all-in-one subscription plugin. It enables recurring orders and automates billing processes, reducing the overall manual work involved in managing subscribers.
Autoship Cloud comes with a built-in upsell feature and a built-in integration with SendGrid for email marketing in addition. The upsell feature is extremely easy to use, adding a simple button that enables customers to create recurring orders. This enables small teams to manage a business’s subscriptions and increase the lifetime value of each customer.
If you’re looking for more from your subscriptions management plugin, Autoship Cloud also:
- Enables customized coupons
- Enables customers to edit their upcoming scheduled orders
- Comes with data analysis for:
- Customer behavior metrics
- Event logs
- Inventory forecasting
- Includes a revenue dashboard so you can analyze the results
Upselling is about maximizing customer lifetime value and minimizing needless waste from common customer actions like cart abandonment. When practiced properly, it can increase conversions and order plus lifetime value, while increasing customer engagement.
For these purposes, Autoship Cloud offers a complete solution. In fact, Autoship makes simple upsells a core part of its offer. It even includes an integration with SendGrid to add regular, automated, custom email notices to your subscription process.Try Autoship Cloud today by clicking here.