How to Upsell to Your Customers

would you like fries with that?

How do you make more money? You acquire more customers through traffic acquisition, right? Although that does work, a more cost effective way is to increase your average revenue per customer.

You can increase your average revenue per customer in two ways:

  1. Increase your prices
  2. Upsell your customers

If you are interested in increasing your prices, you should read this article. If you want to upsell your customers, you should follow this post. 😉

Before I get into how you should upsell your customers, let me explain what upselling is:

Upselling is a sales technique whereby a seller induces the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale.

If you want to leverage upselling, here is what you ought to do:

Make your upsells related to your original product

Have you ever been through GoDaddy’s checkout process? Have you noticed a lot of upsells?

Some of their upsells are related to their product, while others aren’t.

They could drastically increase their conversion rate if they offered upsells that were more related to the product you just purchased. For example, I added a domain name to my checkout, and they offered me this product in the picture below.

godaddy website seal upsell

Why would they offer you a website seal when chances are you don’t even have hosting, a website or even web traffic? I don’t know about you, but I’ve never built a website before I acquired a domain name.

If they only showed you offers that helped you accomplish relevant tasks, such as getting your website up and generating traffic, their conversion rate would go up.

When you are offering upsells, think of logical ones. Don’t just throw in products because you have them and want to make more money. If they are highly relevant, they’ll convert better.

Be sensitive about your price

Not everyone has a ton of cash. You need to know and understand your customers before you upsell them.

One question you need to ask yourself is… are your customers rich? If they are, you can continually upsell them with more and more expensive products.

If they aren’t, you can still offer upsells that are expensive, but if they turn the upsells down, offer them the same upsell again with payment plans. An example of this is offering your customers an additional product for six monthly payments of $47 instead of a one-time payment of $282.

When you start playing with prices, try not to offer too many discounts as that can cheapen your product. If it is truly a great product, people shouldn’t have an issue paying you for it in installments or accepting a “free trial” offer in which they pay for it thirty days later.

Make it easy for your customers

GoDaddy also makes this mistake when they upsell you upon checkout. Instead of just letting you buy your first product and then upselling you, they offer you two or three upsells before you complete your first purchase.

If you follow their upselling method, you will create more barriers for someone to just make a purchase.

The ideal way to upsell customers is to let them complete the purchase of the first product and then offer them a few options, right after they click the buy button. Your developer should even be able to make it so that people don’t have to re-enter their credit card information if they choose to take an upsell.

Quality over quantity

If you continually bombard your customers with upsells upon checkout, it is just going to irritate them. The last thing you want is someone tweeting how your marketing team is too aggressive.

Assuming you are only offering really good upsells that are related to your core product or service, limit them to two or three upon checkout.

Once someone has used your product or service, you can then drip them through email over a period of thirty or sixty days and offer them more upsells.

The beautiful part about this is that through email, you can educate your customers on how to use your product or service better. And by receiving a few upsells in between, they won’t feel like you are squeezing every last dollar out of them because you are also helping them at the same time. Think of it as a give and take situation… before you take, give a few times.

Sell benefits, not features

Why do you buy something? Sure it could just be an impulse buy, but in most cases you buy something because it solves a problem.

godaddy upsell

If you look at the image above, you’ll see three upsell options GoDaddy provides on checkout. What’s wrong with them? They aren’t benefit-driven.

  • Web hosting – they should have made a pitch around a problem most people have with their hosting. The benefits would have been not just uptime, but also ease of use, one-click solution and no need for any technical knowledge to get you up and running.
  • Website builder + hosting – they do a pretty good job with this upsell because they break down how you can create a website in three easy steps. But I would have also talked about the fact that you can do it within an X amount of time or that you can use their template for X business types. This extra information would have helped you to know that they have a template that fits your business and that you can create a site within minutes.
  • Email – they should clearly state that you can have your own personalized email address and that they will set it up for you.

By focusing on the benefits instead of features, you are likely to increase the number of people who will choose your upsells.

Learn from your customers

Although this isn’t the first step on the list, it is something you should do early on. By surveying your customers through Survey Monkey or Qualaroo, you can find out the pain points of your customers.

Some of the questions you can ask them are:

  • What can we help you solve?
  • What problems are you experiencing?
  • What’s one way in which we can improve our product or service?

Be careful when asking questions like “what else can we provide you with?” because customers will give you a wish list, yet they won’t always buy what they say they want.

By understanding their pains, you can come up with an ideal offer for an upsell. Hopefully the solution will be easy for your customers to use and implement.

Don’t forget to downsell

If someone doesn’t take your upsell offer and you know they want it based on the survey data, chances are they can’t afford it.

One option is to create payment plans like I mentioned above. Another option is to downsell them.

Offer them a cheaper alternative that doesn’t include all the bells and whistles that the original version has. By removing features, you can reduce your price and increase your conversion rates.

Just make sure your downsells still contain all the major features that allow the product or service to work. The last thing you want to do is to downsell something that is useless to your customer.

Conclusion

If you aren’t upselling your customers, you won’t be able to maximize your revenue. As a general rule of thumb, try to make it where 70% of your revenue comes from customer acquisition and 30% comes from upselling your customers.

It’s a healthy percentage to shoot for because it means you are still growing, while maximizing your revenue per customer. This allows you to spend more money on marketing and customer acquisition in the long run as each of your customers will be worth more.