Upselling is a sales technique used to get customers to buy more expensive and/or higher-quality versions of a product or service. It is an important element of any Shopify store’s growth strategy since it allows you to maximize your profits by getting existing customers to spend more than they originally intended.

We know that ecommerce businesses should focus more on retaining customers than acquiring new ones. That's because an existing customer is 60–70% likely to purchase, whereas a new customer is only 5–20% likely to make a purchase. It makes sense then to assume that a customer who is about to purchase something is more likely to purchase something slightly more expensive than someone who has not yet made the decision to purchase. Getting the customer who's already decided what to buy to switch to something better or of higher quality is known as upselling.

Upselling catches a bad rap due to a small proportion of salespeople using aggressive, predatory tactics. But it can be done in a respectful way that helps customers find the best product for their needs. To upsell on Shopify, you need to understand what products will meet your customer’s needs and present them with these options in an organized and straightforward manner.

In this post, we’ll learn all about upselling. We’ll understand what it is in comparison to cross-selling and down selling, we’ll look at 7 best practices for executing upselling, and we’ll examine the benefits of using upselling in your own sales strategy. Let’s get cracking!

What is Upselling?

Upselling is the sales strategy of suggesting a customer upgrade to a more expensive version of the product they’re interested in buying. It’s similar to cross-selling, but it involves an upcharge instead of an additional add-on. For example, if you sell sneakers and someone is looking for basic black sneakers, you could suggest they buy a pair of higher-end leather sneakers instead. 

When done right, upselling techniques can have a positive impact on your store’s bottom line without alienating customers. Keep in mind that upsell offers should only be made when they offer added value to the customer and are beneficial to their purchase decision.

Another upsell example is offering an extended warranty or subscription package on a product that already comes with a warranty. This increases the value of the purchase for the customer and gives them the peace of mind that their purchase is covered if something goes wrong.

Upselling helps retailers to develop a better understanding of their customer’s product needs and preferences, leading to increased customer satisfaction and stronger connections with those customers. With the right strategy in place, upselling can be a powerful tool for driving revenue growth.

Let’s understand a little more about this particular type of marketing strategy in the context of others strategies you may have heard of.

Upselling vs. Cross-selling

There are different strategies that online store owners might use at the various stages of the customer journey.

Upselling and cross-selling are two of the most important strategies used by ecommerce businesses to increase sales. While they both involve selling additional products to existing customers, there are some key differences between the two.

Upselling refers to the process of recommending an upgraded version of the product that the customer has already committed to purchasing. It is used to increase the value of their purchase. An example of upselling is when a customer is shopping for a new leather sneaker and the retailer suggests they upgrade to higher-end leather sneakers instead.

Cross-selling refers to the process of recommending additional products complementary to what a customer has already purchased. This type of selling strategy is used to provide customers with a wider range of options that can add value to their purchase. An example of cross-selling is when a customer purchases leather sneakers and the retailer suggests a leather cleaner – either before or after the purchase is made.

To clarify: cross-selling intends to have the customer add on additional items to the original purchase, while upselling encourages customers to upgrade the product they already planned to buy.

Pre- vs. Post-Purchase Upsells

Pre-purchase upsells are the process of recommending an upgraded version of a product to customers before they have committed to purchasing the original item. This type of upsell is typically used when customers are in the early stages of their purchase journey and are just beginning to learn about the product or service being offered. It allows you to make the customer aware of any higher-end options that may better suit their needs.

An example of a pre-purchase upsell could be when a customer is browsing for a new laptop. As they are searching and researching, they click on an entry-level model with basic specifications. In this instance, the retailer can suggest an upgrade to a more powerful model that includes additional features such as faster processing speeds, greater memory, and extended battery life.

Post-purchase upsells, on the other hand, refer to the process of recommending an upgraded version of a product or service after they have already committed to purchasing the original item. This type of upselling occurs after the purchase transaction has already taken place after the checkout page but before the thank you page.

An example of a post-purchase upsell could be after a customer has just purchased a new laptop. The retailer could suggest that the customer also purchases an extended warranty or protection plan to protect their new device from damage.

Admittedly, the post-purchase upsell is quite similar to the cross-sell. Both intend to sell the customer an add-on or complementary product. The benefit of the upsell following a purchase, however, is that the original purchase is unaffected.

Upselling vs. Downselling

As we've seen, upselling aims to increase the value of a customer’s purchase by recommending higher-end options and upgrades.

Downselling, on the other hand, refers to the process of offering customers lower-end versions or alternatives that may be better suited to their needs. But why would you deliberately try to get a customer to spend less?

Encouraging someone to buy cheaper may be beneficial if they are on a tight budget and need higher value for money. It also, perhaps unintuitively, helps to build trust with that customer by showing a more humane side. Customers want to spend less, retailers want them to spend more – the incentives are not aligned. Downselling, or indicating that you're not just trying to maximize the transaction value, may make that customer feel comfortable. They may even return a second time!

7 Best Upselling Strategies for Shopify

There are several best practices you can follow to make the most out of upselling and cross-selling for your Shopify store. Indeed, ecommerce businesses largely depend on the success of these strategies because the average order value, or AOV, is the holy grail of ecommerce growth. Let’s explore some of the best upselling strategies that can help you increase average order value and optimize the customer experience.

Hot tip: these strategies can and should be used wherever possible: in email campaigns, on product pages, or even as sections on the landing page users see when they arrive on your site.

Offer Discounts and Special Offers

Discounts and special offers are effective ways to entice customers to purchase more. You can offer a discount on the upgraded version of a product or include free shipping when certain conditions are met. This helps to create a sense of urgency and encourages customers to take advantage of the deal before it expires.

Let's return to the laptop purchase to consider as an example. An upsell with a special offer might suggest to the customer that if they upgrade to the higher-end model, which includes additional features such as faster processing speed, larger memory capacity, and extended battery life, then they will receive 10% off and free shipping.

If the original item the customer was interested in didn't boast those features, the discount, or the free shipping, the offer may just be enough to push them over the edge and opt for the upgraded model.

Offer Free Gifts

Another effective way to upsell is to offer customers gifts or bonuses that come along with certain purchases. Everyone loves getting something for free, so this strategy can be a great way to increase the perceived value of an upgrade while allowing you to boost AOV.

For example, if someone has just purchased from your ecommerce store, you could offer them a free gift with their purchase if they upgrade to a higher-end item. Or, perhaps customers can get a bonus such as an additional product for free when they purchase certain items from your store. The gift or bonus increases what the customer is receiving but leaves the price unchanged, which makes it feel like a better value.

Another way to offer free gifts is to use a 'spend-x-get-y-free' approach. This strategy encourages customers to purchase more to get something for free as a reward, which can be a great way to upsell and increase AOV.

Create a Sense of Urgency

Creating a sense of urgency with upsells is another effective way to increase sales. This is often referred to as appealing to someone's fear of missing out, or FOMO. You can use this technique by offering customers limited-time deals or discounts that they won’t find anywhere else.

Example: Offer customers a limited-time 30% discount on an upgraded version of their product if purchased within the next 24 hours. This creates a sense of urgency, as they'll have to act fast to take advantage of this exclusive deal and not miss out on savings.

Another neat way of creating a sense of urgency is with popups. Ecommerce sites do this using a popup window in one of the lower corners of the page. There are a few ways of implementing this. You could:

• Notify the customer that someone in an area near them has recently completed a purchase.
• Provide a unique discount offer to the customer for a limited time.
• Show metrics and stats, like “499 people are currently online.”

Showcase New Products as Suggestions

Highlighting new products as suggestions is another great way to upsell and cross-sell. You can showcase your brand's latest items that you think customers might be interested in, giving them more options to choose from.

Example: If someone is checking out a laptop from your store, you could suggest a few other laptops that have recently been added to the collection. This way, customers can compare different models and pick one that fits their needs best. This is a common tactic used by retailers like Amazon and Apple. You might do it under a heading like "Recently added", "Browse the new range", or "Just landed."

Consider Suggesting Related Products

In addition to suggesting new products, you can also suggest related items that customers might need or find useful alongside their primary purchase. 

Example: If someone is buying a camera, you could suggest different lenses, memory cards, and other accessories they may want to add to their order. This way, customers get everything they need in one go and you get the added benefit of increased AOV at no additional cost to you.

A good way of introducing related products is with an element of social proof, like showing customer reviews or ratings alongside the suggestions. This will help customers make an informed decision, increasing their confidence in the purchase and making them more likely to buy.

Integrate Upsell Emails

Upsell emails can be a great follow-up to remind customers about any additional items that might be relevant to a purchase they've already made. They can also be used before a purchase is made by tracking what's in someone's cart or wishlist and sending them an email when a related product comes into stock or is discounted. 

Some popular upsell email marketing strategies include:

• Send cart abandonment emails.
• Remind customers about items they added to their wishlist. 
• Inform them of new product releases that compliment their recent purchase. 
• Showcase exclusive discounts or promotions on related products. 

By incorporating upsell emails into your marketing strategy, you'll be able to reach customers who may have already bought something from your store and expose them to other products they might like. Using automation is especially useful here: automatically tracking and alerting cart abandonments, automatically sending out restocking notifications, and so on.

Measure Store Conversion Rate

The last step in upselling and cross-selling is to measure the performance of your campaigns. If you're keen to grow conversions, then you need to understand what campaigns are working and which ones aren't.

To measure success, track your store's conversion rate – the percentage of visitors who become customers – over some time. This will help you understand how well your upsell and cross-sell campaigns are performing. You can then compare different metrics such as AOV and customer loyalty (in other words, retention after initial purchase) to get an idea of what's working and what isn't.

Regularly measure and analyze the data from your store to focus on the campaigns that are most effective in increasing conversions. This will help you optimize your upsell and cross-sell strategies to maximize sales.

Let's take a look at the upside of using these upsell strategies in practice. What benefits might they bring?

Benefits of Upselling on Shopify

Upselling and cross-selling products on Shopify can be an effective way to increase sales and maximize customer loyalty. In this section, we'll discuss the benefits of using these strategies in practice, including boosted customer lifetime value (LTV), improved revenue, higher customer retention, and happier customers.

Higher Customer Lifetime Value

Upselling and cross-selling products can help you maximize the customer lifetime value of your store. By providing customers with additional products that complement their initial purchase, you're giving them more value for their money, meaning they're likely to become repeat purchasers. Why is a repeat purchase so valuable?

If the average order value at your store is $100, and a customer only ever buys once, then the total you'll make from them is $100. But if you can make use of some of the upselling strategies we've discussed above and get that existing customer to purchase a more expensive version or something additional, you can make that lifetime total $200, $300, or even higher.

We also know that a returning customer is 52% likely to purchase, up from the 30% chance of buying the first time they visit your store. So if you can appeal to that customer's needs in your upsell opportunities, it should become easier to sell to them after each purchase they make.

Generates Higher Revenue

Upselling and cross-selling products can also generate higher revenue for your store. Since customers are more likely to purchase multiple items when they're offered upsells, you'll be able to increase the amount of money each customer spends on their visit or order. This in turn will make it easier for you to hit those revenue targets that otherwise might have been out of reach.

This goes back to the example above: if you can encourage repeat purchases by presenting product recommendations, related products, or different products with a higher price, you'll be making additional sales to the same customer.

More sales to the same customer present more opportunities to create even more new customers. For example, you could offer referral bonuses or discounts to encourage a shopper to bring in more business.

And with each additional purchase, that average order value of yours just keeps scaling up your revenue. But it's better if those sales come from existing customers, because you've already paid to acquire them, and each additional purchase they make is essentially "free" in the sense that no marketing spend was required to achieve it!

Better Customer Retention

Upselling and cross-selling strategies can also help you improve customer retention, meaning they'll keep coming back to your store for more. Offering related products or different versions of what the customer has already bought will encourage them to stick around longer, as it's easier for them to make additional purchases when it requires minimal effort.

Even better if you can use some sort of optimization or automation to generate product recommendations and related products. A customer is certainly more likely to buy something they feel to be relevant and unique to them, as opposed to some random recommendation out of the left field.

By creating a customer loyalty program, you can also reward returning customers. This could be in the form of discounts or free shipping on their next purchase, which will incentivize them to come back for more. In this sense, you could even think of your customers as subscribers, as a SaaS company would.

The goal here is to keep existing customers around as long as possible – that way, they'll more likely become repeat purchasers and keep increasing that average order value. Also, keep in mind the crucial statistic about returning shoppers that we learned above: they're more likely to purchase than they were the first time they visited.

Growing your customer base by retaining more customers can only be a good thing for your business. You'll have more shopping behavior data from which to draw insights, you'll be able to create better-targeted campaigns, and you'll be able to scale up your revenue more efficiently.

Satisfied Customers

Finally, upselling and cross-selling products will help you create more satisfied customers. If a customer knows that they're getting tremendous value from their purchase, or if they have an understanding of why the product is being recommended to them, they'll likely be happier with their experience overall.

Also – when done correctly – upselling and cross-selling can help you provide a more personalized shopping experience for customers. This will make them feel like their needs are being taken into account, which in turn should lead to happier shoppers. 

A lot of this satisfaction has to do with brand perception. If customers feel like you’re offering them great value, the perception of your brand increases and so does the likelihood of them returning. You probably visit one brand of grocery store more often than any other. You like their brand, you're comfortable shopping there, and your expectations of the food you'll return home with are always met.

In the same way, satisfied customers can be the result of a well-executed upselling strategy. When done right, customers will feel like you're recommending products that are beneficial to their current needs. They'll start to feel like you 'get them' – and that's a great feeling to instill.

Improve Your Sales With Conversion Bear

In this post, we've explored the benefits of upselling products on Shopify. It explains how these strategies can help you increase your average order value, improve customer retention, create more satisfied customers, and grow your customer base. We also learned the difference between upselling and cross-selling, and the subtle difference between post-purchase upselling and cross-selling. Downselling, while likely to reduce order value temporarily, has the potential to lead to more satisfied customers over the long term. Ultimately, these strategies can help you drive sales and revenue for your business.

In summary, a good upselling strategy consists of:

• Trying to create FOMO or the fear of missing out.
• Generating relevant and personalized product recommendations.
• Creating customer loyalty programs to reward returning customers.
• Providing a more personalized shopping experience for customers.

If you're looking for help with perfecting your upselling strategy, Conversion Bear can help. Our team of Shopify experts is here to provide you with the insights, guidance, and tools you need to make the most of your store's potential. 

Conversion Bear is an innovative Shopify partner that offers data-driven solutions to help merchants optimize their stores and increase sales. Use Conversion Bear to implement both pre- and post-purchase upsells, create loyalty programs, personalize your customers’ shopping experiences, track customer behavior, and more. Learn more about Conversion Bear or start using it today.

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