The recent covid lockdown and related health consciousness among the public have immensely boosted e-commerce sales. Almost all large-scale or small businesses have identified the opportunity and started investing heavily. This has allowed them to increase their profit margin using upselling, cross-selling, and loyalty programs.
These strategies help you supercharge your business and boost profits immensely. To aptly use the opportunity and maximize the benefits, understanding your product’s marketability and planning is crucial. Many companies provide consulting services to help you understand the checkout and upsell strategies. To know more about such services, visit this site.
What Is Upselling?
Upselling is the art of suggesting customers already interested in your products buy something extra besides the ones they were looking for. Compared to other marketing strategies, you don’t need to attract customers to upsell your product. Understanding a customer’s product choice and suggesting a superior product that works much better and provides more benefit to the customer is the whole idea behind upselling.
Advertisements and adverts aim to bring more customers to your e-commerce site while upselling maximizes your benefits by making the most out of customer traffic. Advertisements help you increase your customer base and overall sales, while upselling is aimed solely at maximizing profit margin.
Upselling Vs. Cross-Selling
Upselling and cross-selling are often confused by business owners. Upselling aims to increase the product value by suggesting a superior product. In contrast, cross-selling aims to increase customer spending by suggesting a different product that works well with the original customer choice.
Suggesting a printer, a pre-built PC, fries, and a burger is part of the cross-selling strategy. In upselling, if a customer is looking for a 13″ laptop, suggesting they buy a 15″ laptop with a superior specification is the idea behind upselling. During cross-selling, the options are often limited, while in upselling, multiple upgrades are possible and have a greater chance of boosting your profit margin.
In the current market, it is advisable to use both cross-selling and upselling on your e-commerce site to supercharge your business.
Finding The Right Opportunity To Upsell
E-commerce websites mainly use two important checkpoints to suggest superior products. This includes:
- Product Pages: Instead of dedicating an entire page to a specific product, small boxes are often included on the bottom to suggest superior products. This can alter the mindset of the customer and can influence them to go with the superior product. Since e-commerce websites launched upselling, there has been a 29% increase in the profit margin and overall sales.
- Checkout Pages: On the checkout page, it is advised to show superior products on discounts. During checkout, the customer is ready to spend money and buy the product. Offering a premium product that is on discount during this phase can highly influence the customer. Recent market surveys have revealed that around 85% of customers are influenced by impulsive deals and buying opportunities.
Post-Purchase Vs. Pre-Purchase Upselling
Pre-purchase upselling is mainly focused on the website. Navigating the user mindset and providing better options can influence their choice. The user mindset to experience something better than what they have is exploited in the post-purchase phase.
Customers are bombarded with email notifications, popups, and targeted adverts to offer them a unique opportunity to upgrade their choice. This includes special processor upgrades, storage upgrades, and even RAM upgrades for laptops or pre-built PCs. Similar upgrades are offered in all categories to maximize the benefits for each customer.
Pros And Challenges Of Upselling
Pros
- Minimal risk: Since suggestions are made to an existing customer, minimal risk is involved. There is no disruption in the original sales. Post-purchase opportunities do not interfere with or affect the original sale.
- Better conversion rate: Since the existing customers are on a buying mentality, upselling has a much better conversion rate than any other marketing strategy to boost your sales.
- Better order value: Since superior products are suggested, it helps boost the average order value (AOV). Due to the superior experience from the new product, a customer receives, it is a win-win situation for both parties.
Challenges
- Customization: Due to the wide availability of products on a website, it is important to personalize and suggest products that match the user’s requirements. This often means investing more in the tech and using superior software to improve the customer experience.
- Fatigues: Bombarding customers with suggestions and notifications over and over can cause them to lose interest in the original product. So it is important to find the right balance between creating fatigue and maximizing opportunity.
Choosing The Right Platform
Using the right hosting, email, and ad services is important to improving the customer experience. These service options can help you improve the suggestions and upselling strategies. Most hosting services allow you to customize your e-commerce website according to your needs.
Using a flexible service that can provide upsell suggestions based on the user base is essential. In addition, it is good to have enterprise-level security and functionality to protect the data of your customers. Incorporating new technologies, such as machine learning-based product suggestions and adverts, can improve the customer experience and profitability.
Conclusion
It is important to note that although upselling is aimed at increasing your average order value and sale, the customer comes first. As a business owner, the primary responsibility is to create a loyal customer base and serve your customers with minimal interference and inconvenience. Suggesting them random products that do not concern them can leave them confused and annoyed; thus, ensuring the relevance of suggestions is important for understanding.
Choosing the right platform and hosting service to serve your customer base can improve loyalty and average order value. This will help ensure that customer experience is not affected by the experiments and upselling market strategies introduced by you. While trying to maximize the profit, ensuring that the customers are not annoyed or disturbed is noteworthy.