Upselling is a way to drive revenue and simultaneously increase the value that customers receive. The biggest brands on Shopify employ the best upselling practices for these very reasons. However, upselling is easier said than done, and poor practices may have the opposite effect and drive your customers away altogether.
An effective upselling strategy involves suggesting smart, useful, and relevant upgrades to your customers' orders, as opposed to random, unrelated ones they won't be interested in. But how do you determine which products to pitch to your customers, and what makes an effective upsell strategy? Let's explore.
What is upselling?
To put it simply, upselling is the process of recommending product upgrades to your customers. A common example of an upsell is to encourage fast food customers to purchase a large drink instead of a medium drink for a slight increase in price.
To use some examples more specifically related to ecommerce, upsells could include:
- Upselling a phone model to one that comes with more storage space and a better camera
- Upselling a water filter that lasts longer and filters out more particles
- Upselling an economy size of a protein powder for a lower cost per shake
- Upselling a one-time purchase into a subscription to get a twelve-month supply of a product for the cost of a nine-month supply
A compelling upsell offer keeps the product recommendation relevant to items the customer has previously purchased. Amazon frequently employs this technique to compare and recommend more premium versions of the same product.
You can upsell at any point during the sale; you can put upsell offers on the product page, the cart page, and even after the checkout page. As such, there are two upselling categories: pre-purchase and post-purchase upselling. At the end of the day, upselling is simply one of the best ways to increase the average order value (AOV) for your Shopify store.
The difference between upselling and cross-selling
Upselling and cross-selling are both ways to boost your store's average order value and conversion rates. However, they are two different methods of boost AOV, and as a result, people often confuse them - especially because in many cases people will refer to what are actually cross-sells as upsells.
Upselling focuses on getting a customer to spend more on a specific product through a product upgrade. This upgrade could be based on the size, quality, or quantity, or features of an item, or it could be add-ons that are specific to that product (like gift wrap or engraving).
On the other hand, cross-selling focuses on getting customers to spend more by buying multiple (generally complementary) products. These products could be presented as bundles designed to be bought together, or other products that simply go well with the product a customer is interested in (for example, a wireless charging pad to go with a new phone).
In both cases you're getting the customer to spend more money, but the simplest way to understand the difference is upselling equals single-product vs. cross-selling equals multi-product.
Pre- vs. post-purchase upsells
To reiterate, you can upsell at any time before or after a sale. Pre-purchase upsell offers are great for:
- Upselling to a bigger size or quantity
- Upselling product enhancements (gift wrapping, engraving, etc.)
- Upselling services (white glove delivery or installation services)
- Upselling to a subscription
In general, you want your pre-purchase upsells to be opportunities to enhance the overall purchase experience for your customer. They should feel excited, not cheated, by taking you up on your upsell offers. At the same time, they also shouldn't feel like they're missing out (too much) if they choose to skip on them. Think of your pre-purchase upsells as convenient options your customer can ultimately take or leave.
By contrast, post-purchase upsells can be a little more daring because guess what - you've already closed the sale! These upsells only appear after a customer has clicked 'checkout'.
As an incentive, store owners tend to offer a warranty, free trials, discounts, or free shipping for recommended products. LimeSpot is a popular Shopify app that lets you optimize your site's thank-you page with its drag-and-drop interface. Here, you can feature post-purchase recommendations that come with special offers, like bonus loyalty points or a discount.
Why should you offer upsells and cross-sells on your Shopify store?
As you can likely deduce by now, upsells have a few clear benefits for your store:
- To help increase your average order value (AOV)
- To boost the customer's confidence in their purchase
- To ensure the best customer experience possible to increase customer retention
Now that you know why upselling is a recommended tactic and how it complements cross-selling, the next step is to understand your options for setting up upsells on your Shopify store.
How Shopify stores handle upsell recommendations
Shopify is a dynamic platform for ecommerce stores, and there is no shortage of Shopify apps that offer impressive features and cater to a wide variety of needs. Shopify upsell apps in particular help you upsell better, as the name gives away. Whatever your budget or needs are, the chances are that there's an effective upsell app for you on the Shopify app store. So, how exactly do these Shopify upsell apps work? Let's break down the different types of upsell apps out there.
Manual upselling apps
The cheapest upsell apps on the Shopify store are manual upselling apps. Here, the store owners have to recommend each item for purchase manually. The manual recommendation gives you total control over the products you want to upsell. All these clicks and drags can be time-consuming, and thus, these apps are only recommended for owners of small stores. If your store has a lot of showcased products or high product turnover, a manual recommendation app can be relatively inefficient.
Rule-based upselling apps
Slightly more innovative than the manual upselling apps are rule-based upselling apps. As the name suggests, these apps follow a rule-based system. Instead of manually recommending each upsell product, you define rules for the upsell products. These rules can include metrics like branding, price, color, tags, manufacturers, and so on. As an example, a store could set a rule that any time a customer is browsing a flat-screen TV, that they're upsold the store's three-year flat-screen TV warranty.
These apps are slightly more expensive than manual upselling apps because of their flexibility and better outputs. Again, these work best for owners of small businesses. If you have a growing business, the time spent on defining all the rules will outweigh the benefits that these apps offer.
Algorithmic upselling apps
Next in the upselling app hierarchy are the algorithmic upselling apps. These apps are 'smarter' than the previously mentioned upselling apps and thus, often cost more. These apps take an algorithmic approach to product recommendation, and you don't have to write all the rules manually.
The algorithmic product recommendations find their basis on metrics like visitor shopping history, bestseller products, and the tag match between the purchased and the upsell product. You can use these pop-ups for bundling recommendations as well. An example of such an algorithmic app is Candy Rack that uses popups to upsell items. Another similar upsell app that uses AI is InCart Upsell.
Personalized algorithmic upselling apps
At the top of the Shopify upsell app pyramid are the personalized algorithmic upselling apps that use personalized data for each visitor and recommend products based on this insight. These apps work by storing a large amount of visitor data on the shopping site. This data comprises demographics, shopping behaviors, and history. Such apps then use the gathered data to tailor the upsell recommendations specific to each customer. They also ensure upsell products are never promoted to a customer that may be out of stock, and still provide you with flexibility and options to manually set upsells where desired.
How to improve upselling on your Shopify store
Given the benefits of upselling, you might be thinking about incorporating upselling into your Shopify store. Before you go ahead and commit to an upselling application though, it’s essential to find the right one. So what factors should you take into consideration? Well, a good upsell app will…
Use AI-driven personalization
We recommend AI-driven personalization to Shopify merchants because it allows you to interact with your customers naturally. It does so by curating highly personalized content for the site visitor. In the case of upsell offers, such an approach means that you can efficiently target your potential customer with personalized upsell offers.
It works better than simple upsell offers because the buying behaviors of the shopper also come into play during a purchase. An AI-powered personalization tool allows your customers to have a guided one-on-one shopping experience.
Make use of dynamic personalization
One way to secure your customer's purchases is by the use of dynamic personalization. This technique uses customer data to make specific and targeted offers based on their purchase history, demographics, and buying persona. Using relevant apps, you can build up your customer profiles with each purchase and then make your dynamic personalization strategy accordingly.
Leverage A/B testing of offers & placements
Finding the right upsell strategy for your store can prove to be a hassle. When determining what works best for you as a Shopify merchant, we recommend A/B testing. It helps gather valuable metrics and analytics and enables you to make the most effective upsell offers.
A/B testing takes out the guesswork by trying out two different approaches for upselling and comparing their results. For example, you can test which threshold for discounts works best for an upsell offer by offering one discount to one group of customers and another deal to the other group. Once you have determined which discount is the most effective, you can move on to different categories like free or flat-rate shipping. Thus, you can optimize your whole upselling strategy by using A/B testing.
Take upselling off your store
Obviously the best place to do upselling is right when the customer is primed to buy, on your site. But you can also upsell customers after they've made their purchase, via email. Consider adding an upsell offer to your customers' post-purchase transactional emails, like their order confirmation. You may have to bundle the orders manually afterwards, but upselling through email can be one last way to boost your customer lifetime value (CLV).
Get better upsell results with LimeSpot
LimeSpot is a leading personalization platform for Shopify stores. The AI-driven personalization platform builds a dynamic and personalized shopping experience for your customers. With LimeSpot, you can increase customer engagement and consequently increase your store's conversion rates. The AI-driven software also helps increase the transaction size and positively impacts your store's Average Order Value (AOV). You can test out LimeSpot for your Shopify store with a 15-day free trial.
LimeSpot uses AI technology to make intelligent product recommendations to your customers. You can lay out these product recommendations in multiple layouts such as grids and carousels with different categories. For example, you can make categories for bundling and upselling. Moreover, you can choose to make these recommendations on multiple pages throughout the website to increase conversion rates.
The recommendations are personalized and use data from customers' current, previous purchases, and dozens of other factors. These advanced features and data-driven technology have made LimeSpot Personalizer the #1 Product Recommendation App on Shopify for intelligent upsell, cross-sell, product recommendations, and guaranteeing a personalized experience.
Improve the post-purchase experience
With LimeSpot, the shopping experience doesn't end at the checkout. You can send targeted emails to reengage customers by offering upsells and cross-sells based on their previous orders. LimeSpot's AI continues to learn your customer's behavior with each purchase and curates future recommendations based on that.
Real-time website personalization
LimeSpot includes multivariate testing, which allows you to test any element on your website with different placement and content; this is the A/B testing we mentioned earlier. You can then monitor the customer's journey and optimize their experience. The real-time audience segmentation allows you to create targeted content for each segment while the customers are browsing, instead of waiting for them to kick off a new session on your site.
After optimizing the recommendations, you can also publish them from your Shopify store to your other websites with LimeSpot's multiple website coverage.
Ready to test out LimeSpot for yourself?
Like many effective business strategies in the modern world, the best upselling practices are data-driven. Advanced technology and AI-driven software help generate a clear picture of consumer trends and buying patterns, which you can use to generate an effective upsell strategy. Moreover, AI technology helps you get to know your customers on a more personal level, paving the way for customized experiences that ultimately increase customer loyalty and drive revenue.