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“For a Dollar More, You Can Get a Large”- Upselling 101

We’ve covered selling in a general sense and gone into detail about cross-selling, the next item on the list is upselling.

With upselling, you’re selling a person a better, more expensive version of whatever they were initially planning on buying. If you’ve ever been to a movie theater or fast food restaurant, you’ve probably experienced upselling in the form of “For a dollar (or so) more, you can get a large.” You were already thinking of getting this meal anyway- the upsell increases the quantity of popcorn you were planning to get, and the movie theater makes more money.

Back to the baby registry example I used in the cross-selling post, Amazon also has a subtle upselling option. You can see “Customers Also Viewed…” which will offer a similar product from different brands at different price points (I say subtle because some options are cheaper and some are more expensive). Another potential upsell on Amazon is the comparison chart that appears with some products. I definitely poured over these, and the reviews, when creating my registry.

Again, just like with the cross-selling example, you can offer upselling options on your own website in a similar way.

General Facts/Tips for Upselling

While the whole concept of “For a dollar more you can get a large” may feel weird or gross to offer customers, it’s been argued that it can actually increase customer loyalty/retention. But how?? You’re just tricking them into spending more money, right? Not really. This article gives an example of upselling a service (car insurance). While the customer was calling their insurance company for a tow truck, the company mentioned “Hey, you’ve been a customer for X number of years and are now eligible to upgrade to a better insurance plan”. Since the person had been a customer for such a long time, and they had to wait for the tow truck anyway, they said “Yeah, why not.”

How does this create customer loyalty/retention? Knowing that you are eligible for greater benefits as time progresses increases the chances someone will stay on as a customer for longer (provided there’s already a value in the service/product). Additionally,  the same article suggests upselling should be a win-win- your customer should feel like they are “winning” (but not in the Charlie Sheen sense).

An example of upselling where the customer doesn’t feel like they are winning: when a cable company tells you you’re eligible for a month long trial for 100 extra channels (yes, please!) but you unknowingly stay signed on and have to pay additional fees the next month. Not cool, don’t do this to people.

How to Upsell

Unlike cross-selling, it’s a little trickier to upsell after the sale has happened (unless the customer decides to return their purchase for something more expensive, which is pretty inconvenient when you think about it).

Here are a few ways you can help make the upsell happen.

Educate your customer.
 Comparison charts, videos, blog posts, and other methods to educate them about the difference between different products/services (and subtle justification of price differences) allows the customer to be open to be upsold.

Be ready to bundle.
If you want to upsell your kayak tour consumers with optional $10 Otterbox rental and $15 gourmet lunch, it makes sense to bundle products together for a lower price point when it makes financial sense.

Show your bestsellers.
Kissmetrics has pointed out that upselling happens fairly infrequently (4% of sales), but one of the ways to increase your odds is by recommending the most-sold items in your store. It’s probably a social thing- I will second guess my purchase if I see that the majority of people are buying this other thing. Even if I end up sticking to my guns, I’ll at least check it out.

Start with current customers.
Upsells work much better for existing customers. A recent example of this is me getting up-sold on for Beachbody Coaching. I had been using their on-demand workouts anyway as a result of not being able to run, but when asked if I wanted to become a coach at a greater cost to get some additional perks, I agreed. Why? Because I already knew the value of the stuff I was paying for, so I was okay with paying a little extra a month for things I was already going to use anyway. To me, it was a win-win.

Offer packages, including one very high end one.
An example of this is from a pinup photographer in Texas who offers four packages from $450 to $2250. Her most popular package is $850, which people feel much less bad spending money on when they see they could be spending more than double that. Most consumers buy the mid-tiered price item so give them options.

Setting Up Upselling Online

Use Your Existing Ecommerce Software
To implement upselling on your own ecommerce site, Woocommerce has a pretty straightforward interface for upselling (very similar to what they use for cross-selling, actually). Check with your ecommerce software’s FAQ section with how it is set up in your software.

Use Your Website Content To Help People Choose
If you have a list of services on your website at higher price points that people hem and haw at (and opt for the cheaper option), you can educate people in a few ways:

  1. Set up an FAQ page to make sure people know exactly what they’re getting and can determine what is beneficial to them.
  2. Create a multiple choice “Should I choose X or Y?” Some websites do this with a quiz, others with a features comparison chart. This allows a side by side comparison of two (or more) options.

Going through this process shows that you are invested in what the customer actually wants and what would work best for them: “Sell the benefit, not the product.” In other words, you may see the benefit for a person to buy the higher priced item but you may have to help them realize the value your product/service will add to their life.

Make It Exclusive
If you feel like creating a little mystery, allowing only certain people to buy a higher level item (think credit card companies with certain credit cards only a very exclusive group of people can apply for) can add to its mystery.

Think About Your Website Design/Copy
There are certain ways to make your website work better for upselling. One way is to run A/B tests with different designs/copy and see which give more sales. This is called working smarter, not harder! Learn more about A/B testing here.

In short, upselling is not a sleazy practice but one that builds customer loyalty in addition to benefiting your business.  

Kassie is a distance runner and a distance reader really. She lives in Ellsworth Maine and, while she might be quiet when you meet her, will throw out something witty when you least expect it.

Would You Like Fries with That? Cross-Selling 101

Back in January and December, I was spending a lot of time on Amazon trying to create a Baby Registry.

As a first timer whose Mom didn’t necessarily use the internet to create a baby registry, I was on my own figuring this out.

Fortunately, hundreds (or thousands) of moms-to-be in recent years have used Amazon to create a registry, so Amazon has plenty of guides for people creating a registry from scratch.

One of the helpful tools that Amazon has as you are viewing a specific product is “Customers who bought this also bought…” (and “…also viewed” and “Sponsored Products related to this item”).

 

As someone who needed a little bit of handholding during this process, this feature was greatly appreciated. It’s also known as “cross-selling,” or selling a different product/service to an already existing customer.

If I was shopping on a specific brand’s website, cross-selling would look  a little different. Say for instance I’m looking for a crib. Common cross-sells would be crib sheets, a blanket, and maybe a mobile. Other times you may have seen cross-selling in action include “Would you like fries with that?” and “Who wants to see a dessert menu?” (Guess where my brain is at today?).

Your business may not be quite as big as Amazon, but you can still implement cross-selling techniques on your own website.

General Facts About Cross-Selling

Since it involves selling to someone who is probably already a customer, or even in the middle of a purchase, cross-selling really is a “nothing to lose” scenario. In order to get the most out of your cross-selling , there are a few things you’ll want to keep in mind.

First- cross-selling is relevant. If someone is buying a baby stroller, Amazon doesn’t offer a Keruig as a suggested purchase- they offer other baby products and/or different baby strollers by other brands. While you could argue that a Keruig is sort of related to someone gearing up for a baby, that’s too much of a stretch for a good cross-sell.

This article suggests using “you” in cross-selling pitches, because it feels more personal. Amazon does this using “Recommended for You,” or in some cases, “Recommended for [your name].” My advice is to go with your gut on this one- during an in-person transaction, I’d probably feel closer to the sales-person and more likely to make a purchase if they were using my name, but knowing that a website is using an algorithm to produce my first name doesn’t elicit that same response (and some people are creeped out by this). Sticking with the general “you” might be the safer way to go.

Shopify also offers the suggestion of adding products that people would generally be familiar with as cross-selling options, because it’s more likely more people will make a purchase if they know what the product is.

Another tip- keep the cost of cross selling items relatively low. The actual suggestion is to keep the overall cost of the order within a 25% increase of the original order (i.e. whatever the customer was planning to order before adding on), while Forbes suggests 35%. Either way, that’s more money than you would have made otherwise.

Cross-Selling Before/During Checkout

Odds are, your website is not as robust as Amazon (the idea of creating that website makes my head spin). However, depending on what type of cart software you have, you may have the ability to add cross-selling into your cart.

Woocommerce comes built with the ability to add cross-selling options to your cart, whereas Shopify requires you to get an add-on app through their website. Investigate the software you use for ecommerce- it may require an add-on or already be built in, but it’s usually fairly simple to set up afterwards. This requires some data entry and thoughtfulness on your part, as you go through your products and think of relevant recommendations (remember- you don’t have to have a cross-sell option for each one of your products- just where they make the most sense).

Don’t be afraid to think outside the box here, either- you can cross-sell services for your products, too. For instance, if I were purchasing a crib, maybe the cross-sell service would be delivery + assembly for people who live within 25 miles of the store. Other examples of services you can add to products include 24 hour support, 1 year warranty, insurance, and so on.

Even if you don’t have a product/service on your website that you’re trying to sell, you can still offer something similar. A lot of the blogs I read will offer suggested posts based on the one I’m currently reading, and they’re usually related to the topic at hand (it’s also a great way to remind people of your older content). If you have a Wordpress website, WP Beginner suggests these 5 “Related Posts Plugins” that can set this up for you.

Cross-Selling After the Sale

Although cross-selling typically happens as a person is shopping or as they are checking out, there is still a chance that they’ll be interested in a cross-sell after the fact. This can double as a customer service follow-up after a purchase.

For instance, if someone buys a lawnmower from you, sending them an email newsletter following up about the quality of their product is never a bad idea. You can include some cross selling items in that newsletter, such as a bagger that stores the cut grass as you’re mowing. Maybe at the time of purchasing the customer didn’t see a need for this, but after a few weeks and seeing the email they will think, “Hmm, I have had to spend a half hour raking after I mow, this could really cut down my time…”- in other words, the value is now apparent.

This isn’t quite the same as a checkout cross-sell, but you get points for customer service follow up and it’s a good chance to get customer service points, and you may make another sale.

Stay tuned for more posts about selling more online this month!

Kassie is a distance runner and a distance reader really. She lives in Ellsworth Maine and, while she might be quiet when you meet her, will throw out something witty when you least expect it.

Our Newest Project: Selling Local Gift Certificates Online With Gift MDI

We all know ‘buying local’ is a great idea. More money stays in the community. We have access to goods and services we wouldn’t have otherwise. We have vibrant downtown centers. New people relocate because they have options to make money. It is a win-win.

But most of us need a little push to do this, and it often boils down to a matter of modern day convenience. It wouldn’t surprise you to learn that organizations with online donations get more donations or volunteer participation increases with the ability for volunteers to sign up online… so how can we make ‘buying local’ something more people can do online?

Option 1: Build every local business an online shopping cart. Not only is this overkill/expensive but some businesses don’t want to maintain an online cart, which involves shipping orders, making sure the stock is up-to-date, etc. Also this option doesn’t consider service businesses like restaurants or cleaning services.
Option 2: Have a database of information of where you can purchase different kinds of goods/services in a community. I don’t mind paying an extra $20 for a raincoat at a local shop. I do mind spending an hour long lunch break shopping for one only to spend half my time going to stores that don’t carry rain coats. This ‘here’s what you got locally’ information would either be a ridiculous-to-program website or involve some very knowledgeable people being available at regular intervals to take phone calls. In other words, not ideal.
Option 3: Sell local gift certificates/gift cards online for businesses.  

It seemed obvious to me that selling local gift certificates seemed not only the best place to start but also an area where most businesses are missing out on potential revenue. Gift certificates are oftentimes never redeemed or, when they are, the customer spends more than the certificate amount. (Think about it, you get a $50 restaurant gift certificate and you are totally going to order the $8 cake versus leaving $3 unredeemed on the certificate, am I right?) In my own experience, I have given away 5 Anchorspace scholarships as silent auction items in the past two years and ZERO people have come in to redeem them.

We know that:

  • Gift certificates are the most requested item on holiday wish lists, so we know people like to get them.
  • Gift certificates create additional revenue for a business, and since they are never claimed or people purchase above and beyond a majority of the time, they are worth more than face value.
  • Gift certificates are easy to send, meaning shipping costs are non-existent.
  • Paper goods besides gift certificates also work with this model.

So all we had to do was build a super fast, mobile friendly, easy to use website where people could buy local gift certificates online. 

Enter Gift MDI, a website I have been building (with a lot of help from my colleague Dr. Eric York) over the past six months. Eric was the design brain (though I had lots of opinions) and I was the sales/marketing person talking to business owners about this very new idea.

We launched with 14 businesses last Saturday night, and we had our first sale Sunday! If you are a business on MDI and want to be on the site, just contact us.

Our model is simple:

  1. Businesses make more money without more hassle selling gift certificates. If businesses didn’t have gift certificates made, we made them. If people didn’t have an idea of what they could do, we helped them figure it out.
  2. Customers can personalize their experience by sending gift certificates to different people from the same cart and by adding personal messages and greeting cards.
  3. Affiliates can earn money generating sales, decreasing our overall marketing budget and increasing buy in, online and off.
  4. We make our money by taking a percentage of sales, so as not to penalize businesses doing lots of small transactions with a per certificate charge and so as not to penalize businesses with no sales with a monthly charge. You only pay for this marketing when it works.
  5. Once we have our business model down, we take this concept to other communities. This site would be super expensive to replicate, but what is really needed is local community connection and knowledge.

Our goal, besides Gift MDI being our working prototype, is to put $100,000 into the local economy by May 28, 2018 with this website.

I know it’s ambitious but I think we can do it as a community. Sure, it’s a great mix of my customer service, web development, sales, and community development skills but I think it’s something communities need just about everywhere.

If you see this concept as interesting and live locally, please let me know if you’d like to be involved. We’re very open to feedback and participation as this is brand new. I want people to see how vibrant and diverse our local economy is!
If you see this concept as interesting and don’t live locally, please get in touch and we can help get it to yours. 

Thanks to everyone who has supported the effort so far. It is an ambitious project and we are just beginning! Visit GiftMDI.com to buy local and online (yes, you can do both now).

Nicole runs Breaking Even Communications, an internet marketing company in Bar Harbor Maine. When she’s not online, she enjoys walking her short dog, cooking with bacon, and trying to be outdoorsy in Acadia National Park.

Tech Thursday: What Cart Should I Use?

Online shopping cart, that is! After doing some research for a client, we thought we’d share our findings on a few of the different options for online stores that people may find useful, including Amazon, E-Bay, and setting up a cart on your own website.

If you have any questions or ideas for future topics, let us know!

Kassie is a distance runner and a distance reader really. She lives in Ellsworth Maine and, while she might be quiet when you meet her, will throw out something witty when you least expect it.