Last updated on
January 2, 2025
One of the most powerful tactics for maximizing revenue while adding more value to customers comes in the form of upselling.
This means getting them to buy a more expensive model of the item or purchase additional products to go with the main item they want.
If used accurately, upselling techniques can dramatically improve the bottom line in many markets — from retail to hospitality, e-commerce to call centers.
Research studies have shown that upselling and cross-selling averages 10 - 30 percent of a company’s revenue, depending on the industry.
Marketing Metrics also notes that the probability of selling to an existing customer is 60–70%, compared with only 5–20% for new prospects.
Therefore, learning the upselling game is as essential as knowing every trick for maximizing your sales potential.
Upselling is finding products and services that genuinely meet customers' capabilities and improve the customer experience.
Upselling isn’t a pushy sales tactic; if done right, it will satisfy and retain customers.
The AOV (average order values) and customer loyalty improvers that an upselling technique drives make it beneficial for businesses that implement them well.
Here’s why upselling matters:
Upgrades and additional products give customers something to feel good about their purchase, as they now see the value. For instance, Apple is excellent for upselling products through retail techniques by selling a device like AirPods or an extended warranty with an iPhone purchase.
Upselling is an art that requires a deep understanding of your customer’s needs and how to present additional options that provide real value.
Implementing these eight techniques can increase revenue and enhance the overall customer experience, building long-term relationships in the process.
The number one upsell rule is the offer has to be pertinent to the customer’s original purchase. Upsells of no relevance will frustrate the customer or not even convert the customer.
Consider the customer’s first purchase as the basis, and the upsell needs to add something.
Example: If your customer buys a laptop, an upsell for a laptop bag or upgraded software will be a natural and helpful way to sell. Toast POS says such context-relevant upsells increase wine sales by up to 15%, proving that suggesting relevant wine pairings is one way to enhance wine sales.
Price is a factor, but selling long lets you present increased value. Upselling must be for the customers’ sake—we must convince them that buying the upsell gives them something better than a more costly product. Upgrades, extended warranties, and premium service services — the value proposition needs to be very clear and compelling.
Example: Offering an extended warranty when a customer buys a high-end electronic device provides value by offering peace of mind. Not only is the customer paying more for the product, but they’re also paying for long-term protection. According to a New York Times study, urging value over price can increase upsell conversion rates by as much as 30%.
Upselling should be perceived as a logical, anything else end of excellent customer service, not a forceful peddling function. Consider the upsell from your customer’s point of view, showing how you are assisting them by making the best possible choice considering their needs and preferences.
Example: Customer service agents can provide thoughtful upsell suggestions that suit the customer’s past purchase behavior. For instance, a customer who uses data on their plan and consistently exceeds it can upsell an updated plan. It’s a solution to their problem. This method can build trust around your brand and, in the long run, encourage some of your customers and build loyalty.
Offers can be a fantastic motivator for customers to accept an upsell. Although the goal of upselling is to raise revenue, the customer feels like he’s getting more value for less money by receiving a small discount on an upgrade or bundle.
It’s beneficial in sectors where prices are susceptible.
Example: When positioned as a limited-time offer, if you offer a premium drink for a slightly lower than usual price, you can drive more sales in a bar setting. This strategy can also be applied to online retailers; Shopify’s report said that the upsell discounts can raise conversion rates by 10-30%.
When scarcity and urgency are present, customers are more than willing to act urgently. This creates FOMO (by making people more likely to take an upsell opportunity to avoid missing the deal later).
Example: Servers can upsell limited-time or seasonal items in a restaurant by exploiting the chance the item won’t be available when the customer comes back. FOMO selling actually really does work and is proven to increase sales.
Customer feedback is one of your best weapons for refining your upsell strategy. After your initial purchase, analyzing product reviews and surveys can help you determine what customers appreciate or what they believe they need. You can now use these insights to personalise your upsells.
Example: Real time customer feedback is important in call centers as it helps in the guidance of upsell offers. Agents can use this information to upsell premium plans or other services should customers frequently ask for increased data or faster internet.
It goes without saying that real-life examples or testimonials work really well for customers in helping them visualize the benefit of an upsell. Either by comparing products or pointing out happy customer stories demonstrating the role of the upsell, the decision will be easier for hesitant buyers.
Example: Retailers often show side-by-side product comparisons that highlight the benefits of the new and improved version. Social proof can also come in the form of testimonials from satisfied customers who made the same decision and hopefully inspired others to make the same decision.
Sometimes, customers will need time to upsell. That doesn't mean the opportunity is gone if they pass on the offer at the initial purchase. However, you can follow up after the fact with personalized messages or emails that will rekindle their interest. It works incredibly well where purchase activity is substantial.
Example: Hotels can also use email marketing platforms to follow up with guests, using email to personalize the upgrade to their booking, such as spa treatments or room upgrades. In e-commerce, follow-up emails can tell customers something left in the cart or suggest other such goods in line with a customer's purchase history.
For e-commerce and other online businesses, leveraging technology and automation can make upselling even more effective. Consider these additional strategies:
Allow customers to customize their purchases with add-ons or upgrades. A Forbes report found that personalization in e-commerce can increase sales by 10-15%.
Highlight the benefits of premium features to convince customers that the upsell is worth the investment. Give the customers an idea of what they are missing out on, and what they can receive if they upgrade.
Customers are more likely to purchase if they perceive they are getting a great deal on an upgrade or bundle. Studies have shown that the bigger the discount the more the customers are drawn to the products.
Make it easier for customers to upgrade their current products or Services. Make things accessible and ensure that upgrades can be done in a few clicks.
We have looked at a few upselling techniques to help enhance sales, now let’s peak at a few tools that can help aide in the process. Here are a few of them.
To derive an understanding of exactly what your customers are doing, where they are purchasing, and what they like to buy, you need CRM software. This helps businesses to store detailed customer profiles that can evolve into upsell suggestions.
Sales departments can use CRM data to personalize upselling, for a better probability of success.
Features like customer segmentation, logging communication history, and running refined automated follow-ups introduce a more targeted and more time-efficient approach.
Salesforce or HubSpot can be tools that businesses use to manage customer relationships and leverage customer data in securing upselling opportunities.
Benefits:
Sales enablement tools aid sales departments in achieving more sales effectiveness with tips on upselling from a company's resources, data, and insights.
They serve to bring both marketing and sales teams into sync by making content like product information and training materials readily available, which can be used to create compelling upsell offers.
With platforms like Seismic or Showpad, salespeople can access this customer data in real time and suggest complementary or upgraded products because that’s what customers may need next.
Benefits:
Real-time product suggestions are delivered through AI-powered recommendation engines which look at customer data, purchase behavior, and browsing patterns.
One of the main applications of this technology is upselling in e-commerce, for example, Amazon excels at upselling the customers "Customers who bought this also bought …". With machine learning algorithms.
These engines increase the chance for upsells by continuously creating relevant and timely offers so that you are never wasting money on irrelevant upsell offers.
Benefits:
Businesses, on the other hand, will often have upselling features built into their modern e-commerce platform, which automatically displays related or higher-tier products at the customer journey points.
There are apps and plugins on Shopify, BigCommerce, and WooCommerce that simplify upselling by showing relevant product upgrades to the user on product pages, during checkout, or in post-purchase emails.
They allow us to set up cross-sell and upsell opportunities without requiring much manual input and step inside the customer's shoe box in ways that weren't possible before.
Benefits:
Email marketing automation lets businesses send follow-up emails to customers after they make a purchase and provides them with upsell options.
If a customer has made a past purchase, Mailmunch, Brevo, or a bunch of other platforms can send personal emails encouraging them to upgrade or buy complementary items.
Data analytics and customer segmentation help automate email sequences as they can drive repeat purchases by offering time-sensitive discounts, product recommendations, and exclusive deals.
It works very well for upselling costly products or subscription-based services.
Benefits:
To get the most out of your revenue potential, your business needs to master upselling techniques.
Whether you are in retail, hospitality, or e-commerce, knowing how to provide value, listen to customer needs, and using the right tools can greatly impact your sales strategy.
With proper upselling tools, businesses can increase the amount of revenue coming in and improve customer satisfaction considerably.
You can build a more personalized and profitable customer journey if you continuously test your strategies, use customer feedback, and offer relevant upgrades.
Ayesha Ejaz is a passionate writer who loves diving into research to explore new topics and broaden her knowledge. With a keen interest in learning through writing, Ayesha crafts informative and engaging content across various subjects. You'll find her unwinding with music or challenging herself with word search puzzles when she's not writing.
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