The Secret to Increasing Average Order Value that Nobody is Using: Post-Purchase Upsells
Did you know that you can get an immediate 15-30% increase in revenue from upsells? (source)
Upselling is one of those “tricks” ecommerce marketers have up their sleeves to increase their customer’s average order value (AOV). It’s a way to help persuade buyers to take an action they didn’t necessarily plan on.
What you’re offering your customers is added value either by making them aware of other products that are complementary to ones they are already buying, or increasing their motivation to spend more with special offers or discounts – only presented AFTER a transaction has been completed.
So the genius part of upselling is that there’s no way you can lose the sale! The offer doesn’t appear until after the sale has been completed, so if you’re worried about distracting the buyer with other items, there’s 0% chance of scaring them off.
Why Does Upselling Work?
Upselling is good for your ecommerce site because it means extra revenue. But the point that we want to drive home here is that upselling is valuable because it gives you the opportunity to engage with your customer and grow a relationship.
You don’t want to appear random with your upsalesmanship – the post-purchase offers must be relevant. If they can connect with your customer’s needs, it’s a win-win. If your customer is buying a fishing rod, don’t offer them beach balls and briefcases. Offer hooks, bait, and lures instead.
The great thing is you can start immediately with products that are already in your inventory. Let’s look at some examples of some “standard” upsell practices from top-performing ecommerce brands, then we’ll take a look at the one NOBODY is using:
Birchbox Upsells Minimal Cost Add-Ons
We previously wrote about Birchbox as a successful ecommerce subscription service. After customers select either a monthly or yearly subscription, they are offered an upgrade opportunity or upsell, inviting them to add on 2 more full-size luxury makeup products for a minimal cost. This is an upgrade of what they offer with a regular subscription, which is sample-sized products.
This works because it creates an added value to each box at a minimal cost to their existing or new customers (a total of $30/month? Not bad…). This adds a bit of encouragement to the value proposition Birchbox is trying to achieve.
Dollar Shave Club Dedicates an Entire Checkout Step to Upselling
The second step of their checkout process presents the buyer with two upsell opportunities – one is add-on products, and one is a bonus free month for referring friends.
Both offers are right there on the checkout screen. “Available Extras” shows complementary products that are lower priced.
I’m sure spending an extra $4-$8 isn’t too much of a stretch for dudes who would forego the drugstore in favor of a special shave club, right?
Next, the social sharing opportunity shows a pre-populated and witty share message that incentivizes the member with a chance to earn credits toward free months.
Finch Goods Upsells With Relevant Add-Ons
Offering add-ons just before a customer completes check-out is another effective upsell technique, because it’s customized to what they’re already purchasing.
Men’s luxury retailer Finch Goods has a pop-up add to cart featuring one product that can be added onto every order for $10, and it’s customized to what they’ve already added to their cart.
So it’s not a stretch to think someone buying luxury, designer shave cream might also be persuaded to buy scotch-flavored toothpicks? More of an indulgence than a necessity, but that’s what their offerings are all about.
The BEST Post-Purchase Upsell That Nobody is Using
When Shopify store BeeFriendly, an organic skincare line, started offering post-purchase upsells, they increased their AOV by an extra $12.50-$20.00 per order. Before upselling, their AOV was $58.04, which wasn’t bad when you consider their average product sells for around $35.
What was their upsell?
It’s crazy it worked so well, but all they did was offer more of the same product (in this case, their popular Face and Eye Cream) that the customer just bought, but 2 more for the price of 3…AFTER the purchase was already complete!
A true post-purchase offer. Not one that happens from a drip email marketing campaign, but directly in the checkout process after they’ve already paid for their product.The extra $12.50 that customers who took advantage of this upsell were spending may not sound like a huge leap, but when you consider that the store does about 10 orders a day and their annual income used to be around $200,000, the math shows:
$12.50 x 10 = $125
$125 x 365 days = $45,625.
That’s a 20% increase over their average annual sales, just with a simple upsell worth $12.50! That’s a nice chunk of extra change, which can then be invested back into the company.
Why Upsells Work & How You Can Get Started
#1 Free shipping is the easiest and most basic upsell you can offer, and many customers will happily do things like add on to their order so they can meet the minimum purchase amount (or item number) requirement to get it.
Customers are always looking for sites that offer free shipping. You can set a minimum threshold for free shipping (like spending $50) and ensure that you are still profitable. Most customers would rather spend an extra $10.00+ for more product, than spend their money on shipping fees.
#2 Offering other things of value for free, like a free month of a subscription service, is also an effective way to upsell. Dollar Shave Club does this in a way that means customers get something for free before even spending a dime.
Since you can select a plan that is FREE the first month, this upsell is easy for the customer to opt-in to (they haven’t even spent any money yet!).
#3 Upselling is a bulletproof strategy to increase your customer’s lifetime value. Once someone makes an upsell purchase, you can continue to offer them more upsells for repeat purchases, either through an email drip campaign or through behaviorial targeting.
There are many ways to do this, and not all require a site overhaul. You can offer customers complementary products before they complete the order (like Amazon’s “Recommended Products”), offer an upgrade for a few extra dollars, offer monthly subscriptions, offer users an upsell they can complete with one click of the mouse, use email marketing to continuously offer new products after they complete a sale, and create special discounts and promotions just for existing customers.
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