Psychology in Action? Effective Upselling with Shopify Apps
When consulting for Shopify stores, once purchase rates have improved and repeat purchase initiatives have stabilized, I start ramping up advertising.
At that point, if we can simultaneously increase average order value, the cost-effectiveness of advertising becomes easier to justify and opens up more advertising options.
And upselling is an effective technique for increasing average order value.
In this article, we introduce how to effectively leverage upselling in your Shopify store.
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The Difference Between Upselling and Cross-Selling
Do you know the difference between upselling and cross-selling? They are often confused.
Upselling is a sales technique that suggests an upgraded version of the product a customer has purchased or is considering purchasing. Cross-selling, on the other hand, is a sales technique that suggests related products to what a customer has purchased or is considering purchasing.
Using the iPhone page as an example, suggesting an iPhone 11 Pro or iPhone 11 Pro Max to a customer considering an iPhone SE is upselling.
On the other hand, suggesting a smartphone case to someone considering an iPhone is cross-selling.
The Sales Impact of Upselling
According to a study conducted by Predictive Intent, upselling impacts an average of 4% of revenue, compared to cross-selling which accounts for approximately 0.50% of revenue on average (reference: Upselling is 20 times more effective than cross-selling online).
Put bluntly, upselling has roughly 20 times more revenue impact than cross-selling.
Of course, since the tactics are different, a direct comparison isn't straightforward, but if you're doing cross-selling but not upselling, it's worth adding upselling to your strategy.
Key Points for Upselling
Here's a summary of the key things to keep in mind when designing an upsell strategy.
As you'll see when you read through, these are things a store clerk would naturally do in a physical store. Consulting with your sales staff might yield some excellent improvement ideas.
Products to Suggest
As with the iPhone example, it's important to recommend products that are highly relevant and best-selling.
No matter how much of an upgrade a product is, suggesting an unpopular item won't lead to sales, and may actually cause unnecessary deliberation that hurts your CVR (conversion rate).
Timing of the Suggestion
It's said that you should make the suggestion when the customer's intent to purchase is strongest.
Specifically, triggering an upsell at checkout or when the customer clicks the add-to-cart button tends to increase the acceptance rate.
The Shopify apps for upselling introduced later can also trigger upsells at these key moments.
CVR (Conversion Rate)
If your CVR is low, it's better to focus on improving it before implementing upsell tactics.
Running upsells with a low CVR can further decrease conversions, and it also makes it harder to evaluate whether the tactic was effective.
Number of Products to Suggest
For upsell suggestions, I recommend limiting the options to three at most. Too many choices tend to cause indecision and don't perform well.
Additionally, the products you suggest as upsells should be easy to compare with the item being considered.
For example, they should be essentially the same product but with upgrades in size, specifications, design, or materials.
The example below is the upsell screen from luggage brand AWAY. The size differences and their corresponding use cases are explained clearly with diagrams.
Pay Attention to Price Differences
This also relates to your overall pricing strategy, but how much of a price difference you set between the standard product and the upgraded version is also important.
There are cases where a large price gap makes the upgrade look more attractive, and cases where a smaller price gap makes it easier to choose.
It's worth forming a hypothesis but also running experiments to find out what works.
How to Present Upsell Products
When presenting upsell products, it's important to clearly communicate why the higher-priced option is worth it.
While some Shopify apps support upselling, they typically only display a product image, product name, a brief description, and price during the upsell offer, so products that are easy to understand at a glance are best suited for upselling.
The example below is Dell's optional support service selection screen. By sandwiching your recommended product between a higher-priced and a lower-priced option — like the middle tier in a good-better-best lineup — the recommended option becomes more likely to be chosen.
Upselling Beyond Products
Upselling isn't limited to products. Common examples include the following.
- Free replacement
- Free repair
- Customization
Apple's AppleCare is a prime example of an after-sales service upsell.
Customization refers to services such as adding an original design or a name to a product.
Luggage brand AWAY upsells with a customization service that engraves names onto luggage tags.
Measure Effectiveness
It's necessary to evaluate whether your upsell is working, and if not, to try changing the suggested products or the timing of the suggestion.
Most Shopify apps that support upselling also include reporting features, so make sure to check whether your efforts are producing results.
Upselling in Practice with Shopify Apps
Using Shopify apps makes it easy to implement upselling.
Searching for "Upsell" in the Shopify App Store returns many apps. Each app has its own capabilities and limitations, but popular options include Bold Upsell and ReConvert Upsell & Cross Sell.
Product Page
On the product page, an effective approach is to trigger the upsell at the moment a customer clicks Add to Cart. Bold Upsell allows you to select "Add to Cart" as the upsell trigger.
On the actual product screen, an upsell prompt like the one below is displayed.
When the customer clicks the "Replace Item" button, the item added to the cart is replaced with the upgraded product instead of the original. For those familiar with Shopify development, this is functionality built using the familiar Ajax API.
You can set up multiple upgrade products, so if a customer declines one offer, you can present the next product. For example, if the coffee maker upgrade is declined, you could then suggest coffee beans.
The messaging used in the offer is also important. While you can't change the product images from the standard ones, you can create custom product names and descriptions specifically for the upsell, so craft names and titles that clearly communicate the appeal of the upgrade.
Cart Page
With Bold Upsell, you can implement the same type of upsell on the cart page as well, triggered when the customer clicks the checkout button.
Since presenting the same offer as on the product page when transitioning from the cart to checkout can feel repetitive and annoying, it's better to suggest things like gift wrapping, consumable accessories, or warranties (return guarantees or free repairs).
Bold Upsell is feature-rich and, just like on the product page, allows you to determine upsell offers based on the items in the cart and their total value.
Thank You Page
Using ReConvert Upsell & Cross Sell, you can present upsells immediately after a purchase is completed.
To set it up, you first create a template for the thank you page.
You can use a wide variety of elements beyond just the upsell slot, such as displaying discount coupons, making it quite flexible — it can also be used simply as a page builder for your thank you page.
You can create multiple thank you page templates and serve different ones based on conditions. Next, you configure those conditions.
For example, you can serve different templates for customers who are good candidates for an upsell offer versus customers who would benefit more from a discounted offer.
For those who think "Designing templates sounds like a hassle!", free templates are also available to use.
Upselling via post-purchase emails is, of course, also possible.
Apps like Omnisend, Klaviyo, and Mailchimp allow you to suggest upsell products tailored to what the customer purchased.
Via email, it's also effective to suggest a subscription plan to customers who purchased an entry-level product.
Post-purchase emails involve many tasks — requesting reviews, driving newsletter sign-ups and social media follows — so be careful not to let different initiatives interfere with one another.
Thorough Execution of Cross-Selling and Upselling Operations with StoreHero
StoreHero supports merchants facing challenges growing Shopify sales through thorough execution of growth initiatives.
For cross-selling and upselling operations as well, we leverage the StoreHero growth platform to utilize performance and inventory data for each product and SKU, enabling automatic optimization of cross-sell and upsell products and offers within CRM and on-site. This supports highly detailed operations and large-scale initiative implementation that would be impossible with manual management, driving continuous growth.
We are currently offering free store diagnostics. If you have challenges with cross-selling, upselling, or growth initiatives in general, please contact us. Learn more about our free store diagnostic here
Summary
We've introduced how to implement upselling in your Shopify store.
Once your overall conversion rate has improved and your advertising operations are on track, that's the right time to make upselling tactics work for you.
Take advantage of Shopify apps and give upselling a try in your store.