The Psychology Behind Up-Selling Your Customer...

The Psychology Behind Up-Selling Your Customer...

We are going to be going over the psychology of upselling. This is going to be specifically for e-commerce businesses, softwares and service businesses. Service businesses that will list their services for purchase on the internet. Upselling has been seen to increase sales by as much as 4% for the people that implement it. It's all about striking while the iron is hot. While someone's ready to purchase, upselling on them is when you kind of have to get them started on their own slippery slope while they're purchasing.

The first thing I want to go over is what upselling is. Upselling is when the seller encourages the customer to spend more by recommending a higher priced alternative of the current consideration. So if they're looking for something at a $50 price point, upsell would be something at a $60 price point.

This could be 4% of additional revenue for your business to put that in perspective. So if you do $100,000 dollars per month, 4% is $4,000 more over the course of the year. That equates to $48,000 in revenue, which is basically almost a whole month's or half of a month's income over the course of that entire year.

You have 12 calendar months to sell through. Act like you're the customer for a second. You're on your website, and you’re viewing it for the first time. You've basically taken the time to perform a basic product research or research the brand at least enough to have gotten you to the site.

Right? You've browsed through the website. You've learned about the product and now you are ready to add it to your cart. So it's right before you're going to click that button, that's where we're talking about, as well as the actual cart itself.

Before they click pay for the items, you can recommend an upsell item right at checkout. After you've gotten yourself there as the customer, you've basically decided that this is the product that you're going to use to fulfill the pain point or to serve whatever purpose, or reason that you're buying the product.

When you're in actual buying mode, this is where we're ready to attack. You have to remember as well that the customers are more open to it if there is more value being presented with the next item that you're recommending over to them. If they're trying to purchase a three piece set, you might be able to offer a five piece set for a small up-charge and the additional two pieces there could be the added value for the person to actually go into an upsell. 

Another good part about that is it's very convenient for the customer. So upselling, when you're listing new products underneath where they're shopping, is a great spot for you to basically upsell products and it's a win-win for both the customer and you. We obviously will collect more dollars based on the higher priced products because we got the upsell. So, now that we're clear exactly on what upselling is, as well as how, and why it works.

Let's get down to some things that you can consider when implementing upselling and some of what plays into the psychology behind upselling as well. The first thing that you can do is offer a side by side comparison of an alternative. We can start with the most basic thing: just a simple comparison of two different products.

Something that you've probably seen many times. So again, software as a service, if you're purchasing with say, Spotify or anything that offers a monthly plan, you'll probably know even in Netflix, you've probably seen this before, where it will list out the actual plan options. It'll show the list of deliverables beneath that plan and have different price points tagged to them.

Obviously putting them side by side so that if you're on the lowest plan, you can see everything that you're missing out. So that's the overall goal with a side by side comparison. The point is  making sure that they can see all the things that they're missing out on and they have to click past it purposefully and miss out on it because you're showing a side by side comparison.

This is a very popular thing for service based things. This can be done with products as well. You might have a basic color or one of the original runs sitting as the primary product selection. Next to it, you could either have a limited edit or special color options.

That would be the upsell showing a side by side comparison to where this person is feeling the psychological push to purchase the higher priced item, because it has more value. Again, tying to what we talked about. One of the other things to remember when going in for upsells is to make sure that you have reasonable alternatives for what the person is actually currently looking at.

If we're on a lawn care website and you're going to purchase a weed eater and a product that is put next to that in comparison is a full size lawn mower that is $4,000. That example misses on both of the fronts I was going to talk about. What you could have sold with the weed eater is maybe $10 weed eater line to go with it, oil or maintenance.

Um, so having something, again, like weed eat or string probably would've been a better placement as the upsell product. The weed eater could be a couple hundred dollars, whereas that lawnmower I was talking about specifically could be a couple thousand, so the price point is mismatched. And you'll notice that also applies to the weed eater string, being a good upsell for the weed eater. 

Present reasonable alternatives. Something else, if you have multiple clothes inside of your store, if someone is looking for hoodies, alternative upsells that are reasonable would be jackets, scarves, things that are related to winter. On top of that, if they're looking at $60 hoodies and maybe most of the things in your store are $600, that probably would be a time for you to show other $60 similar price pointed areas, not some of the other products in your shop that are really, really expensive. So, present reasonable alternatives. 

You can put these upgrades on the side by side comparisons, these work together, but you would basically want to show what a base product would be and then potential upgrades on top of it. So even back to that weed eater, this could be the string or this could be an additional attachment for it. As you've always seen on Amazon, they have the recommended products underneath. So that is where you can display bigger or better kits, bundles or different product opportunities there.

Making sure that upgrades are displayed into the customer's eyes as they're purchasing again, the psychology here is fear of missing out in a sense. It's like the person willingly passing up a better opportunity. Normally if they're going to sacrifice that is because the value trade off isn't there, meaning that they don't see the worthwhile and paying the extra amount for whatever the extra they're getting, or they don't have the actual purchasing power for it. Offer alternatives in your shop that have actually better ratings than maybe what their person is shopping for right now. Amazon does this really well. You might be looking at an item on Amazon and it could be three stars and not have many reviews. If you scroll down right beneath that, you're gonna see recommended products, they could all have five, five stars with 2000 views or a piece of evidence. That is called social proof.

Proof from a community or a group of people that you believe to be a real group of people serves as what we call social proof, basically allowing for your customer to be okay with purchasing something that they are unfamiliar with. The reason that they're comfortable with it is because they have the social proof from other people, many other people giving positive reviews.

So if you have lower performing items in your web store, this would be an option to push them toward the better performing items. That's another crafty way that you can accomplish that in terms of offerings for the psychological aspect. The approach for upselling customers is to use the reviews as social proof, ultimately convincing the person to purchase. Showing a more popular option is also a great option. A lot of businesses will position themselves in a way where they're putting the most popular package on the one that they actually do get really good margins on. Leveraging social proof, not only through the ratings, but through what we tell the customer is the most popular option through all of that. Those are the big things there. 

Now for my Shopify stores, or maybe people who are questioning Shopify! I picked out some automated tools that will actually help you with upselling. One of them is actually from Shopify.

It's just called Shopify's Product Up. It is the number one reviewed and most popular upsell on Shopify. Another one is pressing the shop's upsell module. That one does a good job of displaying specific categories and products in certain places for promotion.

There's a few third party plugins that can be installed into the site. So if you have products listed on there, you can tell these plugins what to do on the product listing and they will display products down underneath.

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