The moment your business has crossed the line of 3 products: it’s time to start cross-selling and upselling. A whole new playground to try your marketing techniques.
Planned well, upsells allows you to increase your order value with no extra investments on advertisement. It’s money sitting on the table – so grab it.
In Mindvalley, our upsells come after the customer submitted their credit card details for the main offer, but before they reach the access page, or thank you page. Each of our front end offers has 1-3 upsells: offers on the back end, which only customers can see.
If you have at least 3-4 products, you need upsells, that’s not even a question. But how do you know if your upsell strategy is successful?
Should you look at an upsell page just like at another sales page? Not exactly. When it comes to defining success of an upsell, many factors came in place.
1. Conversion rate of the page.
The upsell conversion rate is basically the percentage of customers who added your upsell to their initial order.
Example: let’s say you sell smartphones and upsell smartphone covers. You got 1000 visitors on your sales page, 30 of them bought a phone, and 6 of those added a cover to their order. In this case your sales page conversion rate is 3% and conversion of your upsell page is 20%.
2. Average Transaction Size
Calculating conversion rate of your upsell is easy. However, the worst thing you can do to your business is making decisions based on your conversion rates only.
Recently, we’ve added an upsell page to one of Mindvalley businesses. It converted at 5% percent – which is not an impressive number at all. But wait! It was a $500 upsell on a $100 product!
When it comes to upsell, it’s not enough to look at the conversion rate of the page. You should be also looking at the average size of the transaction.
Upsell Page Conversion Rate * Upsell Product Price = Average Transaction Size.
3. Upsell Flow (aka Upsell Combo)
Even when you know the average size that a particular transaction related to an upsell page, you still need something else in order to create the best upsell flow.
Your conversion rate is influenced not only by what the customer sees on the upsell page itself, but also by what he/she sees before and after that page.
Go through all the way your customers go, from the moment they click the “Add To Cart” button, until the moment they reach the “Thank You Page”. How many offers do they go through? How are those offers connected to one another? How does the pricing change, from one page to another?
Here is a Mindvalley case study
When we tried to implement a $500 upsell in Mindvalley upsell flow, we tried different versions of that same flow:
First, we offered the $500 upsell right after selling a $100 product. Result was quite satisfying: upsell page converted at 4.3%. After that page, we offered a second upsell: a small related product for about $50. This one was converting at 5% and adding $3 to each order.
Then we decided to reverse the flow. After the purchase, the small related product ($50) would come first and, following after, we would show the more expensive upsell ($500). It turned out this change gave us an increase in conversion rate for the more expensive upsell (now the pages converted at 7.3%)
Since the price remained the same, change in transaction size grew respectively.
What about the smaller upsell: did we notice a change in its conversion rate and size of the transaction? Yes. Did it drop significantly? No. In fact, this new flow benefited the conversion rate of a cheaper upsell: it increased from 5% to 12,9 %. That’s exactly what you should pay attention to: combined added value of all your upsets.
You must take an holistic look at your average transaction size and evaluate the how much each of your offers make it grow.
Here’s a simple way to do that:
- Take the Average Transaction Size formula and calculate it for each of your upsell pages in every different variations of an upsell flow
- Calculate the overall Transaction Size those upsells add to your order.
In the end, you are looking to increase an overall transaction size. All good until here? Now let’s scale up.
When someone becomes your customer, you want to be even more friendly with them and offer some of your products for a generous price – in case they decide to add them to an order.
How do you make sure you are not losing money when letting customers buy a product on a back end, instead of using this product to acquire new customers?
According to Chris Anderson (author of the “The Long Tail Model”): “If you just have products at the Head, you find that very quickly your customers want more and you can’t offer it. If you just have products at the Tail, you find that customers have no idea where to start”.
Head is your front end product. Tail – are all the products that you are going to upsell or cross-sell. Make sure that you get as many people as possible down into your sales funnel.
Start with your most appealing product, the one that has the biggest potential to get the most customers into your system. Once you have it, add the back end: series of upsells which are more niche or have less demand.
Here is another way to look at it: see your sales flow as a pipe with a series of filters. You know that you want to start off at the place where you have a biggest stream of customers. Take your best selling product with the largest market potential, and then add the second-stringers at the back end.
As everything else on your website, upsells should be tested! However, you do not need any special technology to define your best performing upsell. It’s enough to know how many people took your initial offer and then, out of them, how many of them ended up taking one or two of your upsells.
Having this information, you can alway experiment and prove advantage of different upsell flows.