Ecommerce business owners who don’t market to their own subscribers are missing out on profits. Consumers who sign up for a recurring product or service are likely to increase their spending across the product category as a whole, according to Deloitte. It’s not a given those sales will go to your business — but you have a leg up on your competitors given your pre-existing relationship with your buyers.
Tap into consumers’ willingness to spend by offering smart upsells that give customers more value and boost your bottom line. A good upsell doesn’t just increase customer lifetime value (CLTV) and average order value (AOV), but it also makes a subscription feel new and exciting while strengthening your relationship with customer. Use these seven upsell techniques to strengthen customer relationships and increase your subscription retention rate.
Upselling and cross-selling are sales techniques that help brands generate more revenue from their existing customer base. Upselling encourages customers to purchase more expensive versions of products they already have. The upsell might be a premium model of the item or the same product with value-added features. Cross-selling, on the other hand, encourages sales of other related products that add value to their purchase.
Both sales strategies are common in subscription ecommerce. One common subscription upsell asks a customer to upgrade to a longer plan that provides new functionalities or products. A subscription cross-sell offer might include one-time supplementary products.
Say you sell a hair care subscription. You might upsell your customer from their ‘healthy hair’ package (sulfate-free shampoo and conditioner) to the ‘luscious locks’ package (which adds leave-in conditioner and a weekly hair mask). You might also try cross-selling them on your skincare subscription (“Love your skin for just $10!”) because your customers are the type to go for self-care purchases.
The best upsell offers combine ecommerce merchants’ inherent knowledge of their products with automations that approach users at the right time. Invest in a full-stack subscription commerce platform (like sticky.io) to help you gather the consumer data you need. Customer purchase histories, buying patterns and order trends help you understand what your subscribers find valuable.
Use this data to create customer cohorts — for example, customers who have added 5+ fashion add-ons or subscribers who purchased your Christmas special offer. Then, design upsell offers speaking to the interests of each particular group. Automate a marketing email campaign or create a popup to serve customers in each cohort the next time they log in.
Like all marketing pushes, your upsell campaigns can and should be optimized. You can specifically designate your upsell offers as such in sticky.io’s system to track purchase rates by campaign and calculate the revenue each upsell brings in. Over time, it will be easy to optimize your offerings for revenue and effectiveness.
It pays to understand how to upsell to existing customers. Follow these steps to set up a successful upsell flow in your subscription ecommerce store.
Not all upsell opportunities are relevant to every customer. Upsells are meant to enhance the perceived value to an existing customer. That’s why you should use customer data to make an appropriate pitch at a smart time rather than promoting a random upgrade to every subscriber.
You can use sticky.io to group customers based on data like purchase history or previous promotions they’ve participated in. Beauty box subscribers who responded to a previous deal offering an extra nail polish sample might not splurge for an at-home manicure package, but a subscription tier that offers more nail polish colors each month could be a hit.
Upselling isn’t about making you more money — it’s about providing your customers with more value. This idea is especially true for subscription-based businesses, which depend on long-term relationship building and nurturing. Cement your subscription as a necessity by connecting people with products and services they’ll love.
Customers don’t typically share their shopping goals with ecommerce companies (though you should pay attention to reviews that are explicit about the pain points your product addresses). Get an idea of what your buyers are thinking by looking at what brought them to you.
sticky.io offers Attribution Analysis to help you understand what marketing campaigns are driving site traffic. Craft upsell messages that are variations on your most successful marketing efforts, then A/B test your customers to see which ones speak to their needs.
Budget-conscious customers may avoid an upsell offer due to its price — especially given the current economic downturn. Incentivize the upsell purchase to get the product in your buyers’ hands and let them experience for themselves why the extra cost is worth it. Use pricing tactics like:
Keep in mind, buyers don’t want to feel tricked into overspending, even if they’re receiving a discount. Be clear about the final price as you entice subscribers with these offers.
Call out the customer journey in your upsell process to encourage users to spend more once they hit certain milestones with your company. For instance, do customers start to engage less with your website and email marketing six months into their subscription? Boost their excitement with a “six-month special” that celebrates their commitment to your product. Replenishment subscriptions rely on consumers running out of a product — so why not suggest an upgrade when a subscriber needs a refill?
Use sticky.io’s customer insights to track special events and purchase history so you can find the optimal milestone to kick off your upsell campaign.
A disgruntled subscriber won’t want to spend more with your company — they’ll likely see an upsell opportunity as tone-deaf and opportunist. Assess customers’ behavior to determine whether they’re a good target for an upsell or whether you need to invest more into improving the relationship first.
Get a feel for customer satisfaction by asking customers to rate their product and subscription experience after each shipment. Those who are consistently happy with your brand are more likely to increase their spending. You can also look at AOV trends: Customers who have shown a willingness to spend more will appreciate a targeted, valuable upsell offer.
On the other hand, make sure you pay attention to customer analytics like sticky.io’s at-risk customer label and refund and chargeback records. Attempting to upsell an unhappy customer may be the thing that pushes them to unsubscribe permanently.
The best way to convince a customer an upsell will help them is to show how it’s helped others. Promote your upsell offers using social proof marketing like:
If you’re asking your customers for reviews, as we suggested in our last point, look for quotes that give specifics regarding the value of an upsell. You can also run social media contests or search your brand name for user-generated content (UGC) from happy buyers. Just make sure you ask before sharing this information on your website!
Convince customers it’s time to make the purchase by showing why it’s important for them to do so now. The two most common urgency tactics among ecommerce merchants are limited-time pricing and limited product quantity.
Communicate limited-time pricing through marketing emails that bring customers to your site during the designated sale period Once they’re there, you might reinforce the idea by displaying a timer or “days left” counter that shows how soon your sale will end.
Denote limited product quantity on product pages, in offer popups and/or in the shopping cart. sticky.io’s Sales by Products report makes it a cinch to stay on top of your inventory and keep would-be buyers up-to-date on your stock.
Maintaining strong relationships with previous and existing customers can promote brand loyalty and, more importantly, reduce costs associated with acquiring new business. Both benefits are especially important given the current economy — and a good upsell strategy can help you achieve them.
That’s because upsells are part of a good retention strategy. Ultimately, subscribers stick around because they feel they’re receiving something of value they couldn’t receive elsewhere. We’ve shown how a good upsell uses customer data to offer personalized products or benefits that match subscribers’ needs. Merchants that get upsells right boost customers’ excitement by giving them something new to love.
The economic benefit of upsells goes beyond reducing a merchant’s need to bring in new subscribers. Consider: An upsell that increases the amount a consumer spends with you each month and makes them more likely to stick around is a CLTV multiplier.
Your consumers are under the same economic pressures you are right now, which means both of you are facing hard choices. Look out for both of your interests by finding a way to provide more value to them in a way that’s cost-effective for you.