How to Increase Your Profits With Upsells, Cross-sells, and Downsells Instead of Desperately Looking for New Clients.
“Would you like fries with that?” is a classic McDonalds money maker. Why? Because it’s not the burgers, it’s the extra items that make this business profitable.
Did you know, you can leverage this exact strategy in your business, too!
Think about it: If a customer is already buying a burger, it’s highly probable they will like the fries too. And when it comes to sales, it’s always cheaper to sell more stuff to the same customer than to go looking for the new one. Nobody says you shouldn’t get those new customers, too. By all means, go get them, tiger! But maybe you can get some additional revenue from what you already have on hand? Don’t waste that opportunity!
Instead of spending time on generating traffic, advertising, and convincing new people that your stuff is worth buying, you just need to make sure that your existing customers are so happy they want to come back for more. This totally makes sense, right? But most importantly, it makes financial sense too!
Research done by Frederick Reichheld shows that increasing the numbers of existing customers that stay with you (customer retention) by 5% increases profits by 25%. Who wouldn’t like the one-fourth of the increase in profit, right?
Okay, so let’s do this!
You have three main options to consider here: Up-sell, cross-sell, and down-sell. We broke them down below (including examples), cause we’re that nice.
Take a look at which of them you can start using in your business right now to give your sales a nice boost.
What is up-selling? Up selling definition
Upselling is simply suggesting a bigger or more expensive product to a customer who is about to buy something. But why upselling is important? It’s very commonly used in business to increase the transaction value (a.k.a asking people to spend more). Because when somebody is ready to buy, it often doesn’t take much to encourage them to buy an upgraded version of the product.
How to upsell a product?
Let me explain it while sticking with McDonald’s example. It’s when you’re buying a burger & they ask you: “Would you like to make it a meal?” So you upgrade your order and pay a bit more.
Do you think can you leverage that in your business?
Take a look at other up-selling examples that may inspire you:
- Airlines ask travelers who book flights if they’re interested in paying more for seats with more legroom
- We used to make the offer to people who were buying our planners to get a package deal of 2 planners that last the whole year.
- Photographers can offer a full photo session to people ready to buy just a headshot.
- A coach can ask people interested in buying individual consultation hours to consider a bundle instead.
- If someone’s buying an online course, they can be asked to upgrade to the VIP version with additional benefits.
- If you’re selling a physical product, you can upsell to a better, more expensive version.
What is cross-selling? Cross selling definition
Cross-selling is suggesting a different, related product to a customer who is about to buy something.
How is cross-sell different from the upsell?
Upsell is like an upgrade to a better, bigger version, and cross-sell is adding another related product. But it’s not about something random. The better it compliments the primary product, the better it works.
This is super effective when presented on the checkout pages when people are almost at the end of the buying process. Works even better when combined with free shipping (add another product and get free shipping)
How to cross-sell a product?
First of all, think whether people who buy your product have everything they need. Would they be able to benefit from the purchase right away? Is there any other product that goes perfectly well with this? Is there another product that can make the first product they put in the cart even better?
This is precisely what the McDonald’s “Would you like fries with that?” is about.
Other cross selling examples:
- Popularized by Amazon: “Customers who bought this item also bought,” (BTW after introduction, this claim was reported to contribute to as much as 35% of Amazon revenue!) or “Frequently bought together,” or “You may also like.” With these statements, you can give customers more than one choice to pair with the product they were initially interested in.
- In electronics stores, it is often the insurance you can add to the products you buy.
- We used to cross-sell the productivity course with our planner. As people who were purchasing a planer wanted to use it more efficiently and use productivity tips that we had in mind when designing the planner.
- For physical products it could be:
- Batteries (nothing’s more infuriating than reading “batteries not included” when you want to use something right away),
- Cases, boxes, wrappings, etc. (if the product is expensive, can be easily damaged, tiny, etc.),
- Pens, pencils, markers, etc. (people want to use those planners, whiteboards, and pretty notebooks right away)
What is down-selling? Down selling definition
This one is a bit different. Downselling is not about selling more.
It’s about capturing those who cannot afford your main products.
In other words, it’s suggesting a smaller, more affordable product, to people who are hesitating and potentially trying to back down from a purchase.
Why? Because selling something is better than nothing, right? Especially when you pay for ads to get people to view your page.
Downsells can be both a smaller, cheaper version of the same product or an alternative product at a lower price. Downsells are also an excellent way to deal with out of stock of the more expensive product.
How to downsell a product?
Continuing with McDonald’s it’s their Value Picks & McCafé (although they don’t offer this proactively). The idea is: “Not that hungry? Get just a burger or at least some coffee!”
You want to be careful and discreet with your downsells. If your customers learn that they will always get a better price when they skip the original offer, then they will stop buying the full price stuff.
So how do you know when to offer a downsell not to lose people who could have bought the regular offer? Yes, you’re right – you don’t want to introduce it too early. The cool thing is, you actually can wait. This strategy can be used after people leave your website without buying. This is when downsells come into play. It works best as part of your retargeting campaign. A campaign where the exclusive offers are sent in email or through retargeting ads only to people who were already visiting your website to encourage them to return and make a purchase.
It’s all possible thanks to two tools:
- Exit Intent Popups – these are the popups that detect when someone is about to leave your site and encourage them to subscribe to your newsletter before they go. This allows you to capture email addresses of those who didn’t purchase and email them some damn good deals. Hint: You can offer them a lead magnet to make opting-in a no-brainer. You can build exit intent popups with ThriveThemes if you’re using WordPress or ClickFunnels
- Tracking pixels, for example, Facebook Pixel that can help you show your Facebook Ads only to those who previously visited a website but didn’t purchase. Use Pixel Your Site Pro WordPress plugin to get your pixel set up.
What are the things you can do? See some down selling examples:
- The classic version of a downsell is offering time-limited discounts, and special one-time-offers use urgency to incentivize people to come back and get a better deal but only if they act quickly.
- Online courses with no-support are also a quite common version of the downsells. This can be offered after you make sure someone’s not yet ready for your fat, big, totally awesome online mastermind or high-ticket online course. These are often the same version of the program, just offered with fewer deliverables (usually without the most time-consuming elements like without live support calls, private Facebook Group access, one-on-one coaching, nor any bonuses to justify the lower price)
- Photographers can suggest quick mini-sessions for those who do not want their standard offer, a bundle of 3 photos instead of for example 10.
- Selling printed stuff like books, planners, graphics? Offer a downloadable version (i.e., ebook or PDF).
- Running a 2-day workshop? Offer a few-hours event sometime later for those who didn’t attend the full version.
- A pop-up encourages an immediate purchase when someone is abandoning their cart.
Mistakes to Avoid
So what do you think? Can you imagine what these can do to your business? Are you already having some ideas? I bet you do!
But before you jump straight to creating your offers, just read till the end, because we cover some of the mistakes you don’t want to make!
And here’s the clue: it all has to be relevant to your customers. So be reasonable and avoid these mistakes:
- Too Pushy: No matter how much you believe in your offer, nobody likes pushy approach. How to upsell without being pushy? Be helpful and genuine. Your goal is to help people make an educated decision about your product, not make them buy stuff. If they buy your product because they were pushed, they will either ask for a refund or never ever buy from you again.
- Too shy. We get it – we just said: “don’t be pushy.” And we know that most of the people are afraid that the customer will say ‘no.’ So you may be tempted to be less direct or even not to ask at all. Don’t do that! Those who ask sell a lot more. Remember: you are just trying to give your customer a choice and help them make better decisions. There’s nothing wrong with that, even if their decision is “no.” So make asking a simple part of your selling process. Don’t overthink it.
- Too Expensive: Be reasonable. The upsells & cross-sells should have a relatively small cost. It’s not about making people buy all you have. Otherwise, you’re risking people walking away without purchasing anything at all. Some marketers indicate the rule of 25% (the additional products should not exceed 25% of the price of the first product that the customer wants to buy) but you know your customers the best, so just use common sense, okay?
- Not Relevant: It’s not about offering some random products outside your client price point. These strategies must be done right, or you risk losing a sale. Think about helping your potential clients. Help them achieve their goal, make sure they have everything they need, and that the price point is just right for them. Make the offers so good, they are hard to refuse!
- Too complicated: Don’t make it too fancy. Don’t introduce complicated products that need a lot of explaining. Don’t use complicated words, nor jargon. This will make people confused, overwhelmed, and very likely to pass on the offer. The beauty of these strategies lies in simplicity. It has to be a quick decision. A straightforward proposal is why McDonald’s is so good at this. Just make your offers as simple as “Would you like to make it into a meal for just two more dollars?”
How does it work together?
So you may be thinking: Upsell, cross-sell or downsell? Can I use them all?
By all means (read our GUIDE HERE)! Combine all three as long as it does make sense for your customers! Or choose only one that works for you.
This is a simple process that works for us:
- When somebody downloads our Lead Magnet, we leverage the opportunity to add another call to action on the Thank-You-Page. It’s usually a one-time-offer that lasts for a very short period (urgency).
- Then we use our email sequence to introduce the exclusive offers. Usually, it’s a smaller offer (a trip-wire,) followed by a bigger product (with some time-sensitive bonuses), sometimes followed by a downsell or cross-sell offer.
- When we sell our signature masterminds, we often incorporate a standard and a VIP version as an upsell.
- For our planners, we constantly offer a bundle upsell.
- Finally, we use retargeting ads targeting those who previously visited our landing page but didn’t purchase. Sometimes (but not always) they include some kind of incentive for taking action.
Sometimes we add more to the list, but pretty much that’s it!
Okay, so now you know it all.
The only question is: Are you ready to implement these techniques in your business?
To be honest, nowadays with all the online tools (check-out the tools that help us kick ass), doing this may be way easier than you think. So don’t wait!
Make sure you go through our Ultimate Guide on how to use these techniques to start and grow your online business!