If you are a marketer or an entrepreneur selling products or services, especially online, there are thousands of sales techniques that you can utilize. However, there’s no such thing as a perfect technique and they are all highly dependent on the product or service that you are selling.
But once the user has decided to purchase your product, what can you do to make the sale even more profitable?
That’s when upselling becomes a powerful tool.
Let’s find out the best upselling definition and how to exploit its potential within a mobile app.
What is the upselling definition?
Upselling is a sales technique where a seller motivates the customer to purchase an upgraded or premium option of the product the buyer has decided to purchase.
The goal is to make that single sale more profitable, keeping the same product but offer an enhanced solution.
A similar technique, mentioned many times together with upselling, is cross-selling. The goal is the same, make the sale more profitable, but the way how it is done is different.
Cross-selling focuses on offering more, supplementary products or services together with the product that the customer is planning to purchase, while upselling focuses on motivating the customer to purchase the enhanced option of the same product.
Upselling power is shown by statistics: it increases the revenue by 10-30% on average, upsells are 68% cheaper than acquiring a new customer, and lastly, on average 70-95% of revenue comes from upselling (if a company does it).
Now we know the upselling meaning. But in practice, how can it be done?
Upselling is not cross-selling
Even if the two terms are many times misinterpreted and used improperly, there is a huge difference between them. A good example to look at on how to exploit both of them have always been fast-food chains.
Let’s use their example to make it clear.
Think about a hungry customer entering a fast-food restaurant. If he would like to purchase a single, standard-sized hamburger:
- upselling would be to motivate him to purchase a bigger, premium version of the same hamburger.
- cross-selling would be to motivate him to purchase fries, a cola or both of them together with the standard hamburger.
Both of the two solutions give the same result: they increase the profit margin from that single purchase.
There are many strategies on how to perform both upselling and cross-selling, not just through marketing creativity, but pricing strategies, growth hacking techniques, packaging improvements and more.
Further on, we will focus just on upselling and find out how to exploit it. As we mentioned before, it has enormous potential if implemented within a mobile app: that’s where we wanna help you.
3 of the best upselling strategies (with examples)
Upselling is not always easy. It fits really well with some products and services, but not as well with others. But don’t worry. There are some popular strategies, tested by big players like Netflix or Spotify, that you can use to make your mobile app an upselling machine.
We defined the upselling meaning, the difference between it and cross-selling, now let’s go through some of the best upsell strategies that can be used within a mobile app.
The free trial upselling strategy is an older one, but still an effective one. With a free trial of your product, you let the users try the premium version, to let them see the value they will get if they purchase the product.
The length of the trial period varies between products: there are some that require longer periods (one month) and some shorter (one week). Think about your product and how much you think is needed to see its full potential.
Here, one of the best examples is Adobe Photoshop. They offer the possibility to try their premium product free of charge for 7 days. If you like it, you purchase it after the trial period, if not, goodbye.
The freemium upselling strategy has been really popular in the last few years. It works like this: you, as the seller, offer a basic, standard product, provided free of charge forever, and you upsell when the user wants additional features on the product.
This strategy emerged in the video game industry when software companies were offering a time and feature-limited version of the game to promote the full version of it.
When customers became more price-sensitive due to many similar alternatives available on the market, this strategy was expanded to other markets and products
A good example of freemium upselling is Spotify. Their main service is actually free. You can use it as much as you want, but with some restrictions: the download of the songs is not possible and you have to listen to many (really, tons) of advertisements between one song and the other.
You, as the user, will stick to the free version until the struggle you experience will become bigger than the money you are saving using the free version. When you will reach that point, they will be there, ready with the premium version that will end your suffering.
That’s another good way to upsell a product: you present the user with three (or even more) alternatives, with different prices and features, pointing out the one that has the best price/quality ratio.
While experimenting with this type of strategy, keep in mind that there are three main ways on how to upsell, based on the price:
- offer a version update of the standard product (ex. a better toothbrush rather than a standard one)
- offer incremental value from the standard product (ex. the digital version of a printed magazine purchased)
- offer customisation on the standard product (ex. customisation on a standard pair of shoes)
Let’s look at an example. Mailchimp, a provider of email marketing automation, offers four price alternatives. It’s easy to see which one is the best in terms of its price and value (especially because they are the first to point it out).
What about mobile apps?
The techniques mentioned before can be used, both on the web and on mobile apps, but what are the best opportunities to upsell with a mobile app?
First, a mobile app is on the user’s phone, and as we know that it’s the only thing that is always close to the user. You can always be there.
Second, understand the power of mobile push notifications. They are perfect to use in upselling strategies because you can reach the user exactly when he needs more.
Third, keep it easy. Think about a simple download option: podcasts, documents, videos; it is always better to have them downloaded. A simple way to upsell with a mobile app.
And if you haven’t got an app yet and would like to have one, don’t worry, we can help. Make your mobile app with us (no coding and no entry costs).
Have you ever heard of upselling before or have had an interesting experience with it? Tell us in the comments below.