If you're already selling anything online, you're about to discover a quick and easy way to get extra revenue from your site with very little added--or in some cases zero--expense!
First, a quick primer. There are three ways to grow your business:
- Getting more customers
- Increasing the transaction size (i.e., getting customers to pay more)
- Increasing the frequency of purchases (i.e., getting customers to buy more often)
For some strange reason, virtually every business focuses solely on the first way. There isn't anything inherently wrong with that approach, but it's the most costly way to increase revenue and it usually means you're leaving the lion's share of the profits on the table.
To get the biggest bang for you buck, you need to incorporate the two other ways, starting with increasing your transaction size. This is the easiest way to boost your revenue.
Car dealers are excellent at using this technique. Once you've agreed to buy a car, you're given several "opportunities" to take advantage of dealer financing, extended warranties, rust coating, a LowJack security system, etc. These additions will normally add as much or more profit to the dealer as the original sale.
The technique is also used every time someone orders something at McDonald's. Who hasn't heard "want fries with that?" or "would you like that super-sized?" It may bump the cost of your meal by mere pennies but multiplied by "over a billion served," you'll see it makes serious dollars for the company.
And of course, anyone who has ever called a late-night infomercial has experienced this technique. When an order gets placed, the consumer will inevitably be offered a special deal on the third bottle of super-grime cleaner if they buy two bottles.
This technique of offering "add-ons" or "bumps" completes the art of the upsell. Without going into the psychological reasons about why this technique is so effective, the important thing to keep in mind is that it can on average boost profits by 20 to 66 percent simply by asking your own version of "want fries with that?"
This works even better and easier online. Here are three ways to use the power of the upsell online.
1. Put an upsell right on your order page. This is the easiest way to use upselling. It can be something as simple as putting a checkbox on your order forms and a sentence or two about an add-on like: "Yes, please add an additional year of in-home repair for only $49" or "Check here to add a bottle of miracle cleaner for only $17 more." You can expect to get a 25 percent upsell rate on average. That means one out of every four customers will give you more money just for adding a few words onto your order form.
2. Use an intermediary page. Once prospects click on the order button, they're taken to a new page. This page tells people about a special offer that is for "today only" and offers them a deluxe or gold version of whatever they intended to buy for "only X dollars more." You can make the upsell a big-dollar amount or a small insignificant little bump. Think of technique as the same thing as going in to buy a 99 cent burger and being offered a "value meal."
I wish I could give you an average increase for this, but it varies by product and industry. Having said that, I'll share how it works for me and reiterate the particular nuances. My InstantSalesLetters.com site sells a $40 product. When a customer clicks to buy, they are sent to an intermediary page offering a gold or bigger package for an additional $15.
They figure, Heck, if I was going to spend 40 bucks on Instant Sales Letters, I might as well spend $15 more and get the whole shebang. The way I present the offer is that it's only $15 more, not $54.97. The $15 seems small in relation to the $39.97 they were going to spend anyway. My numbers have been quite good using this technique--as high as 68 percent some days. You get that additional profit margin just by inserting this one extra page.
3. Recommend a product or service. Anytime you buy something from Amazon, that's exactly what they do. Up comes a page that says: "Customers who bought X also bought Y," and they show a slew of products to choose from. How difficult would it be for you to look at your records, see if there are any patterns on past purchases, and then on your order form or intermediary page say: "Customers who bought this computer game also bought a special TV adapter and a 12 pack of batteries"?
Now you have to play fair and let people get the original price and package you offered, but there's no reason you shouldn't add a complementary upsell immediately. This method is one of the easiest--and most profitable--techniques you can start implementing right away. You simply need to come up with a couple of more compelling bonuses, packages or add-ons that people will get for the upgrade.
Here's a final, advanced tip: There is no reason you can't use more than one upsell. You can have a package offer on your intermediary page (your value meal) with an add-on on your order form (super-size), and also say something eqivalent to: "Customers who bought our super-sized, value meal also bought a hot apple pie and a chocolate sundae."
Yanik Silver is the creator and author of several bestselling online products. His newest book, Moonlighting on the Internet from Entrepreneur Press shows how anyone can add an extra paycheck online each month--without an additional job. More information and additional resources can be found at MoonlightingOnTheInternet.com.
Yanik Silver, a serial entrepreneur based in Potomac, Md., is the author of Maverick Startup: 11 X-Factors to Bootstrap From Zero to Six Figures and Beyond from Entrepreneur Press.