Dropshipping is becoming more competitive these days and there is a great need to increase one's average order value. Each time a customer makes a purchase, the AOV (Average Order Value) is up to track the dollar amount spent by the customer. It is the total revenue of a company divided by its average order. When the average order value increases, there is an increase in revenue and profit; hence, there is more money to reinvest in your business and even more money for your pocket also.
This article is about how to increase the average order value, read on to know everything about upselling for more profits in your e-commerce business.
What Is Upselling?
Upselling is a sales technique that is used to convince buyer to make an order or a more expensive one aside the already placed order. When you upsell, it is not the same as when you cross sell. They are both different.
Upselling vs. Cross-Selling
Upselling means persuading your consumer to upgrade their already existing product, cross-selling means convincing your consumers to purchase a different product or a complementary product.
Upselling involves convincing your consumers to buy a more upgraded or more expensive version of the product they already have. Cross-selling is suggesting other relevant products that your consumers can try.
A common example occurs when you buy a cell phone in a phone store, and then suggest that you get a screen protector, which is an additional product to the one you have already gotten. For upselling, the operators in that phone store may suggest that instead of getting a mobile phone with about 64GB, you can get one with 128GB.
Upselling helps to foster and build a deeper relationship between a retailer and a consumer. It also increases the net profit contribution that a customer makes to your company over time. This is also known as the Customer Lifetime Value (CLV).
Fact: There is a 60-70% chance that you sell to an existing customer and a 5%-20% chance that you'll be selling to a new customer. Upselling can increase tremendously the average amount spent in dollars per order, which is the average order value, and even the overall revenue.
Top Upselling Examples to Learn from
How to sell online to increase average order value? There are various types of e-commerce upsell examples. Here are some of it.
1. Version Upgrade
In this upselling technique, you ask your existing product owners to upgrade to a different and better version of the one they currently have.
2. Product Protection
For this upselling technique, you ask your existing consumers to protect the product that they have already gotten by extending their warranty. This enables them to effectively protect their phones against future hazards.
3. Customization
This upselling technique enables you to increase your average order value by asking your consumers to customize their product by purchasing a series of new features.
4. Extended Service Period
This upselling technique offers existing customers better value for a longer contract or better deals for early renewals. For example, you can ask your customers to renew their subscription to a particular product of yours early and get additional bonuses by the end of the subscription.
5. The Bundle
Bundling is a bit of both upselling and cross-selling. Using this technique, you bring some package related items together and convince your consumers that it has a better value. Thus, the more people purchase the bundle, the more your average order value increases.
How to Upsell: 5 Best Upselling Techniques to Know
1. Help your customers win
When upselling, your main target should not just be about making sales. You should also provide a medium for your customers to benefit and profit from your sales. When you ensure this, you not only increase your average order value, you also develop a healthier ad stronger relationship with your customers. For example, you can offer a bundle of three products for a cheaper rate than the cost of buying these products separately. You win because you are making more sales and are increasing your average order value. At the same time, your consumers win because they are saving money and are getting the worth of their money.
2. Present it to be relevant with the order placed
One familiar upselling technique that McDonald uses is asking if you would like some fries with whatever you are selling. The tendency of getting the introduced item/product is higher because it is a matching one. As a business owner who wants to upsell, you must find the "fries" for your consumers. When it goes perfectly with what they already have, it will be hard for them to say no.
3. Make it solve a problem
Upselling becomes easier when the product or service you are rendering to your consumer is making life better for them. For example, when you buy new software that you have no idea how to install it, the salesperson upsells by telling you about the training they offer. This training will be hard for you to resist because it actually does solve a problem for you, and with it, you can successfully install your new software.
4. Focus on the consumers' needs
Even though upselling means more increase in your average order value, you still do not want to lose the consumers' trust in you. Thus, it is very important that you understand the buyer persona, be sure that what you are upselling to them is useful, that way you can retain your customers and can perform more business transactions with them.
5. Wait it out
Before upselling, wait for your customer to purchase the original product. It is only in few circumstances that it makes sense to upsell before they make the actual purchase. For instance, it makes no sense to buy a car charger if you have no car. It is after your customers have made the original purchase that you can begin to upsell to them.
Conclusion
Upselling is one great way to increase your average order value, as a businessperson. Different upselling techniques can increase your profit margin as a retailer. There are also other benefits of upselling. It fosters a healthy relationship between you and your customer. You can employ any of the upselling techniques listed in this article and start getting extra revenue.
Top Takeaway: Dropship with SaleYee.com & Upsell for Higher Profits
Apart from profitable high-quality dropshipping products at affordable prices, SaleYee Dropshipping Platform provides registered users with the free membership, exclusive discounts, fast and free delivery for you to earn more when upselling. Moreover, up to 3-months long after-sales period is offered, as well as 24/7 support to ensure maximum customer satisfaction.
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