How Upselling Helps You Increase Your Revenue?
Upsell is one of the most widely used concepts in marketing analytics. It is the process in which companies or brands persuade a customer to buy something additional or more expensive. This is generally done by getting a customer to spend more by buying an upgraded or premium version of what they are purchasing or purchasing add-on items. Up-selling is a suggestion to the customer of a product that they would enjoy more than the current product they have or are about to purchase but is a higher price. Your potential customers will tend to choose premium versions or models which will better fulfill their needs thereby increasing the Average Order Value. Companies that excel at upselling are few steps ahead at helping customers visualize the satisfaction they will get by purchasing a higher-priced item.
Why is Upselling Important?
Upselling influences the customer to buy more and it helps businesses to retain them. The most valuable customers are the ones that are buying new products, actively using them and staying loyal to the organization. It helps to increase customer lifetime value. It is a great idea to focus your actions on those customers with higher buying potential. There is a 60 to 70% chance that a customer who has bought already may convert, versus 10 to 30% chances by acquiring a new customer. Upselling is beneficial to both end of the marketing cycle i.e customers and firms
For the Customers:
- Getting better quality with the desired product
- Honest Product descriptions
- Focus on specific needs and preferences
For the Firm:
- Increasing the customer’s buying intent
- Increase Customer retention
- Creating a better relationship with customers through marketing
- Increasing CLV
- Higher Average Order Value
How is Upselling Done?
Upselling can effectively be displayed through comparison charts of market higher-end products to customers. Market basket analysis can be applied in supermarkets, e-commerce, travel, and insurance among other examples.
Start an Upselling Campaign
In this article, we have explored how the Market Basket Analysis method in Upselling can help you increase your sales. The approach is based on the theory that customers who buy a certain item or group of items are more likely to buy other premium items or group of items associated. This greatly helps in upselling and cross-selling as a result increasing the overall revenue and the customer lifetime value for the brand. Getting started with an Upselling campaign through Market Basket Analysis might need some work. You need to address a lot of quality issues with your transaction and user behavioural data.
This can involve a lot of time and resources, alternatively, you can let the team at Saras get you up to speed with the process and implement it in your system. Click here to contact our experts.
Contributed by: LAKSHMANAN S