How to Grow Your Business with OneClickUpsell Part 1

December 13, 2016 5:02 am | Published by |

Welcome to the first post in my 3-post series,
“How to Grow Your Business with Zipify OneClickUpsell.”

Here's what you can expect from this series:

  • This post will explain how upsells and cross-sells increase your Average Order Value and Customer Lifetime Value, and why that is so essential to growing your business.
  • Post #2 will show you the different kinds of upsells you can implement on your store to start seeing extra profit from Zipify OneClickUpsell right away.
  • And post #3 will focus on the bonus 10x Profit Post-Purchase Email Sequence that you get with your app. This series of emails will allow you to follow up with your customers to make sure they buy from you again (another crucial element for growing and sustaining a business).

Before I begin, I'll mention that the purpose of this post is not to help you set up your application. Zipify OneClickUpsell (OCU) comes with a full help section that explains everything you need to know about how to configure the application, and how to start offering one click post-purchase upsells on your Shopify store. (You can go to the help section by clicking here.)

But if you're interested in learning more about how to grow your business using upsells and cross-sells, then my friend—you’re in the right place!

And here's a little context on how profitable this app can be for your business: as I showed in this case study video, implementing Zipify OCU on one of my lower-earning stores increased my Average Order Value by $12.50 almost overnight. That increase comes to an additional $50,000 of revenue over the year for my store.

This is what I want for you and your store.

Upsells and Cross-Sells

Okay, let's get something out of the way: What is upselling?

If you search the web, you will find several definitions. In this post, however, I'll use a specific definition that is beneficial to our goals:

An upsell is an offer for an additional product or service that is made anytime during the customer's session (including after their purchase).

So how does this differ from a cross-sell?

Again, you will find different definitions comparing the two. For our purposes, let's define a cross-sell as:

An offer for additional products or services that is made any time after the customer's session (say, the next day).

So if someone is buying a camera and you offer them batteries—either before or after they check out—that's an upsell (as long as they're still on your website). If they buy a camera and batteries and then leave your store, and you email them the next day offering a tripod, that's a cross-sell.

Okay, now that that's out of the way, let's get into the fun stuff. How is Zipify OCU going to grow your business?

Average Order Value and Customer Lifetime Value

Did you know there are only three ways to grow any business? They are:

1. Increase how many customers you have

2. Increase how much your customers spend per purchase

3. Increase how often your customers make a purchase

People love to focus on #1, which is usually referred to as traffic and conversion. Increasing how many customers you have means you have to find people who have never purchased from you before, get them to your site, and convince them to buy. It's an essential step for any business, but it's a lot of work.

And because of all the steps involved, a customer's first purchase is also the one that costs you the most money to acquire. In fact, many ecommerce stores acquire this first purchase at break even, or even at a loss. How can they afford to do that? Because of Customer Lifetime Value.

Customer Lifetime Value is the amount of revenue you gain from a single customer throughout their relationship with your brand.

Let's look at my lifetime value with one brand compared to another. I have purchased from eBay maybe once or twice, and to them, my customer lifetime value is around $100. Amazon, on the other hand, I purchase from once a week, and my customer lifetime value with them is probably in the tens of thousands. Which do you think would be willing to spend more to acquire me as a customer?

Amazon Founder and CEO Jeff Bezos famously said, "Your margin is my opportunity." He knows Amazon can afford to spend more to acquire a customer than their competitors because they will make that money back (and a lot more) throughout their customers' lifetime. (In 2006, Amazon said that over 35% of their revenue came from upsells and cross-sells. I wonder how much it is now.)

So how do you increase customer lifetime value? By focusing on the other two methods for growing your business:

1. Increase how many customers you have

2. Increasing how much your customers spend per purchase

3. Increasing how often your customers make a purchase

Zipify OCU focuses on #2, which is a measurement of Average Order Value (AOV): the average amount of money a customer spends when they make a purchase. (And our post-purchase email sequence focuses on #3, but more on that in another post.)

Say your average customer spends $20 in your store. You could try to get a new customer to come and spend $20 (and go through all the steps of traffic and conversion listed above), or, you could focus on getting the customers you already have to spend $40 instead of $20—simply by offering upsells.

And to increase your Average Order Value (i.e. to sell more products), you have to make more offers. That's where upsells come in. Customers come looking for one product, and because you make them additional offers, they leave either with additional products or a better version of the product they originally wanted.

The Perfect Offer: Post-Purchase Upselling

Unfortunately, making additional offers can backfire. By increasing the number of offers you make, you also increase the amount of friction your customer experiences, which impedes the buying process. In some cases, your upsell offers will annoy your customer and you'll actually lose your initial sale. If someone is on your site and they're interested in buying, it's a good idea to just let them do it!

Which is why Zipify OCU makes these offers post-purchase. You allow people to complete their order, and then you make additional offers. This way, there’s no risk of losing your initial sale.

And because buyers experience a small rush after making a purchase, they're actually more likely to purchase additional products.

That's not to say that we are trying to take advantage of our customers. As I'm going to explain in my next post, "What Kind of Upsell Should I Offer?" the two tenants of upselling are

1. Make relevant offers

2. Give 'em a deal.

You want people to feel like you're paying attention. If a customer orders a camera and you offer them batteries as an upsell, it feels like you're paying attention. If they order a camera and you offer them a basketball, it feels like you're not paying attention. That product isn't relevant to them.

And if you offer your customer batteries and you give them a discount, you're providing both a relevant product and a good deal. You want the upsell to feel like a win for them—if they win, you win.

Because upselling isn't just an opportunity to get more money; it's an opportunity to develop your relationship with your customer. If you can anticipate their needs and/or give them a good deal, they'll leave feeling positive about your interaction and they will be more likely to do business with you in the future.

In my next post, we'll get more into what kind of upsells are right for your store.

Comments

comments

Also on the blog: