In a nutshell, upselling is how retailers persuade customers to spend more money on products/services that complement the primary product the customer is already buying.
This is fundamental behavioral economics, taking human behavior and generating up-sells in an online retailer marketplace.
An upsell is usually an additional high-end product or part of a bundle.
If you’re buying a house with monthly payments of $949, adding another $39 a month for swimming pool maintenance doesn’t seem like much. This has been common with a local service provider marketplace and is now commonplace with just about every online retailer.
If you have ever shopped on Amazon or registered a domain name through GoDaddy, you have encountered upselling, especially during the checkout process.
Amazon is by far the best at the upsell. Amazon also effectively uses the cross-sell, which is when you recommend that your customer buys another product that complements their existing purchase, but usually from a different category, vendor or website.
And, they also use the pre-sell, which is bundling or reducing the price of higher-priced products, if you buy multiple products. The shipping cost might even be reduced or eliminated with a bundle.
For example, if you head over to Amazon and choose the Canon Powershot Elph digital camera, Amazon will automatically show you other items (a flash memory card and compact camera case) that are “frequently bought together,” as shown in the image above. That’s cross-selling!
It’s human behavior that we all want to get a good deal. A savvy online retailer turned behavioral economist will help us achieve this good feeling and get more sales in the process.
But, in terms of marketing strategy, upselling is the real winner. When Amazon introduced the upsell in 2006 (using the phrase “customers who bought this item also bought”), their sales increased by 35%.
In this post, I’ll dig into the upsell techniques that Amazon uses to persuade online shoppers to buy again and again. Here are 15 persuasion lessons from Amazon’s upsell strategy.
Lesson #1: Deliver Relevant Messages
If you want to attract the attention of your prospects, you must deliver relevant messages. Here’s how Amazon does it.
If you shop for a BOB Revolution Stroller right now, Amazon will suggest relevant items, perhaps not even with the same online retailer, that work seamlessly with the product. That makes it more likely that you will buy both items.
In terms of content marketing, relevance is the meeting point between what you have to say to your audience and what they truly want. Sendblaster’s image illustrates this well:
How do you deliver relevant messages?
The key to making relevance marketing work is studying your audience to find out what truly motivates them to take action. If you want people to act on your message, make it relevant and eliminate every form of manipulation.
Behavioral economists are experts on human behavior and have become modern day sales gurus.
In the case of Amazon, presenting a closely-related product inspires action without a hard sell.
In the content marketing age, whether you’re sending emails to your subscribers, writing a post or a press release, creating a video or recording a podcast, the words “relevance” and “value” are the two focal points in your message.
Traditional marketing doesn’t encourage either of them, which is why content marketing works.
Lesson #2: Create Scarcity
A relevant upsell with an element of scarcity will get people into the buying mood.
When you search for a product on Amazon, you can immediately see how many are left and there’s a neat call-to-action, too.
That’s pretty powerful persuasion. And, since the item is relevant to the buyer, there’s less buying resistance to the online retailer.
Creating a sense of scarcity can increase the demand for your product and motivate people to take immediate action.
Does scarcity really work? Yes, it does. Peep Laja of ConversionXL increased sales 332% by mentioning that only 5,000 packages were available.
How can you create scarcity in your offer?
Identify a need: What does your target audience need? Ask the people who subscribe to your email list to send you their challenges or create a simple survey to find the right answers. You can use Survey Monkey to do this for free.
Once again, human behavior wins out for the online retailer because people feel vested in what they helped develop as a solution.
Specify the available quantity: If you are promoting a product, make it clear in your copy how many are available. If you are a service provider, like one-on-one coaching or personal training, create scarcity by highlighting the limited number of places to your prospects (e.g. 50 slots available).
Lesson #3: Increase Perceived Value
Another subtle way to upsell is to bundle items together. Amazon does that a lot, as the screenshot above shows.
Research from Harvard Business School showed that where some customers waited before buying games consoles, but that bundles enticed some consumers to buy earlier.
There’s also a psychological reason why bundles work… it’s all about perceived value.
When two or more products/items are bundled together and sold as one, that can increase the perceived value, as well as the Average Order Value (AOV) of a particular product.
It works for almost anything.
DAC Group found that bundling multimedia and print ad placements for the Yellow Pages resulted in a median call increase of 47%.
The lesson here is that if you want to sell more of your products and services, increase their perceived value by offering bundles works for an online retailer to build on natural human behavior of getting value, real or perceived.
One example is a Skype call or email course as an add-on to a book purchase. If the bundle is both valuable and relevant (there’s that word again), you will persuade more people to buy. The perceived value may be less shipping cost if the items are purchased together.
Lesson #4: Use Color Psychology
Look at Amazon’s color scheme for its upsell. The item description, which is hyperlinked, is light blue, while the price is deep red (maroon).
The color for the price in the image above stands out. Deep red is associated with vigor, courage, and willpower.
I think Amazon puts prices in deep red because it gives online shoppers the courage to place the order immediately.
Here’s what this tells us: The colors that you use in your copy and blog matter a lot. According to Fast Company, color is behind 90% of the assessment of a product. Choose the right color and you help persuade people to press the “buy now” button.
In contrast, the wrong color can be distracting and make them leave. Once again, your color design should work with natural tendencies in human behavior.
Eric Graham saw a 36.3% CTR on blue, underlined links.
However, just because blue is often used for links doesn’t mean that you should use it. What truly matters is that you make your link distinct. Amazon does this – the underline appears when you hover your mouse over an item.
Lesson #5: Choose the Right Images
As part of the upsell, Amazon shows customers relevant product images that complement what shoppers had in mind.
In the example above, there are two color choices for a speaker, plus a case. Note that the images are clear and sharp. They are all Amazon retailers but not the same Amazon online retailer, but the perceived value is still there.
Sellbrite says that the product image is the most important part of a product listing. Potential consumers hardly buy anything without seeing it, so you need the right images to trigger a positive human behavior action.
Here’s another example of a great product image, from made.com. The armchairs shown on their homepage are beautiful and inviting, suggesting a warmth that makes you want to check out new releases.
They make an emotional connection with the reader. To do this on your blog and for your products, avoid cheesy stock photos.
Instead, use images that truly represent your product or service to increase conversion rates. Remember that human behavior dictates that consumers buy on emotion and later justify with logic.
The idea of using product images to inspire consumers may seem common, but the effect on sales and engagement can be enormous. That’s the reason why Amazon provides strict guidelines for sellers on the use of product images.
Lesson #6: Build Trust
In addition to being the best-loved online shopping brand, Amazon uses 5-star ratings and honest customer reviews to persuade people, both on the upsell and on normal product sales.
That’s because you don’t have to struggle to convince people to buy if you earn their trust.
Behavioral economists in the Amazon site development have focused on building trust in a pleasant user experience. Yes, they are using our own human behavior against us.
It works both ways. Andy Hanselman says that increasing ‘trust’ can improve customer loyalty to your brand by 44%. Meanwhile, a study cited by Tech Crunch showed that a change of half a star in Yelp ratings could adversely affect the perception of a restaurant.
Let’s face it, if you’re planning to buy a product on Amazon and it has more than 16,000 mostly positive ratings, human behavior says you’re going to pay attention. As well as the star rating, what people say is important too.
Guess what, behavioral economics is a fancy way to say consumers will buy, and buy more if they trust you and feel you are giving them value.
So, how can you build trust as a marketer? I think Marilyn Arnold from GKIC.com captured it in this comment:
In other words, let others tell your readers and customers how great you are. It works for Amazon, doesn’t it?
Lesson #7: Match Searchers’ Intent
What if you were shopping for wireless speakers on Amazon and got an upsell offer of a car stereo?
The chance that you would buy the upsell is slim to none. That’s why it’s important as an online retailer to tailor your upsell to what people are actually asking for.
The key to success with this strategy is to avoid making assumptions. As Forbes points out, that can seriously harm your business. Here’s how you can eliminate assumptions and give searchers what they are looking for with your upsell:
Step #1: Go to Google Keyword Planner and research keywords that relate to your planned upsell.
Step #2: Analyze your keywords to figure out why a potential customer would search for the phrase.
Let’s take an example:
Weight loss pills for women that work
The person who is searching for this phrase has probably tried a couple of weight loss pills and is tired of failure. She may have read a couple of reviews online but is still confused about what to do next and which product is right for her. That’s why she’s added the “that work” suffix to her search query.
If this is your niche, there’s an opportunity for an upsell. Your role as a marketer is to bridge the gap between your product and your audience’s needs. How do can you achieve that? Just follow step number 3…
Step #3: Start to extract answers by visiting other sites in your space, such as a weight loss blog or a store like Amazon, to see what pills have really helped other consumers within the last three months.
Once you have a few answers, you are ready to move on to step number 4.
Step #4: It’s now time to write your content. Now that you have proof that the product works, write content to deliver what your visitors are looking for. Even an online retailer needs to be a service provider; human behavior trusts the gurus of the world.
Here’s one possible headline:
Weight Loss Pills For Women That Work – 324 Consumer Reviews
As you write the content, concentrate on the benefits of the product, the stories of people who used it and how they used it. Link to success stories to back up your claims.
This four-step process works for any product or service and can make your upsell more appealing.
Lesson #8: Over-Deliver on People’s Expectations
Most online shoppers come to Amazon intending to buy an item and leave. But, as we all know, there’s always that human behavior, temptation, to stick around and buy something else – or spend a bit more than you had intended. Why? Because part of Amazon’s upsell success is over-delivering. That’s a stellar persuasion tactic.
As the Crew blog points out, over-delivering makes people happy, builds trust and creates great relationships, all of which can make them want to take action. Free shipping is a particularly effective selling point, which is why more retailers offer it, as the chart from Business Insider shows:
If you care about your audience, challenge yourself to exceed their expectations. A reduced shipping cost is a benefit but free shipping is usually the winner.
If, as a service provider, you promise a 1-hour coaching session, consider adding some extra time and a couple of chapters of your new book for free. It won’t cost you much, you will win big with increased trust and that is the key to winning lifelong customers.
Lesson #9: Establish a Rapport with Your Target Audience
You know what goes along with trust? Engagement, with which you are building rapport with your audience. Behavioral economics tells us it’s a key part of persuasion marketing.
One way to build rapport is by making them members of your own special club. That’s exactly what Amazon has done with its $99 a year Prime membership program. The program has experienced dazzling success, outshining other retailers. See the proof of their growth from Compete.com:
The beauty of Prime is that if you’re in it, you get discounts and benefits (over-delivering again). If you’re not, you probably want to be.
Amazon Prime is one way that Amazon builds a relationship with customers, making them more likely to respond to the upsell.
How can you do that for your business? Research shows that engaging people will get them more interested in you and make them listen. First, you have to listen to them. Ask questions and find out what their problems are, then answer their questions with your solution. In many cases your solution doesn’t have to be a product or a service, it could be advice delivered in the form of content.
You can also use email marketing, which is a powerful tool to drive engagement and help you connect with your audience.
Lesson #10: Be Consistent
Dan Norris, co-founder of WPCurve, correctly noted that growth is about profit and consistency. In other words, one month of increased profits doesn’t make your business successful. It has to be consistent.
But, it’s not just profits that need to be consistent. A vital element of persuasion is brand consistency. Your brand is much more than logos, symbols, and color. It’s how your target audience perceives you. Your message is part of that.
A consistent message builds trust, fulfills the expectations of your target audience, educates customers and boosts sales.
The world’s best-known brands, like Coca-Cola, know the importance of consistency (and when they mess with it, their own business suffers).
One of the reasons that Amazon is so persuasive is because of consistency. When you visit Amazon, you know you will find a wide product range, free shipping, discounts and product reviews.
You can also be consistent in producing useful and data-driven blog posts and helpful social media posts or email marketing campaigns. I know consistency pays off because sending 62,619,592 emails has produced great ROI for me.
Lesson #11: Make an Offer They Can’t Refuse
This is pretty straightforward. Whether you want to encourage people to join your list or to buy your product, making them an offer that they can’t refuse can help you win their hearts and business. Behavioral economists selling goods or service providers know this all too well and capitalize on it.
A upsell that offers value for your customers is too good to pass up. Here’s how Amazon does it.
If you decided to buy a new Blackmagic camera, wouldn’t you be happy to add a ScanDisk hard drive, save a little money and get free shipping? The upsell is irresistible, isn’t it?
Here’s another great example of an irresistible offer. Leadpages allowed industry experts and bloggers to list their landing page templates in its new marketplace for landing page templates and to get 100% sales commission. In other words, they didn’t take a cut for the listing.
My challenge to you: what can you offer your customers that they would find hard to refuse?
Lesson #12: Use the “Add to Cart” CTA on Buttons
Proimpact7 conducted an intensive study on call-to-action (CTA) buttons to determine how the wording can either increase or decrease sales. The two-week test found that when a CTA button said “buy now” or “purchase now,” conversions decreased by 9.61% and 14.50% respectively.
However, using “add to cart” on the button gave buyers the confidence to secure the item, without necessarily paying for it right away. Shipping cost may be reduced later based on the upsell, another positive positioning angle.
Amazon has been experimenting with the use of the “add to cart” button, especially on the upsell. Note that it’s easy to add the whole bundle to your cart – subtle, but effective.
It’s important to get the wording right. Email marketing company iContact does a great job of this:
The GetResponse home page takes a different approach.
“Try It Free” and “Buy Now” buttons are placed side by side. This gives the prospect/buyer the option to choose whichever one is right for them. The one on the left is for people who aren’t ready to commit fully, while the one on the right gets visitors to commit.
The words you choose persuade people to buy – see these 10 call-to-action case studies, so that you can find the right CTAs and increase conversions for a service provider.
Lesson #13: Showcase Results
Newton’s third law states: every action results in an equal and opposite reaction. In other words, put something in, get something back. This works for persuasion and content marketing, too. Give your audience what they are looking for and they will reward that value with their time, engagement, email address and money.
Amazon showcases results as part of its value exchange with shoppers. You see these in the detailed product description and in the consumer reviews.
You can do the same and increase conversion rates by providing useful content, meeting people’s needs and touching their lives in a special way, before asking them to either subscribe to your list or to buy your product.
Just like Amazon, you can showcase results on your landing pages, by including the results that you have achieved and testimonials from real people. That will increase engagement on your webpage, grow your list and boost your income.
Lesson #14: Guide Leads to a Sale
I mentioned Prime before, but it’s worth talking about it again, because it’s a key part of Amazon’s upsell strategy. An Amazon Prime membership gives you free two-day shipping, 30 minute access to member-only deals, access to 500,000 free books and more. Many products have the instantly recognizable Prime logo next to the price.
Amazon encourages their members to look out for the Prime logo when they shop, so that they can grab all of the goodies.
Isn’t that a great call-to-action?
Not only does it get the attention of Prime members, who KNOW they are getting a bargain, but it gets the attention of other shoppers who want the same deals. The upsell here is not just for the individual products, but for the Prime membership.
How can this persuasion tactic help increase your bottom line?
Here’s one example: release a limited number of copies of your product to your email subscribers first, at a reduced cost. That builds trust, which can lead people to buy right away. After your list has had the chance, release the product to a wider audience later. Those who got it early will feel good about it and others will want to sign up, in case you offer another deal in the future.
Lesson #15: Create a Sense of Urgency
The final piece of the puzzle for persuading the right people to act on your marketing message is ‘urgency.’
When Urban Science used urgency in their message, those leads got priority from their core audience. Behavioral economics shows us that we all want to be first when we can; a natural human instinct.
In most people’s mind, if a particular product/item is available only for a limited time, it automatically increases its exclusivity and value. That’s why specifying a limited availability window for your product or deal is an awesome persuasion strategy.
Amazon uses urgency to prompt online shoppers to take action. You can get the item you want the next day, but only if you act quickly. The online retail giant combines this with scarcity (only 3 left in stock) to subtly persuade shoppers to click.
If you want to use this strategy effectively, check out these four tips from Level Eleven.
Amazon uses the 15 persuasion techniques described above because they work. It’s been so effective for Amazon that it helped them achieve global net sales of $74.45 billion. That’s not too shabby, if you ask me.
And, it’s not just Amazon who is using the above techniques. It’s developed into a whole new sales industry of behavioral economics.
Thousands of other businesses are profiting from them as well. So, the question that comes to mind is: why aren’t you?
Are you ready to use persuasion techniques in your marketing?