Definition of e-commerce upselling
E-commerce upselling is about offering web store customers a better or additional item when they browse your online catalog, add a product to their shopping cart, or check out.
What are the benefits of e-commerce upselling?
There are many benefits of e-commerce upselling. These benefits include:
- It increases your customer lifetime value (CLV). CLV is the estimated revenue that a customer will bring in throughout the time that they purchase from your business. To determine a customer’s CLV, you first calculate the average purchase value of a customer and then multiply it by the average number of purchases (frequency of their purchases). This will determine your customer’s value. Once you have calculated the value of a customer, you need to determine the average time a customer buys from you (this is called customer lifespan). After that, you can multiply the value of your customer by the customer lifespan to get your CLV.
- It’s easier to upsell to your existing customers than to attract new customers. Acquiring new customers is costly and time-consuming. It is less costly to upsell to your existing customer database. And e-commerce upselling is the perfect way to do so.
- By offering customers the right product that is of interest to them, you build a stronger relationship with them.
- E-commerce upselling keeps customers coming back. Amazon is one of the best e-commerce platforms to successfully implement e-commerce upselling persuasion techniques. Amazon attributes 35% of its revenue to upselling and cross-selling.
