This post was authored by Krista Walsh for our friends at CartHook, the leading way to add real one-click post-purchase offers to your Shopify checkout.
If you owned a brick-and-mortar store in January 2020, chances are you experienced a rapid slowdown in sales as the year progressed.
That’s because brick-and-mortar stores shouldered the brunt of the COVID-19 shutdowns, with a massive 75% decline in “non essential” retail sales in 2020’s second quarter.
But as many new online store owners are finding, achieving success isn’t as simple as launching a website and waiting for your in-person customers to become online customers.
The problem with ecommerce websites
The biggest roadblock to success for many store owners is surprisingly low average conversion rates: just 2%.
In-person shoppers face more hurdles to switching stores for a product because they have to physically go to a new location. But online, perusing a new store can be done with a click, which can drag down conversion rates.
Here’s why this is important.
The industry-wide average order value (AOV) is $45. If 100 people visited your website, you would likely earn a total of $90…. minus your marketing and overhead costs. For stores with low marketing budgets, getting the level of traffic you need to make a sustainable profit is a constant struggle.
That’s why, instead of focusing on driving traffic, new store owners will find faster success by improving the AOV of their existing customers. Optimizing your store to maximize AOV will instantly boost your bottom line, and you won’t have to increase your marketing spend to do so.
"Instead of focusing on driving traffic, new store owners will find faster success by improving the AOV of their existing customers."
One simple way to instantly increase your AOV is to implement upsells and crossells.
What are post-purchase upsells and cross-sells?
Upsells and cross-sells mean offering your customer a product they’ll love after they make their purchase. When they accept your post-purchase offer, they increase the total value of their cart.
With an upsell, the customer adds something to their original order. It can be a more expensive (premium) version of what they just bought, a bigger volume version of a product they already have in their cart, or even a smaller version (think something travel-sized) of what they just purchased.
A cross-sell is nearly the same, only the customer adds an additional product to their cart (often a complimentary product).
For the sake of simplicity, we’ll refer to both upsells and cross-sells as “upsells” because the strategy and results are nearly the same.
Usually when a store offers an upsell, they do it in one of two ways:
- Pre-purchase at the point of sale (POS)
- After the original purchase, in an email a few hours later
Both of these upsell strategies can be effective. For example, Yoga Accessories sends a follow-up upsell email after purchases.
One-click post-purchase upsells
One-click post-purchase upsells are a different upsell strategy because the customer sees them after they make the purchase, but before the customer has exited the store--in between the checkout and thank-you pages.
This type of upsell appears as a new page that pops up immediately after the customer’s original purchase is completed. The customer can accept the upsell offer without having to re-enter their payment or shipping details; they accept with just one click.
What are the benefits of post-purchase upsells?
Upsells are beneficial for any ecommerce store, but they can be particularly transformative for new or growing online stores. Post-purchase offers are a great way to quickly boost your AOV without investing too much time or money into the outcome.
Here’s how upsells can power-up your revenue.
Boost AOV to offset customer churn
Increasing AOV is vital for your bottom line, but something many store owners might not realize is just how much a high AOV can offset customer churn.
In nearly every industry, customer churn is never completely avoidable. There will always be customers that try your product once and then vanish.
Yes, you can try to combat this problem directly, but at the same time, it’s wise to begin counterbalancing those losses by increasing how much each customer spends on average (whether they’re a new or returning customer).
For example, let’s look at the story of 310 Nutrition, a company in the competitive health supplement industry with a brick-and-mortar and e-commerce location.
310 Nutrition was able to use upsells to make inevitable customer churn less of a burden on their profits. Right away, 30% of their customers took the upsell, which boosted their AOV by 25%.
This extra revenue was so significant, they were able to expand!
Improve customer retention by introducing customers to more products
Another bonus result of upsells is that customers not only spend more on their current purchase, but they are also more likely to return to shop again.
Because buying more than one product makes them more likely to find a product they love. For inspiration, look to how Kettle & Fire, a bone broth brand, used upsells to encourage more customers to buy more than one flavor.
"Upsells not only get customers to spend more on their current purchase, but customers are also more likely to return to shop again."
They found that customers who bought more than one flavor of bone broth were more likely to become repeat customers. As a result, Kettle & Fire’ experienced a 140% increase in checkout conversion and a 41% increase in average revenue per customer.
Scale your business faster with higher return on ad spend (ROAS)
Implementing upsells can have an exponential-growth effect on your entire company. Just consider what happened for BombTech Golf, a golfing gear company.
Upsells increased their website conversion rates by 45%, reduced their abandoned cart rate by 10%, and improved their AOV by more than $60.
With these incredible improvements in the performance of their online store, they were able to increase their ad spend, knowing that every dollar spent on ads would return significantly more.
As they scaled their ad spend, they scaled their website traffic. In turn, this scaled their revenue and ultimately, their company.
Best practices for post-purchase upsells
Upsells are easy to implement, but there are some best practices to keep in mind to ensure that as many customers as possible take the upsell.
Instill urgency in the upsell offer
Urgency drives conversions. In fact, CXL found that by introducing urgency to a Bob & Lush product page, they increased conversion rates by 9.1% and the overall revenue of the page by 27.1%!
In your upsell offer, introduce the idea that this offer is only valid as part of the upsell. In other words, make it clear that customers can’t retrieve this offer separately later.
Using words like “One Time Offer” or “Today Only” help to convey this urgency quickly. Or add a countdown timer to your post-purchase offer page, so the customer sees the time limit as they consider the offer.
Make the post-purchase offer highly relevant
To make it more likely a customer will say yes, you can customize your upsell offers to include something that is highly relevant to what the customer just purchased or even the total cart value of what they just bought.
You can choose to offer a complimentary item, as Native Deodorant does (a travel-sized toothpaste with purchase of a regular-sized toothpaste).
Or, you could even offer a special deal on adding another of the same product the customer has just purchased, as Physician’s Choice does.
Offer one-click post-purchase upsells
Remember, one-click post-purchase upsells occur between the checkout and thank-you page, and here’s why this type of offer performs well.
Unlike point-of-sale upsells, one-click post-purchase upsells come with zero pressure for the customer to add to the total of their cart. POS upsells may jeopardize the original purchase by creating decision overwhelm or a pushy sales atmosphere for the customer.
"Unlike point-of-sale upsells, one-click post-purchase upsells come with zero pressure for the customer to add to the total of their cart."
And unlike post-purchase upsells that occur via email, one-click upsells require far less action to complete. With an upsell via email, a customer must open the email, click a link, go back to the store, re-enter their payment details, and complete the purchase again. With one-click post-purchase upsells, customers simply click. And that’s it!
In short, one-click post-purchase upsells are the most effective option because…
- Customers accept the offer with just one click
- They see the offer during the euphoric, post-purchase period
- The offer feels urgent
For example, check out the one-click post-purchase upsell landing page that increased Kettle & Fire’s average revenue per customer by 41%.
How to implement post-purchase upsells on your Shopify website
Getting started with post-purchase upsells is simple in Shopify. Here’s how:
- Go to the Shopify App Store and visit the post-purchase upsells category
- Install one of the apps to your Shopify store
- Customize your post-purchase offers for your customers
- Measure results to see new revenue and the boost to your AOV
Boost your revenue and AOV with post-purchase upsells on Shopify
Post-purchase upsells are a simple, highly effective strategy for improving profits for your online store, especially for brick-and-mortar stores looking to expand into the ecommerce world.
These types of offers can instantly improve your AOV without requiring more marketing or advertising spending. This can also help offset customer churn costs, increase your ROAS, and reduce acquisition costs.
As a bonus, upsells introduce more of your customers to more of your products, which will help build your relationship with your customers for the long term.