“Would you like fries with that?”
The upsell offer isn’t new. McDonalds didn’t invent the concept, but they’ve sure popularized the usage of upsell offers.
Before I explain why they work so well and how to use them, let’s make sure that we’re on the same page…
What is an Upsell Offer?
Dictionary.com describes an “upsell” as a verb, meaning “to try to persuade a customer to buy a more expensive item or to buy a related additional product at a discount.”
The Miriam-Webster dictionary says, “no such word or phrase exists.”
And, the ever-popular Wikipedia says that “Upselling (sometimes ‘up-selling’) is a sales technique whereby a saleperson induces the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale.”
It sounds absolutely horrid, doesn’t it?
Why on earth would we reasonable or rationally agree to such a thing, even when we know it’s coming? … “want fries with that?”
Simply put, an upsell (or up-sell) is an offer that is made by a sales person (or website) to add to an order for which we’ve already paid or agreed to pay.
As horrible and manipulative as this sounds, it works … and for some very good psychological reasons.
Why Upsell Offers Work
It has to do with what social scientists call the “pain of paying.”
We experience a certain degree of pain when giving up our hard-earned cash, whether it’s for something we desperately need, or something we’d merely like to have.
Let’s say, for example, that paying for a fancy-dancy, hands-free online product that will make you a millionaire in one year costs you $100.
Let’s give this a score of 30 on the “pain of paying” scale.
Now, this same reputable online company offers an upgrade to the system that they say is worth two million dollars, but it will only cost you an additional $300.
You’re being asked to pay three times more for the upgrade than you did for the initial product.
However, the “pain of paying” for this upgrade is only 20 … less than the original pain score!
They refer to this as the “diminishing sensitivity” of the payment. Said another way, if you were already going to pay for your meal (at a cost of $50), then on a psychological level, paying for your guest (another $50) isn’t as painful for you as the first $50.
So, if you’re already buying one book, what’s wrong with a second or third book?
If you’re already shelling out $23,500 for the new car, the extra $1500 for seat warmers isn’t any big deal. Smart retailers (online and offline) use this tactic to get you to buy way more than you would if it were all bundled together.
Case in point: I remember refusing to buy a car because it came with features I didn’t think I wanted or needed. Yet, when I did buy a car, I ended up adding many of those features to my order because the “cost” wasn’t as painful. The “pain of paying” diminished with each add-on.
How it Works Online …
You’ll see three main variations of the upsell offer online:
1. You agree to buy the product, but before you check out, they offer you additional features or options that will simply be added to your total.
Example: “Yes, our super widget will clean your home in five minutes… but imagine an attachment that will also do your laundry for you! Simply click the button below to add this to your order… (or click here to say NO to this one-time offer).”
2. You agree to buy the product, go to the shopping cart to check out, and they have mysteriously added an option that’s already checked and will cost you almost double what you thought you’d pay for the original product.
Example: You order the “Download Version” of a software product. When you go to the shopping cart, you’ll see a second line item automatically added (and checked) to “Ship the CD version” to your home.
3. You agree to buy the product, pay for it through the online shopping cart, and then arrive at a warm and friendly “Thank You” page that offers you an upgrade or option. Plus, all you have to do is click “OK” because they already have all your credit card information. They’ll just add it to your order for you.
Example: “Your new super widget is on its way! Soon, you’ll have more free time to play, as the super widget does your housework for you. We’d like to give you this one-time chance to have even more time on the beach. Just say “yes” and we’ll also send you our super widget laundry attachment for only $999.”
Which of these scenarios do you think will work the best?
If you guessed number three, then you’re right!
All three scenarios work. All three will result in increased revenue for the online retailer because some percentage of their customers will always buy the upsell.
But, because the pain of buying diminishes with each add-on, and diminishes by an even greater amount when the first chunk of change has already passed hands, the third scenario (often called “One Click Upsell”) will almost always result in the most upsell sales.
[Note: I say "almost" because, of course, each sale depends on the perceived value of the product being sold, and the quality of the sales person or copy.]
The point: the next time you’re getting ready to sell anything online, consider which products or services go along nicely with the main product or service you’re selling.
Hey, if it works for Amazon, don’t you think it should work for you?
Would you like to implement an effective upsell process for your products or services? Let me know. I’d be happy to help you make it happen.
Sid Smith
