Imagine spending weeks perfecting your store and running marketing ads or campaigns. Finally, a customer buys just one item and checks out. It feels like a win, but you’re leaving money on the table. Since the average conversion rate is only 2%, so you must make the most of every sale to increase your revenue.
How can this be fixed?
Post purchase upsells can fix this. Increasing each sale’s average order value (AOV) is as important as getting new clients to buy from your online store.
This blog post will explain how post purchase upsells boost revenue and AOV and why they are vital to the win of your ecommerce businesses.
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Curious about AOV? Let’s break it down and boost your profits!
Redefining Average Order Value (AOV)
Average Order Value calculates the average amount shoppers spend during a single order punching.
AOV is a variable that changes over time. Monitoring it enables you to examine consumer purchasing trends and return on investment ROI for advertising expenditures. It also allows you to take critical actions to increase your profit margins.
The formula is written below to calculate your business’s AOV.
AOV= Total Revenue /No. Of orders
For example, assume your Shopify store generated $30,000 last month and received 500 orders. $30,000 divided by 500 = $60, so your last month’s AOV was $60.
What is Upselling?
Upselling is a sales process that involves urging customers to buy an exclusive version of a product rather than the one they initially planned to purchase.
For example, in an e-commerce store, when a customer adds a basic t-shirt to their cart, you could suggest a premium version with higher-quality fabric. You can also recommend matching trousers or joggers to clients.
This approach encourages customers and increases your AOV. Why is upselling crucial?
Upselling isn’t just about selling more; it’s about maximizing every order, increasing your revenue, and giving customers more value. It’s the secret sauce behind higher profits and happier shoppers.
What is Post Purchase Upselling?
A post-purchase upsell is a marketing and sales tactic in which a business offers customers additional relevant products after customers make the initial purchase.
It is usually presented as an offer right after the checkout .It enables companies to recommend related products or special offers without lowering the user experience.
It can also be done by an automated email a few days after the purchase.
Post purchase upsells can significantly benefit businesses, increase repeat purchases, revenue streams, and customer lifetime value (CLV).
Case Study On How Post-Purchase Upsells Helped Leading Brands
A person logs into Amazon to buy a phone case. Just as he checks out, Amazon nudges him with a “Frequently Bought Together” suggestion such as screen protectors and a wireless charger.
That actually makes sense. I’ll need those!” he thinks. With a single click, he adds them to his cart.
This tiny nudge? It’s not random, it’s Amazon’s upselling magic at work. And it’s no coincidence that:
- 35% of Amazon’s total sales come from upsells and cross-sells.
- Customers often spend 10-30% more, thanks to smart product recommendations.
By simply showing relevant add-ons after checkout, Amazon turns one-time purchases into bigger ones. Without any extra marketing costs.
Why Post Purchase Upsell Matters For Your eCom Businesses?
Upsells keep customers engaged, helping you earn their lifetime value and trust. They’re a simple yet powerful way to grow your business while reducing expenditures.
Conversion Rate Optimization (CRO) stores leverage upselling strategies to boost conversions and enhance customer lifetime value (CLV).
Here are some benefits mentioned below.
- Increase customer retention
- Drive additional revenue
- Lowering Churn Rates
- Conversion Rates Improvement
- Increase customer retention
Offering additional items or services following a purchase helps build customer relationships, which improves customer retention and loyalty.
For example, Post-purchase upsells helped BRĒZ, an alcohol substitute brand, develop and improve customer retention and trust.
- Drive additional revenue
Upselling lets buyers spend more by adding additional items to their orders, increasing overall sales and ROI. This is mainly beneficial for customers acquired via paid channels.
For example, MoonBrew, a wellness brand, implemented post-purchase upsells and saw over $500,000 in additional revenue.
- Lowering Churn Rates
The churn rate is the percentage of customers who discontinue purchasing from your store after spending a certain amount. It is a crucial indicator for evaluating the general health of your company and customer retention.
However, post-purchase upsells help reduce churn rates by keeping customers engaged in their preferences and buying history.
For example, a bedding company named Hush experienced a nearly 10% acceptance rate on upsells, which helped them lower their churn rates.
- Conversion Rates Improvement
It is easier to sell products to your existing customers than to new clients. Once your customer accepts an upsell offer via AI call or email. Therefore, you will experience extensive growth. It is significant to uplift your AOV and revenue directly.
For example, BeeFriendly is an organic skincare line that started offering post-purchase upsells and increased its conversion rate optimization (CRO) by an extra $12.50-$20.00 per order.
5 Proven Strategies How Post Purchase Upsells Boost Revenue & ROI
Business owners use different marketing strategies to close more sales. Studies show giving your customers recommended products increases your AOV by 30%.
Here are 5 top-notch strategies to take your ecom store revenue to new heights.
- Email Upselling Campaign
Increasing your Average Order Value through a well-timed email after a customer completes an order is a good tactic. You can offer them upgrades, bundles, or complementary products tailored to their preferences because they’re currently in the buying mode. They are more likely to add more products because they have previously trusted you with their purchase.
Emails have a 3x higher conversion rate than traditional website upsells.
- Merge Your Upselling With Cross-selling
Merging upsell and cross-sell strategies is a robust way to grow revenue during online shopping. After the customer completes their purchase, show them an upsell or cross-sell item that perfectly complements their product. This simple technique can lead to a 20% increase in conversions.
- Offering Smart Discount
Give your clients a sensible discount that draws them to buy more. For example, show them they are only $10 away from getting qualified for a unique, time-sensitive 20% discount. This produces an alluring incentive that captivates them with you.
- Offer one-click post-purchase upsells
One-click post purchase upsells are an emphatic way to increase AOV. Instead of asking customers to add more items before payment, it suggests an upsell offer immediately after the purchase.
Moreover, it allows them to add complementary products with just one click without re-entering payment details.
- Call Commerce (E-Commerce Through AI Calls)
One of the best practices to increase your average order value is through Call Commerce (C-Com). Call Commerce is a technology that uses upselling through AI calls for ecom order confirmation.
Unlike traditional SMS or email based order verification, these generative AI calls are more effective and personalized.
Once a customer places an order, the AI system automatically triggers a call after some time. The AI engages with customers, offering complementary items, services or upsells that align with their preferences.
Want to learn more about Call Commerce?
Concluding Post Purchase Upsells Boosting Revenue
Understanding how post purchase upsells boost revenue is key for e-commerce success. By offering additional products after a sale and leveraging tools and strategies like Call Commerce and one-click upsells, respectively. You will connect with your customers and increase your ROI.
These tactics help grow your business by increasing your AOV.
Start using them today for lasting success!
