This is the fourth in our 10-part Beyond the Product subscription series. In our next chapter, we’ll discuss subscriber churn and retention with Patrick Campbell, CEO of Profitwell.
When looking to boost revenue to the subscription offering, brands can’t just rely on adding more customers to the membership list. To fully realize the potential of driving a subscription offering, upgrading what members currently purchase can be a valuable strategy towards ecommerce success.
Upselling and cross-selling are the two most common approaches to upgrading customers, for any business. In this timely and insightful chapter of our Beyond the Subscription series, you’ll learn the crucial lessons in mastering these techniques. We included advice from various specialists in the ecommerce space, particularly from Chris George, co-founder and chairman of the Subscription Trade Association.
From identifying which products to promote at checkout to leveraging strategic language to timing upgrade offers to seasonal months, a range of solutions can lead to higher average order value (AOV) and tighter relationships with your existing customers.
First, let’s look at how cross-selling can level up what customers buy from you.
Sell expertise, seek seasonal hooks
In the food and beverage space, it’s easiest to sell across the menu to encourage more purchases: A customer orders a single cheeseburger, and the employee suggests several more items to complement the meal, such as fries and a beverage.
Beyond the food and beverage space, to cross-sell effectively, subscription brands want to offer customers the opportunity to add another item to their cart before they pay for their subscription.
That could mean anything from a bonus product to an additional service, but do it right at checkout, stresses Chris George. That sector on the shopping journey is commonly associated with opportunities to upgrade the cart, he adds.
“Don’t use a pop-up, though,” he says, “because we didn’t see a high take rate with that design feature with average conversion sitting around 3%. Instead, right at checkout when a customer enters credit card information, allow them to add to the cart something in your inventory, and what has worked well for some brands is displaying a little square with a red arrow pointing to this mystery box. Those have seen an average take rate of 45%.”
The tip makes sense: We often cross-sell to ourselves at checkouts in bricks-and-mortar stores, deciding on a lighter or a pack of gum or a magazine handily available right by the cashier.
Subscription brands are obligated to nudge shoppers towards cross-selling options, but it doesn’t have to be solely product-based, George notes.
Selling knowledge and expertise can be a sticky way to entice customers to increase their average order, while also strengthening the relationship between shopper and brand. George cites the example of a cocktail-mix subscription service selling at checkout the option to access live streamed lessons from a skilled bartender. That way, subscribers realize the value of the cross-sell, instead of viewing it as a careless cash grab.
To cross-sell efficiently, George also recommends brands consider timing offers to seasonal holidays. “Look at Valentine’s Day and how a mens-products brand can use that holiday to tell subscribers they are offering gifts for women that week, a ‘Let us do the Valentines shopping for you’ promotion.”
Another offer could circulate close to Christmas, where any subscription brand can cross-sell stocking stuffer items that could be added to a beauty kit, for example.
Upsell with top products, engaging copy, free trials
If you’re trying to upsell, which means asking customers to upgrade their subscription order, you need to make it clear what they get for the increase in monthly fees.
First, are they upgrading to receive better quality products, or items tailored to their needs? Remember that personalization is an important ingredient in creating sustainable subscription brands, so now would be an opportune time to take advantage of any member-submitted data that could engineer a customized promotion.
Second, is the upsell offer specifically explained fully and with feature explanations the shopper will understand? As a Bold Commerce post revealed last year, “Since upsells have limited real estate on sites, it’s important to be strategic with the language you chose. Include an attention-grabbing header that displays either how long the sale will last for, or language that explains that the sale is for a limited time.”
Third, free trials and freemium models can work as upgradeable tiers for some subscription brands. In the music space, Spotify employs a freemium model for subscribers who don’t want to pay for the service, but are instead served ads during their listening sessions. Upgrading to the premium model gets rid of those ads, costs a monthly fee, and can give the subscriber more features. The result? At least 60% of subscribers have come on board to Spotify by signing up first for a free subscription.
George cautions that not all subscription brands can adopt the freemium model, especially if the brand is predominantly working with physical product(s). Free trials tend to work better with subscription brands that offer access to something. An example of access could be Netflix or other streaming services. “You can’t just give away free stuff, so this approach will work best with brands selling access and exclusive content,” he adds.
Avoid option overload
You might think presenting shoppers with a buffet of choices at checkout could increase take rates for your upsell or cross-sell offers. But too many decisions for customers can result in analysis paralysis, causing anxiety of making the wrong choice,” according to some experts.
Spelling out options for a customer in a clear and concise way, while not providing too many options is the best way to showcase the value the upsell will bring them, the post goes on to say, and then cites the example of Decorated, a seasonal home decor subscription box brand. They provide two simple choices for their customers and also outline the value of the higher plan. They include short checklists showcasing what their annual members receive above and beyond their quarterly members.
Other brand examples of successful upgrading strategies include FabFitFun, George says, a lifestyle subscription box brand, and at checkout they create a sense of urgency by noting how this additional product is only available for 24 hours. “That urgency can be a powerful driver for conversions,” adds George.
Beyond optimal timing and creative selection, the final piece of advice to implementing effective upgrading approaches comes down to understanding the customer. HubSpot’s blog succinctly sums it up: “If you can keep a pulse on how your customer is feeling, have an idea of the features or products they stand to gain the most from, and know when they’ll be most receptive to an additional offer, you’ll be able to upsell and cross-sell with the best of them.”
Stay tuned for chapter five, where we’ll discuss how to minimize churn, increase retention, and foster lifetime customer loyalty.