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Unprepared Ep 56 - Why Should You Upsell and Cross-Sell Your Products and Services with Kelly Vaughn

Timestamp

  • [00:00] - Sponsor: Rewind
  • [00:40] - Intro
  • [01:06] - Importance of upsells and cross-sells
  • [01:38] - What if I only have one product to sell?
  • [02:33] - Post-purchase upsells part 1
  • [03:08] - Increase your average order value
  • [05:35] - Upsells vs cross-sells
  • [07:51] - Post-purchase upsells part 2
  • [10:24] - Avoid different logins in Shopify
  • [11:01] - Where to find Kelly

Resources

Key Points

  • If you’re pushing one product to your customers, you’re not really finding opportunities to grow.
  • Learning to upsell and cross-sell will dramatically increase your customer lifetime value.
  • Up-selling gets customers to spend more by purchasing an upgraded or premium version of what you’re offering.
  • Cross-selling gets customers to spend a related product to compliment so they can enjoy more benefits with your current offer.
  • Don’t just push one product. You have to educate them if you want to actually get them.
  • Average Order Value (AOV) tracks the average amount a customer spends every time they place an order. 
  • If you can raise your average order value on that first product sale, as you've just increased your margin. Then you increase your return, which is what everyone cares.

Transcript

Sponsor: Rewind

Unprepared isn't scripted or edited, there are no redos, and when we screw up, it's going live. This works for our show, but it is no way to run your Ecommerce business. 

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Chase Clymer

Hey, everybody, welcome back to another episode of Unprepared. This is the most unprepared episode of Unprepared. Welcome to the show my lovely friend, Kelly from the Taproom. How are you doing?

Kelly Vaughn

I'm doing great, how are you?

Chase Clymer

I'm doing fantastic. So we jumped on the call and we said, well, first of all, her event invite had just nonsensical stuff in it. So we didn't have anything prepared. 

But we came up with the idea of talking about upsells and cross-sells. Let's talk about down sells post-purchase and we just get into that. But most importantly, it's I guess, why is this important if I'm a store owner?

Kelly Vaughn

Yeah, I mean, you want to be increasing your average order value. You want to be increasing your customer lifetime value. And if you're just pushing one product to them and be, “Okay, cool, have fun, go buy to buy this and then go do something else.” You're not really going to be finding opportunities to grow.”

If your customers are only aware of one single product in your store, and they don't know that you have other awesome really great complimentary products or upgrade options available. I mean, you have to educate them if you want them to actually buy them.

Chase Clymer

But Kelly, I only have one product, this lead flagship product, this widget number one widget what it does, that's all I have. So how can I do this?

Kelly Vaughn

You need to find additional things to sell.

Chase Clymer

I could also probably do some unit bundling. That's another great way to do it.

Kelly Vaughn

Well. Yes. If you buy more widgets makes sense. If it's a one-time use product, or it's going to last you for three years and never breaks then you got to sell something else.

Chase Clymer 

I've also seen someone do it really, really well. It was a very expensive fitness equipment thing.

Kelly Vaughn

Is it called a Peloton?

Chase Clymer

No, it was a couple of 100 bucks. Well, if they did this, it'd be hilarious. It'd be the best gift ever. But it was buying one for a friend for 50% off. And I was like, whoa. I was like that's a great upsell there. Because you know they were losing their butts on shipping already. 

Because it was free shipping. And I was like Dad, this probably makes sense. When you're thinking about you're still paying the freight current cost adding another one to it to give it away. Like you're still net positive at that point.

Kelly Vaughn

Absolutely. Yeah, that's a great idea. And that usually takes place post-purchase after they have already committed to buying one. Really handy to use, like one of those post-purchase upsell apps, like one-click upsell or zip tie or one of the other ones that do it. I forget.

Chase Clymer 

I've been following one lately post-purchase promotions. 

Kelly Vaughn  

Oh, yeah. 

Chase Clymer

He built that during the Shopify app contest, or whatever they did. They did a few months back?

Kelly Vaughn

I got honorable mention, and then never released my app.

Chase Clymer 

You're insane. You need to just put that out there.

Kelly Vaughn

It's trashed. It's gone. 

Chase Clymer

Now. It's in the recycle bin? 

Kelly Vaughn

It is in the recycle bin. I archived it.

Chase Clymer

Gotcha. Okay, so back to back to why do I want to increase my AOV. It's one of three KPIs that matter in Ecommerce’s math. So you've got your conversion rate, your traffic, and your average order value. And anytime you can increase your average order value, it's going to increase how much money you make a month without you doing anything else. 

So if your traffic stays the same, your conversion rate stays the exact same, you can bring your average order value up, you've just invented money out of thin air.

Kelly Vaughn

It's also important to note that it is more expensive to acquire a new customer than it is to upsell to an existing customer.

Chase Clymer

Absolutely. And that's it goes into my favorite topic, which is I hate anyone that is pumping all of their money into Facebook ads for growth. Because now you're really risking your margin and you're really risking how fast you can grow. And if you can sell more products to the same customer that you've acquired. That's better. 

If you can raise your average order value on that first product sale, as you've just increased your margin, you increase your return, which is what everyone cares about with Facebook ads. So if you're talking about, I actually had I talked to a guy on Monday or Tuesday, and he was like, we need help with Facebook ads. 

But what he said that I really loved was he was, “I understand that Facebook advertising and your conversion rate doesn't exist in a bubble. And there's a lot more to it.” And I was like, awesome.

Kelly Vaughn

Can there be more of you?

Chase Clymer

I was like, you just saved me like 10 minutes of explaining that, like your goal requires all this other stuff involved.

Kelly Vaughn

That's great. Yeah. Honestly, when it comes to Facebook ads, I don't know anything. I attempted to run Facebook ads for my own store. And I'm going through the process of selling it now actually. 

I calculated out what my margin is with and without spending money on Facebook ads, and I dropped my margin by like 10% or I dropped it a full 10% down, I should say.

Chase Clymer

Yeah, they are. They're pretty. And then especially today, two days ago, they released the update that goes in line with iOS. So it's just like insanity. If you aren't seasoned that you like, you have to do some tricky stuff to see if what you're doing is working right now. And that has been...

Kelly Vaughn

This is why you should hire an agency like Electric Eye, I have to help you out with this.

Chase Clymer

Ryan has been on top of it. He's been running all that stuff and just telling us in the clients to be calm, you know what I mean? As like the figurehead here. I'm just like, we know what we're doing. Right? And he's like, “Yeah, it's fine.”

Kelly Vaughn

Good. He's telling people we're not, we know what we're doing. Exactly. But no, we should get back to the topic of cross-sells versus upsells. Because a lot of people get this wrong. So there is a difference between a cross-sell and upsell. And most likely, you're seeing cross-sells, you're not usually seeing upsells. So let me just provide an example of which ones.

Upsell. Let's say I'm buying a pound of coffee, and I add that pound of coffee to my cart. And you're like, “Kelly, we know you're gonna go through this coffee really fast. Why don't you buy five pounds of coffee?” And then I say, “Oh, okay, cool.” And then it removes the one pound of coffee out of my car and then adds the five-pound coffee back. 

So you have just up-sold me to a more expensive item. Now cross-sells are like, “Hey, you added this one pot of coffee to the cart. Why don't you add creamer? You don't use creamer? Why don't you add up this new mug? Because obviously, you need branded mugs.”

So let's upsell you with or let's cross-sell you this mug so you increase your average order value, and it doesn't actually change the fact that you're buying coffee. But now you're getting something else as well.

Chase Clymer

Absolutely. And those are, people, I think oftentimes get scared when they have a larger product catalog especially like say in like fashion or any sort of like accessories ecosystem. 

They get they're like, “well, I've got you to know, 100 different things. And it is so hard to recommend this, that, needs.” 

Stop, just pick your five most popular products. And just logically think about it after that.

Kelly Vaughn

There are also reports for this like even within Shopify, people who buy this product also tend to add these products to their cart as well. So you can get this information available to you already. The other thing you can do is that especially for apparel or selling accessories, the shop the look kind of situation. 

So if I add this shirt, or you see, this model is wearing this shirt, these pants, and these earrings, you can upsell or you can add as a potential cross-sell item to the cart or to the product page itself to buy that entire look.

Chase Clymer

Yeah, let's be real. I don't know how to dress. I'm a sucker for all that stuff. I say add it all.

Kelly Vaughn

I've been wearing the same. Yeah, I've been wearing the same Viorel joggers since March last year. So I'm full-in on athleisure. Just dress me, please.

Chase Clymer 

Absolutely. And then before we go here, I do want to bring up post-purchase upsells because they're insanely cool. So we're recording this in January 2021.

Shopify opened up the most secure element of their brand, finally to developers, so you can act now developers have access to checkout. So they can put apps and checkout. And the reason that this is super important, is any app previously actually was cloning the checkout experience. 

If you weren't in the No, so it actually wasn't Shopify. So anytime you're doing like a post-purchase Checkout, or like upsell, or subscriptions, it was actually a secondary checkout. But now everything's gonna be in Shopify, so everything will play nice. 

But the power of offering something to someone after that they've given you the credit card. It’s insane.

Kelly Vaughn

It's so it's so great. And it's so easy to be like literally one click, “Oh, yes, I do need these. I do need this mug.” I didn't realize I needed it. And now you can actually switch it out. And Shopify allows order editing up to 60 days after an order has been placed. So it's not like it has to either be immediate as well. 

You can literally follow up via email with, “Hey, we know you purchased this now, five days ago, maybe it has a longer lead time”. So if things don't ship immediately, you can use that lead time as an opportunity to sell more to them and get that average order value up. 

Chase Clymer 

Yeah, here's a perfect example. They buy you know, let's go back to the idea of buying, you know, lifestyle equipment like working out stuff. Yeah, I'm really good at that because I don't know what they're called.

Kelly Vaughn

Let's use the example of a Peloton because it's literally a six week eight week 10 week lead time.

Chase Clymer

Yeah, okay, so you buy a Peloton and then you get an email when your Peloton finally shows up. And they're like, “You know what, you probably should have bought this very specific accessory.”

Kelly Vaughn

It’s the shoes that you have to use for there's unless you switch out the pedals. Yeah, there you go.

Chase Clymer

So if you didn't buy the shoes, it's like now you want the shoes right? And then it's you know, they just sold you post-purchase, which is technically not increasing the average order value that's technically increasing the lifetime value.

Kelly Vaughn

It edits the same order, though, is what I'm saying. Yeah.

Chase Clymer

Yeah. Is Peloton Shopify?

Kelly Vaughn 

Yeah, their Shopify, their apparel store is. But Peloton itself is not.

Chase Clymer

That's a weird user experience. Well, I don't know why I wouldn't be the same. 

Kelly Vaughn

You know what I can go on to a whole 10-minute talk about why Peloton is not capitalizing on their cult following and expanding their apparel offering and really pushing it because they wear their own Peloton, apparel, all the work all the instructors are wearing their own Peloton apparel that should be pushed more and it's not

Chase Clymer

well, it's also like why is so I have to log into the thing and why not sell me t-shirts while I'm there? Like it should be the same login for both.

Kelly Vaughn

One would think. I mean, technically you could.

Chase Clymer

Having two different logins is like the number one No, no, ever. 

Kelly Vaughn

Yeah. 

Chase Clymer

I preach about this so much when I'm talking to people that are more content-driven or like the B2B side of their business. And then it's like, oh, and then there's this random store that actually is doing well. It's like, Okay, well, it's such a jolting user experience. If there are two logins that keep track of.

Kelly Vaughn 

If you're on Shopify plus this means you need to be using multipass.

Chase Clymer

Exactly. Awesome. Well, I think that the conversation went off the rails, which I knew was gonna happen, but me and Kelly will do this quite often, so don't worry. We'll have her back in a couple of weeks to chat about stuff. 

Kelly, what are you up to? Where do you want to direct people if they are picking up what you put down?

Kelly Vaughn 

Yeah, so you can find the chat room at tap room.com You can find me on Twitter at @kvlly You can find all you don't really need to find a topper on Twitter. You can find it on top of the agency, but it's usually me tweeting so follow me instead.

Chase Clymer

Kelly is a hilarious one on Twitter, so I recommend pressing that follow button. Thanks for coming on. 

Kelly Vaughn 

Thanks.