Upselling is the best way to maximize post-sale ROI

It costs 6-7x times more to attract a new customer than retain a current one, and existing customers are far more likely to spend more with your brand. Subscription businesses have a unique opportunity to continually engage paying subscribers with upgrades, add-ons, and customized experiences. Businesses and subscribers can squeeze the most out of their relationship with upsell opportunities.

What is upselling, and why should I care?

Upselling is where a subscription business sells upgraded versions of their subscription. These are your “Upgrade for no ads,” “Get more storage for less,” “Platinum subscribers get no fees” and “Pay extra for 24/7 access.” The goal is to provide a comprehensive experience and expand your reach to new subscribers. Upselling can also decrease churn rate, increase LTV, and give subscribers a better product.

Upselling is extremely effective and now commonplace. After you’ve earned their trust, subscribers are likely to buy an upsell. It’s also a powerful addition to a subscription business because, instead of a onetime upsell, your subscriber’s recurring revenue is worth more. In subscribing for a higher level, they get billed more every pay cycle.

In the subscription economy, we care about customer acquisition costs (CAC), customer lifetime value (LTV) and churn rate. Upselling helps increase how much your customer spends and for how long—upsells provide a tailored experience with greater perceived value, why wouldn’t you subscribe for longer. A happier customer increases word-of-mouth marketing, which decreases average CAC and subscription marketing costs.

Top tips for effective upselling

• Show clear value: Your subscriber needs to see a benefit. Make the upgrade boost effectiveness of your existing service, add customized features or offer more for less. Keep in mind, people don’t always see value in more for a cheaper price. Value can also be in solving problems and personalizing a service
• Automate upgrades: Make upsell opportunities as quick and easy as possible. Include an ‘upgrade now’ button built into every customer portal. Create content around premium features and uses. And offer upgrade opportunities at check out and when reupping subscription. Try to make it impossible to miss the upsell
• Listen to your customer: The beauty of subscription businesses is the ability for creating a tight relationship with customers. User data, product usage, social engagement, and indirect/direct feedback are all great for understanding the customer. Leverage that information and find user gaps. Then use your product gaps to offer targeted upsells
• Build out your customer journey: Understand your customer, know how they shop and care about their interests. This lets you map how your brand will elevate its subscriber’s life journey. Use the customer journey to a customer’s perceived value and upsell it

Popular upsell strategies

• Unbundle: Look at your current subscription offering. Break it down into its core components and find the features that can be stripped out. Unbundling provides you with an easy solution for selling a cheaper introductory service
• Add-ons: Offer one-time offers to increase engagement. Update offers often and create a reason for frequent visits. This gives subscribers a way to better personalize their subscription
• Swaps: Let subscribers choose between options. This is a great way to offer personalization and increase engagement. It also opens the opportunity for affiliate deals
• Upgrades: Pay more and get significantly more is the most common way to upsell. This is a simple and effective upselling method for SaaS and replenishment type services. Something like, let’s say, a beer of the month: subscribe for a 6-pack every month, or upgrade for a second 6-pack at 25% off the second
• Freemium: Offering a service for free is an incredible subscription marketing tool. 20% of freemium users convert and upgrade. There is no better way to get someone using your product than handing it over for free. And letting subscribers use the product is the best way to show how it solves their problems
• Design for discovery: Provide a low barrier of entry, be that ease or use or affordability. As they engage with the product and service, upsell the stuff that compliments the product to further engage your customer

Upselling examples that we love

Look at any successful subscription business and you’ll notice upsells. It’s the kind of thing that’s ingrained into our brains; we expect it. Of the many subscription success stories, here are a few favorites that do a superior job at driving more revenue:

• Harry's: This is a razor subscription business. Every month they ship a new cartridge to your door. Super quick, super simple, and super convenient. Harry’s takes advantage of the trust they’ve built with the subscriber and offers an upsell at check out. The buyer can also get a shaving cream each month, or double the amount for the family option. As you shop, every page promotes their premium membership. This gets you a fancy customized handle, new products, exclusive items, and faster shipping. They really hammer on the idea of superior flexibility of you subscription. Instead of base customers getting a lesser product, the upsells are focused on providing value through providing the essentials for a shave, a more premium shave, or a superior package for the Harry’s junkie

• Trello: This is a freemium project management software. It gives users enough free features and space to really explore what the service has to offer. You will eventually need more space, access to more boards, and the ability to add more users. After upgrading from the freemium, your business pays each month per user. Since the user already knows the software and has integrated it into their workflow, an upgrade is viewed as the price of doing business. Instead of calling in for a quote on enterprise level sales, they also have a calculator to work it all out for you. Just a nice little feature to cut out the middleman and expedite the subscription

• Moleskine Studio: Moleskine makes nice journals that are popular with creatives and managers. Over the last few years, Moleskine has released a subscription service, similar to Adobe Creative Cloud, for a suit of productivity, planning, and art apps. They start by giving read-only access to the app. The user sets up an account and gets to browse around. This shows off the beautiful user experience and design features that Moleskine is known for. On every page the app opens a landing page for the free trial. The free trial gives unlimited access to all apps. After the trial is over, you are subscribed. You can subscribe to one app or all of them, but the pricing scheme makes it a no-brainer to subscribe to entire fleet of apps. The yearlong subscription makes it an awesome opportunity to massively increase LTV

Interested in learning more about the subscription economy?
You’ve come to the right place. This is our bread and butter.
Subscribe to our monthly newsletter and we’ll keep you posted.