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Online Marketing Case Study: ‘Upsell’ Strategy Boosts Online Sales By 56.3%
The best time to sell online is when customers already have their credit cards out.
In this case study video I deconstruct a real upselling strategy, showing you how adding a simple upsell process increased sales by 56.3%!!
Enjoy….
Watch the video: Website Upselling Case Study on YouTube
A transcript of the video is here:
Hi, this is Will Swayne from Marketing Results which is at www.marketing-results.com.au.
I’ve got a really interesting case study video to share with you today. This case study video is on the power of upselling. In this video, you’ll learn how we increased order page conversion by 39.2% while also simultaneously increasing average transaction value by 12.3% for a net revenue gain of 56.3% by just changing one thing.
As I mentioned this video is on upselling and upselling is basically the “Would You Like Fries With That?” strategy.
The principles to underline this strategy are a couple of things:
- Firstly, when customers are buying, don’t stop selling.
- Secondly, one of the cardinal sins of marketing, I believe, is actually limiting the value that you offer clients. There may be clients among your customer base who would buy more elaborate products or larger products or bigger bundles or products with more features, if you offered them. The fact that you don’t offer them is the reason why they’re not buying them.
So let’s quickly talk about upselling. Well there are a few people in the internet marketing community who are talking about it but very few people who know how to do it. Even fewer can quantify the value of doing it and almost no one is actually doing it. So in this example, I’m going to show you an actual example where you’ll see how to do it and what the potential results can be.
The website you see in front of you is a website called candlemakerscompanion.com which sells primarily a $27.00 e-book on how to create beautiful artisan candles for fun or profit and as you can see from this website, it’s a traditional sort of sales letter style website. There’s a sales letter, there’s a guarantee and then it’s $27.00 and by clicking on this ‘add to cart button’ you then proceed to an order page.
We actually tested two order pages. The first order page in the test looks like this where it says, “Yes! I want my copy of The Candle Maker’s Companion. Get the Candle Maker’s Companion Plus $65 Worth of Bonuses for just $27.”
There’s a number of strategies in evidence there:
- One of them is this sort of affirmation strategy prior to purchase to make it very clear on the value that the client recieves
- Secondly is bonusing – to receive a lot more value than the sticker price.
- One is having an image of the product
- Another one is actually valuing the individual bonuses
- Reiterating the money back guarantee
- Having some privacy assurance messages, credit card and payment logos
- A checkout button or an add to cart, “click here to claim your copy now” buttons
But the key point that I want you to notice here is that there’s only one option which is what most people do. So we tested this original version against a different type of off page which you can see here.
So this page is very similar. It says: “Yes! I want my copy of The Candle Maker’s Companion.” There are two options for you to choose from. Please read below and make your selection. Below there—there are actually two boxes.
Here’s the first box which is identical to the first; adding it to the cart here. And here’s option two which is a bundle: “You can get the Candle Maker’s Companion plus the Handcrafter’s companion for just $17.00 more!” So again it’s adding a lot more value for a nominal increment in price. So it explains the connection between the two products. I’m not going to read it all but I’ll just read the first paragraph.
“The Handcrafter’s Companion is a complementary volume to The Candle Maker’s Companion. It provides you with everything you need to create fragrant bath and body products, for fun or profit!”
Further down, we say that: “The Handcrafter’s Companion is actually sold on its own website for $27.00” with a link so people can verify the value. Then again there’s an affirmation statement to get both products for a very reasonable price of $44.00 with all the bonuses then itemized again and then you go to the checkout.
I’ll show what the checkout looks like; it’s identical for each side of the test. So whether they order the upsell product or the planned product, it will go to this sort of shopping cart page.
Okay so let’s look at the results between these two types of order page.
This is a Google Website Pptimizer which is one of the conversion testing tools we use to help our clients and ourselves increase our conversion results. The blue line is the conversion rate on that original order page. As you can see, these lines change, I’ll talk about that in a second. The orange line is the conversion line right on the page with the upsell.
So you notice that these pages sort of change every time; that is as more data is collected, we get more certainty about the true value of the long-term conversion rate of either option. As we get to the end, we find that on this order page, the conversion rate is 31.6% with the upsell and 22.7% with no upsell, in other words, just offering one option. So that means that of every one hundred people that come to this page and see the upsell; 31 purchase. Of every hundred people that come to the page and they don’t see the upsell, only 23 purchase.
So what does that mean?
That means that with a very high level of confidence, statistically speaking (which is all this stuff is about) there’s an actual conversion improvement of 39.2% by offering the upsell option; simply by offering the upsell option. And there’s also an increase in the transaction value because the upsell is obviously more expensive than the regular product. We actually find that about 19% of orderers choose the upsell and 81% choose the regular product. So that has an increased transaction size of 12.3%.
So, when you combine the increased conversion rate on that page of 39.2% and you also combine that with the increased order value, of another 12.3%, that produces a net revenue gain through this one strategy of 56%, which is pretty substantial. The other thing is that’s just a revenue gain. The cost of traffic remains the same. So in terms of profit, this probably has boosted profit by about 300% or somewhere near that number.
So that’s a working example of how to do upsells on the web. You can do this with an e-commerce product or you can do it with a lead generation scenario. For example, you might offer a free report and on the thank you page of the free report, you then offer people a chance to have a consultation with you or go to the next step in the sale.
I’ll leave it there. I hope that’s been instructive. If you would like to know more about how we can help you implement this sort of strategy on your website, along with enhanced traffic generation and other conversion strategies, then get in touch. Thank you!
How To Combine Offline Marketing With Online Marketing
Mastering online marketing and lead generation is one of the highest-return investments your small business can make. But after a while, even the most successful online marketers run into the problem of ‘diminishing returns”.
After all, if your online strategy is heavily dependent on search engine traffic (free and/or paid), your results will hinge on the total number of people searching online for your products and services.
For example, one of our clients operates a gym in a regional centre (Geelong’s Gym). His website occupies 6 out of 10 places on Page 1 of Google for the major search terms. So there is very little “upside” left on the search traffic front. His marketing has to extend elsewhere if he is going to increase new customer volume. (Another effective strategy would be to work on increasing website conversion – but that’s another blog post!)
Combining offline and online is best
And note that I’m not merely suggesting, “if your online marketing hits a growth ceiling, you’re going to have to do more offline marketing”.
Rather, I’m talking about combining the best of both worlds – by taking advantage of the massive reach of “offline” and the superior tracking, automation and relationship-building power of “online”.
When offline traffic makes sense
Here are 3 situations when it’s worthwhile seeking out offline traffic sources:
- When the value of each customer is high. An accountant may be happy to invest $1,000 in advertising to acquire 3 new small business clients, whereas an online candle shop with an average transaction value of $25 may think twice.
- When you “know where your best prospects hang out”. Many offline publications, including magazines and trade journals, can be good places to advertise because of the high density of genuine prospects among the readership. A scaffolder advertising in a major building industry publication knows that many of the 10,000 readers are buyers of scaffolding. The same ad in a major newspaper may be of interest to only 1 in 5,000 readers.
- When online traffic is expensive. In some industries (e.g. financial services), one click from the Pay Per Click search engines may cost you $10 or more. That makes many offline advertising opportunities look cost-effective!
The winning strategy
I’ve already mentioned that the major benefit of this strategy is combining the massive reach of “offline” with the automation power of “online”.
What this means is: you use your offline marketing to drive prospects to your website, then use relationship-building tools such as autoresponder emails to communicate with new prospects and maximise the value of the leads you generate.
Here’s how it works:
Your offline marketing piece (your ad, direct mail letter or insert) promotes valuable information of interest to your prospect, that can only be accessed via your website – like an opt-in Free Report, an Audio CD or DVD.
This information is called your “Lead Magnet”, and the most popular format is a “How-To Report”. An accountant looking for more SME clients could publish a report called “9 Tax Minimisation Strategies No Small Business Owner Should Be Without – All 100% Legal And Approved By The ATO”.
Then on your website (or dedicated landing page), your prospect enters their details (either name and email only, or full address if you plan to send the promised information in the mail).
After that, your automated marketing takes over. First of all, you deliver the information you promised, which of course has to be of high-quality.
Then you use email autoresponders and/or other types of follow-up messages to drive the next stage in the process (e.g. contacting you for an exploratory consultation.)
Remember that follow-up is CRITICAL to the success of this strategy. NOT having at least 5 pre-programmed follow up steps will slash your results by 50 to 70 percent.
Top 3 offline media to test
The 3 most reliable media to test are magazines, trade journals and direct mail.
In each case, the value of response-oriented copy cannot be over-emphasised. If you are not an experienced copywriter, find someone who is – don’t be ‘penny wise, pound foolish’.
You should always remember to track everything down to the last cent. You need to know exactly how many leads, sales and dollars each promotion generates in order to optimise your results.
Here are a few more pointers for making this strategy a success…
Magazines and trade journals:
- Start with the most targeted publication possible (there’s a good list of magazines at isubscribe.com.au)
- Negotiate hard on price. You can often get good discounts for buying ‘remnant space’
- Test a small ad first – e.g. ¼ page
- Your response will tend to FALL when you run the same ad again, not rise. So if your first ad doesn’t work – change it before running it again
Direct mail:
- The quality of your list is paramount
- Lists can be found via the Yellow Pages or list brokers
- Test small and roll out what works
- Postcards work well for promoting free offerings
- Rule of thumb: a sequence of 3 postcards will garner double the response of a single postcard
As Pay Per Click traffic gets more expensive and organic search becomes more competitive, business owners who know how to connect with the right prospects will come out in front.
I urge you to try this strategy, which is likely to work even better if you’re the first person in your industry to use this form of marketing.
A more detailed description of this multi-step marketing strategy is found in the free e-course, “7 Steps To Doubling Your Website Leads”, available here:
www.marketing-results.com.au/7steps
Will Swayne
Connect with me on Twitter! I’m @willswayne
Guerilla Tunnels For Lead Generation
Almost 10 years ago, I spent 6 weeks in Vietnam with a couple of friends, wending our way up from Saigon in the South to Hanoi in the North.
One of the most interesting experiences was visiting the Tunnels of Cu Chi: the underground maze about 70kms outside of Saigon, from which the Communist Viet Cong waged their successful guerilla war against the US-led South.
These days, the tunnels have been enlarged for venal Western tourists. Even so, it wasn’t easy shimmying down narrow ladders, squeezing through passages sideways and dragging ourselves through tiny chokepoints on our elbows.
From the surface, you would never have imagined the underground city below. The tunnel network even included makeshift operating theatres, lecture theatres, dormitories, mess halls and ammo dumps.
You’d think that “stuff” below the surface would have presented a big target for the Allied/Southern forces to take aim at. And they tried everything…
They tried bombing the hell out of the tunnels with 30,000 kg “bunker buster” bombs.
Unfortunately, the unique geological structure of the soil meant that even massive explosive ordnance would only collapse a very narrow radius as the earth soaked up the force like a sponge.
They tried flooding the tunnel network with megalitres of water. But the VC built watertight trapdoors to keep the water out.
Then they tried poison gas. But the guerillas installed water-filled “airlocks” that foiled that plan as well.
The only strategy that actually gained some traction was putting together a special squad, dubbed the “Tunnel Rats”, who were sent in one-by-one with a handgun and a bowie knife between their teeth (literally!) to root out the guerillas one by one.
Being a Tunnel Rat required nerves of steel. After all, they had to negotiate the sweltering tunnels literally inch-by-inch, keeping a keen eye out for booby traps loaded with grenades, razor-sharp spikes or poisonous snakes.
While the Tunnel Rats did make slow but costly progress, the war ended before they could complete their mission and the Tunnels of Cu Chi were credited by the North as one of the keys to their victory.
So here’s the marketing lesson in all this: truly world-class online lead generation systems are like a guerilla tunnel network, loaded with the marketing equivalent of tripwires, trapdoors and motion sensors that allow you to reach the right prospects with the right message at the right time.
When your guerilla tunnel network is built, not only can you communicate with everyone in your circle of influence in the most appropriate way and drive extraordinary ROI – but you also make it V-E-R-Y difficult for your competitors to work out how the $&*#^ you’re doing it, because so much lies “below the surface”.
Especially if you sell something expensive or complex – building guerilla tunnels into your lead generation process will pay off tremendously.
And don’t be put off by the apparent scale of the task. This is a step-by-step process where layers of complexity can be added, one at a time.
All you have to do is begin.
We are super-busy at the moment and are not in a position to accept new clients until at least September 1 (other than people we’re already talking with).
But what I have done, is put together an “Autoresponder Technology Guide” which explains the best automation systems for building your “Guerilla Tunnels”. Here’s where you can grab your copy:
Cool Tool For Researching Domain Name Availability, FAST
“All the good domain names are taken”.
That’s a line I hear quite often. While it’s true that many good (obvious?) domain names are taken, many are still available.
One tool I use quite a bit for checking domain name availability is AjaxWhois – here’s a brief 2m 47s video that explains what it is and what it can do for you.
The 80/20 Rule On Steroids – For Lead Generation Websites
I’m sure you’re familiar with the 80/20 rule – the astonishingly elegant discovery that in a huge variety of scenarios, 20% of inputs result in 80% of outputs (more or less).
No doubt, you’ve also heard these familiar examples, such as:
20% of customers drive 80% of your profits
80% of sales come from 20% of your products
80% of your value is delivered in 20% of your time
Etc.
But what you may not know is that the 80/20 rule is “fractal” – meaning you can apply it infinitely. Let me give you an example, applied to your website:
20% of website visitors will drive 80% of opt-ins
20% of opt-ins will drive 80% of enquiries
20% of enquiries will drive 80% of sales
20% of sales will deliver 80% of profits
In the example above, 0.16% of website visitors drive 41% of profits.
What about in reality?
Well, in the case of Marketing Results, 1% of our database drives 90% of revenues.
The next 3% drive the remaining 10% of revenues, and the last 96% represents a cost.
So a lot of what I do from a marketing perspective is simply aimed at “finding the top 1%”.
If I can find twice as many of “the top 1%”, our business would double. (Actually resourcing for that growth is another story — more on that below).
What this means for you is – your marketing should be LASER-focused on the 20% that generate 80% of the results at EACH stage.
A business owner recently asked me, “what should I do about the 80% of website visitors who leave my website without enquiring or opting in?”
My answer: NOTHING – focus on what to do with the 20% who ARE taking action.
What should you do with the 80% of people who don’t open your emails?
NOTHING. They ain’t THAT interested. They ain’t buying.
Focus on having the critical conversations you need to have with people who ARE listening.
How about your marketing budget?
80% of your marketing budget should be spent on the top 20% of your database.
I would sooner send an elaborate direct mail package costing $30 to a red-hot prospect than spend 10c on a faxout to an unqualified suspect.
When we start working with a new client, one of the first things we do is pinpoint the critical leverage points that are the hidden drivers of their leads, sales and profits.
Because working on the WRONG parts of your marketing process is almost as bad as not working on anything at all.
On that note…
Due to overwhelming growth at Marketing Results over the last 6 months, we are not accepting any new clients until at least 1st September.
You are still welcome to enquire regarding your upcoming online marketing and lead generation projects. Just be aware that we are currently running a “waiting list” system, with the earliest new start date 1st September and a requirement of a nominal deposit to reserve your place for:
- Web Design Projects
- Pay Per Click (Google AdWords) Optimisation
- Conversion Optimisation
- Holistic Lead Generation Consulting and Implementation
Don’t Start Marketing When You Need Clients
Don’t start marketing when you need clients. By then, it’s too late.
You need to start marketing before you need new clients.
I know that sounds self-evident. Yet so many business owners I speak to continue to do it the wrong way.
E.g.
[In January] “Our high season doesn’t really kick off until April so we we’ll probably look at improving our website around then.”
(Way to miss out on the best time of year)
“We’re quite busy at the moment so we’ve turned off some of our advertising”
(What will your sales pipeline look like when you’re not so busy?)
The Pain of Stop-Start Marketing
Because we specialise in online lead generation and I tend to talk with business owners from many industries where there is both a “sales” and “production” function, I come across many people plagued by Stop-Start Marketing.
Stop-Start marketing occurs when you get very focused on prospecting and land a few deals….
…then go into “production mode” to deliver what you’ve just sold…
…while neglecting your marketing and sales function…
…then once the work is delivered, you find yourself staring at an empty sales pipeline, so it’s…
…back to going nuts on prospecting while your cashflow starves…
The Solution To Stop-Start Marketing
The solution is to introduce more consistency and automation in your lead generation in order to keep sales opportunities flowing (almost worse than too few leads is lumpy or unpredictable lead flow.)
Ideally, lead generation, lead management and actual “selling” should be kept separate (i.e. the same person should NEVER perform both functions). That ensures your salespeople are focused on SELLING rather than administration and maximises total sales throughput (thanks to Justin Roff-Marsh at Ballistix for articulating this idea so well – grab this free Sales Process Engineering Report if you’re interested in learning more).
There is no doubt that the best way to institute an effective, low-friction lead generation system is using the Internet in concert with marketing automation tools such as autoresponders, prospect filters and CRM systems…underpinned by the right marketing strategy, of course!
Particularly where prospecting activity is labour-intensive and/or passive (think: cold calling, networking and word-of-mouth), Stop-Start Marketing is never far away.
By removing that highly labour-intensive prospecting activity from the process, you’re freed up to spend more time on high-value activities such as sales appointments.
I go into more detail as to what this automated lead generation pipeline looks like in my free course, “7 Steps To Doubling Your Website Leads”
Do you have any feedback on this article? Why not leave a comment?
Powerful Question: How Can *I* Add Value To *YOU*?
A friend recently shared with me a powerful distinction that I’d like to pass on to you (He may wish to remain nameless, so I’ll preserve his anonymity in this post!)
In many industries, there is a “pecking order” of key contacts, clients or movers-and-shakers who have the ability to unlock doors and smooth the way for you. Let’s call them Linchpins (with apologies to Seth Godin).
What most people do to these Linchpins is to try to extract value from them before providing value. Pitch them on something. Sell them something. Ask for advice or a favour.
Trouble is, everyone else has the same idea. Linchpins are in demand and surrounded by deafening levels of “noise” that make it very difficult for you to gain traction.
This “get before you give” approach seldom works, yet we all do it.
Rather than think about what we can get, it’s much more powerful and effective to think about how we can add value. The key question is:
How Can I Add Value To You?
This might sound like another worn-out self-help trope, but have you considered how few people put this into action?
I’m a pretty pragmatic person. I do what works. Here are three examples of this technique in action:
- A friend of my friend was a successful affiliate marketer and wanted to break into the “big time” seminar circuit. He asked this question of a “household name” Internet marketer and ended up helping him with some Google AdWords stuff. Less than a year later, this friend of a friend found himself on the seminar circuit, doing what he always wanted to do.
- My friend used this approach to build a relationship with the Linchpin in his market space. Within 2 days the Linchpin himself had taken a good look at what my friend had to offer, endorsed his product and tentatively proposed a joint venture to co-promote his product down the track.
- I used this approach with a person of influence in my target market. It immediately got some constructive dialogue going — I was able to deliver some value and my “Linchpin” was able to do several things of value to me.
Try this question. It works!
Reporting From Victoria Falls, Zambia
Just a quick note from the Royal Livingston Hotel in Livingstone, directly adjacent to the Victoria Falls on the Zambian side. I’m currently enjoying a few weeks of RnR and will be back to blogging some time in late January…..
Differentiation Is Key
When a prospect searches on a search engine for your product or service, more often than not he has already decided to buy. What he hasn’t decided yet is who to buy from.
The natural extension of this is: you don’t need to sell your website visitors on the concept of buying widgets. You need to sell them on buying YOUR widgets.
That means your marketing message has to focus primarily on differentiation from the competition and any other alternatives they have available to them.
When you successfully establish real points of difference in your prospects’ minds, you’ll not only generate more leads, but you’ll also reduce the proportion of people who are “shopping around”, versus those who have already made up their minds to buy from you.
Reasons Why Getting New Business From The Internet Won’t Work
One of the questions I get asked almost every week is “will online marketing work in MY industry?”
Usually the question is followed up quickly by reasons why it WON’T.
Reason Why Internet Marketing Won’t Work #1:
“We get all our new customers by referral. People just don’t look for our service on the Internet”
This statement came from the owner of an (admittedly successful) business in the technology space that has grown strongly via strategic alliances and, yes, referrals.
Meanwhile, we happened to have a client in the same city and the same industry, who was keeping 4 full-time salespeople busy with high-quality sales leads generated via the Internet.
Google is the new Yellow Pages. You might be surprised how many people use the Internet as a primary source of research. Not only consumers but purchasing managers and C-level executives who have needs that need fulfilled and money to spend.
Reason Why Internet Marketing Won’t Work #2:
“You recommend Google AdWords as a core traffic generation strategy, but I never click on the ads… I always click on the left side of Google.”
This is another one I hear surprisingly often.
My response is always the same: Google‘s ad revenue in Australia is in the billions, and my company Marketing Results directly manages over $1.5 million in AdWords clicks every year – so somebody must be clicking on the ads. 
With the right strategy and execution, I believe AdWords can be made to work in almost any lead generation scenario.
If you think Internet lead generation won’t work for you, is that really true or have you just not found the right formula yet?
Something to think about…
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