Upselling in the buying process,
is the most basic version of bundling…
and we need to have a plan for 3 elements of this process:
Design & Development of the Offer
Strategy for Deployment of the Offer
Volume, Value & Cost Targets to delineate Success
Design always comes first
Design of an upsell style bundle starts with where it fits in the customer journey
Is our Upsells meant to get a higher AOV,
or maybe it’s designed to overcome an objection,
or maybe it’s there to introduce vertical integration opportunities
The WHY here is a vital “MUST KNOW”
When done correctly, Buy More Save More offers can become the standard offer…
We see this ALL THE TIME
Do you buy socks 1 pair at a time?
How about Soda or Beer or Batteries?
“Bulk” offers also allow for higher pricing on single items, which is great for AOV & Perceived Value
When starting your bundle development, we need to validate our offers and market test in ways that don’t harm our business as usual efforts.
Installing these offers into the typical buyer journey with our hero offer is the LOWEST IMPACT deployment strategy.
I ALWAYS start here
Making any change before the transaction, will almost assuredly have an impact on Conversion Rate
HOWEVER,
This might not be a bad thing
If we know the Value, Volume & Cost of our current journey,
then we can evaluate the impact of our upsell efforts
Ex:
Lower CR w/ higher AOV
RebUpsells are the most difficult bundle to “get right”
We have to do market research to find the best way to win the customer & inspire future actions
RebUpsells should have an AOV as good or better than the LTV of our normal flow & have a 2nd Purchase Rate that is equivalent
For a “Buy More Save More” style offer there is 1 simple principle for success:
BUNDLE THE NORMAL BUYER JOURNEY
If someone buys 2.5 times from you normally, make a “Buy 3 Get 1 free”
Beat your normal LTV w/ your AOV
The “free” item COGS is paid for by the difference in value
Here’s the Unit Economics of a RebUpsell flow
If our normal AOV is $50 w/ a Buy Frequency of 2.5 our LTV is $125
A Buy3Get1Free AOV is $150 & pays“Free item” COGS
A 2nd Purchase after the B3G1 gets an LTV of $200
If the 2nd Purchase is also a B3G1 our LTV is $300
EASY MONEY
Designing product lines that have complementary value,
allow for a customer journey to extend beyond a transaction.
The difference between a sales person & a business,
is ultimately the relationship,
that allows access to a profitable customer journey acquisition strategy
It is a sad fact,
that well thought out customer journeys with complementary products,
tends to be a minority in the business plans of most direct to consumer businesses.
Adding high profit margin junk to an offer does not improve the perceived value or customer relationship
$1 million in revenue is 20,000 customers paying $50.
It could also be 8000 customers paying $125 in LTV
It is far easier & more cost effective,both in inventory and operations to create 8,000 profitable customer journeys than to rely on 20,000 new customers at a profit
The honest truth,
is that very few products or offers have anything close to a differentiation & uniqueness that builds a moat around the customer journey.
If you cannot vertically integrate to develop an emotional relationship with your customer, you are easily replaceable.
The easiest way to ensure success with bundle development is to conduct high value and easily actionable market research.
These are the three most effective ways to get this done that are completely free and bring value immediately.
Every 8figure business I’ve scaled does this
The most essential part of conducting market research to develop your bundles is to understand how to leverage existing consumer behavior.
The least effective way to market, and most costly, is to try to change consumer behavior and teach the market how you want them to act!
If we can treat the initial transaction with a customer more as a lead, than an essential profit generation device, our business can scale with the high confidence delivery of future cash flow
Our offer positioning need to prioritize future transactions, or we’re already dead
This potential misalignment of priorities is why so many marketers and agencies can promise and deliver a great return on the ads while their clients ultimately go out of business.
If you want to grow your business, you need to rely on PSM not ROAS
This is how you grow a brand!
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