Increasing customer lifetime value: Upselling strategies

Upselling to grow your customer lifetime value (CLV)

Creating opportunities to upsell to your customers organically can be tricky and it often involves some trial and error for your target market. If done well, your customers feel special, encouraging them to make another purchase and ultimately increase their customer lifetime value. We know that successfully utilizing samples can lead to upwards of a 7% conversion rate in a future transaction. Another common tactic to increase the volume of sales is to provide your customers with opportunities to purchase in bulk to receive a discount. 

If you’re investing money into upselling strategies, you want to make sure they pay off. In this article we’re going to look at examples of this in practice, and show you how to best utilize the Hub to help get your CLV soaring!

Lexer tip!
To learn more about a brand that has grown their CLV using Lexer, read our blog post about Vinomofo on lexer.io. 

Using samples to generate new product sales from existing customers

Who doesn’t love a free sample? They’re a great way to provide a small thank you to your customers, hopefully making them feel appreciated, and can prove to be a very effective way to generate additional sales in the process. 

There are a number of ways you can personalize samples for your customers. You can allow them to choose their free sample when they’re making a purchase for instance, providing them with full autonomy and the best chance of trying a product they might purchase in the future. This is a fantastic way of providing a great experience for your customers. To determine what samples might be suitable, you could create some segments in the Hub to identify what other products are most likely to be purchased by your customers. 

Let's have a look at an example! 

Applying this to Fitness Co

Let’s say a customer has just bought some weight lifting equipment and some active wear from our demo company, Fitness Co. Looking at their purchases, this customer may also be  a potential protein bar customer, if given a sample of our Fitness Co Protein Bar. 

When they’re  in the process of checking out, you may be able to prompt them with something like this…

But, samples are quite a significant investment, so why not use the Hub to make sure you’re  sending samples to the people most likely to purchase the product. An effective way to determine these insights would be to compare products in a customer's first order with their second order. What are your customers buying first if they then proceed to purchase protein bars in their second order? 

So, how do we do this in the Hub?

  1. Start by navigating to Understand > Segment
  2. In the Explore Attributes section of Segment, use the Filter By… search to look for First Order: Product Name
  1. Click on the First Order: Product Name attribute. 
  1. Once open, navigate to the COMPARISON tab. Add the “Second Order: Product Name” attribute using the search bar. 

This example shows us two things about our Protein Bars. The first shouldn’t be a surprise, customers that bought protein bars in their first order are the customers that have purchased them again. 

But, we can also see in the screenshot above that the most common item purchased in a customer's first order before purchasing protein bars, is the Chloe Compete Tank. Some other items that customers purchase that might be worth providing samples for are the Celeste Sports Bra and the Erica Evercool Sports Bra. Now that you have a starting point you can create a campaign that will  make the most of the opportunity to provide samples to customers that purchase these products. 

Comparing attributes is a great place to gain some quick insights that might help you identify your next potential campaign. Then you can use the Segment Builder to really hone in on the most exciting opportunities, make some segments, and use them to drive insight driven campaigns. 

Encouraging increased volume for repeat purchases

One strategy that often gets customers over the line with a sale is a volume discount. Brands use this all the time. Instead of buying one shirt someone might buy 3 for the price of 2 if given the opportunity. This tactic can be even more effective if the customer has purchased this product more than once. It can also be a great way to move larger volumes near the end of a season. 

The Hub allows you to identify customers that have purchased a product more than once. This indicates that the customer has had a good experience with the product and wants to get more. Great news! Why not encourage them to stock up by offering them a bulk buy discounted option. You could, for example, send these customers an email suggesting a discounted “buy 3, get 2 for free!” offer 2 weeks after their second purchase. It might look something like this…

Let's have a look at this in the Hub

Let’s run through an example of how you can find the right target market in the Hub to send this offer to. 

  1. Start by navigating to Understand > Segment
  2. Add 2 attributes to the Segment Builder: First Order: Product Name and Second Order: Product Name. Leave these attributes in the PROFILES MUST HAVE ALL OF THESE section of the builder. 
  3. Hover over these attributes and click on the greater than sign to expand the attribute. You can then enter the product name you want to create a segment for. In this example we have added Leah Yoga Top to both the first and second order attributes.

Note: You could experiment with more attributes to narrow down the search such as Last Order: Date to narrow the Segment down to people that have made their purchase in the last 30 days. In this example we are going to keep it simple, and stick to two attributes. 

  1. Save your Segment, ready for activation. 

And, if you need a refresher on how to use Segment, have a read of our Creating segments article. 

  1. You can then Activate your new segment by sending the customer a promotional email offer using your preferred integration. If you need a refresher on how to use Activate there are some great articles in Learn

Other resources to help increase your customer CLV

You can increase CLV in a number of different ways, using upsell strategies is just one example. Converting one-time buyers into two-time buyers is one of the best ways to increase customer value for most businesses. We have a fantastic article that explains how to do this in the Hub, Increasing customer lifetime value: Converting your one-time buyers into two-time buyers

Effectively using upselling strategies to improve customer lifetime value

In this article we’ve shown how to utilize a few strategies to improve the customer experience and ultimately grow your customer lifetime value. The first strategy covered how to use samples to generate more sales from existing customers, and the second looked at how to increase the volume of repeat purchases. 

Want to see more examples of how to best use the Hub?

First impressions matter, why not offer first time customers an introductory discount. For more information about how you can do this in the Hub, have a look at our Welcome offer strategies article.

Updated:
January 17, 2023
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