In the cut-throat world of domains, upselling has become the key to profits. With razor-thin margins on popular .com sales, the registrars have been forced to aggressively upsell additional domains and services such as hosting.
Despite the annoyance to regular domain buyers, these sites are an excellent case study in effective upselling.
Upselling can be a massive source of additional income and a huge boost to revenue for any business.
1. Upsells should be priced low enough to be an impulse buy
When users are purchasing a product, they are very unlikely to purchase an upsell which makes a large difference to the cost of the item.
NameCheap take advantage of this by offering low priced options for upsell in the basket:
Offering PositiveSSL at just $1.99 on a $10 purchase hits the right price point. The actual cost is small (only $2), even though it adds 20% to the total order value.
The Full Featured Web hosting, however, at nearly 5 times the cost of the original domain is unlikely to generate many sales.
Customers expecting a $10-$15 purchase are unlikely to suddenly make a $60 purchase. Presenting this as "Just $3.95/month" (similarly to the One Page Website), would increase the likelihood of a sale.
When offering an upsell, make it a price point that appears to the user as significantly cheaper than the original product they were buying.
2. Present the upsell as benefits to the user
CrazyDomains are very good at selling the benefits of their upsells. Rather than simply encouraging the purchase of other domain extensions as a 'bundle', they give good reasons for the customer to consider this option:
By addressing the benefits to the customer (that competitors won't be able to 'steal' your brand), the user has a good reason to buy. They understand what they will gain from the product, and can use this context to make a decision.
Similarly, rather than just offering "Domain Certification" as an upsell option, CrazyDomains explain the benefits of having this service, and how it can make a difference to your business:
They also demonstrate how e-mail will benefit your business, rather than just selling the features of the service:
By highlighting the benefits of a product, rather than its features, customers will understand what it offers them and will be more likely to buy.
3. Encourage the user to choose between options
After adding a domain to GoDaddy's basket, it offers the option of adding hosting to my purchase:
GoDaddy has presented the upsell to Website Builder/Hosting as a choice between two options: either Website Builder + Hosting or just Web Hosting. This is a strong approach to upsell as it forces the user to make a conscious decision.
Contrast this with 123-Reg, who offer a similar upsell screen. Instead of an either/or choice, Whois Privacy is presented as an optional extra:
When customers are purchasing, there is a general inertia. They will usually take the path of least resistance.
By offering a choice (such as different levels of hosting), the user must make a conscious decision between the options rather than being able to just ignore the upsell.
Although this runs the risk of them cancelling the purchase (so should be split tested), it forces the upsell to be considered.
Whenever possible, make the user choose between different options, rather than requiring them to add an upsell to their order.
4. Use price psychology
When adding a domain to the basket, GoDaddy offer three levels of pricing for Privacy Protection:
It has used classic price psychology, offering the default as a middle option. When offered a far higher priced alternative (Business Protection is three times more expensive) and a low priced (free) alternative, users are most likely to select the middle option.
It is a similar situation to choosing a wine in a restaurant, where people are reluctant to choose the cheapest bottle, but don't want to pick the 'premium' option. It gives them an easy compromise choice that is neither the most basic, nor too expensive.
When aiming to do an upsell, try to offer it as a choice of levels rather than just one, as users are more likely to consider it.
Pitch the upsell as the middle option of three prices to make people more likely to feel that it is affordable. Adding discounted prices further pushes the idea that the user is getting a good deal.
5. Offer the user an unbeatable deal
When adding to basket, GoDaddy offers a package of domains, which strongly targets customers' motivation for a good price:
Here, I'm being offered a great bundle deal, saving 54% on the total price. The real strength in this offer is that it makes it a very compelling discount.
A 10% or 15% offer wouldn't have caught the user's eye. Making them feel like they're getting a fantastic deal, however, means they're more likely to take up the offer.
GoDaddy has also cleverly used ^^ instead of asterisks to attempt to avoid the usual stigma attached to having * next to a deal. Users have learned to be wary of these, but by using a different character, they may avoid this problem.
When trying to upsell, offering a compelling offer may encourage users to engage.
6. Make the differences between options clear
Register.com takes the approach of offering the user different levels of service as the upsell:
This works well as it makes the benefits of each level clear. At the Domain Only level, two ticks imply that the package is good value (giving people a reason to continue).
By using three ticks for the upsell options (and icons above to show the extra services), the packages appear to be better and the user can clearly see the benefits they are receiving.
This could be improved, however, by showing which features are common across all packages. This would result in the third option having six features listed, which would be more compelling.
When trying to upsell a user to a more comprehensive package, make the difference between the options very clear. Make higher cost packages appear more comprehensive by showing icons or checklists (and don't forget to explain what these additional features are, if it's not clear).
7. Make the upsell relevant to the user
GoDaddy does a great job of upselling when a customer searches for a domain. By detecting the user's geographical location (UK) it automatically offers me the chance to purchase the .co.uk domain:
This is a highly relevant offer, as it is made clear why this is a benefit to me (as a UK-based buyer). They also push a strong reason to buy (let UK shoppers know that you are local).
Any upsell attempt must be relevant enough to the item being purchased for the user to consider it.
8. Don't increase time or number of items without asking the user
GoDaddy upsells users when they reach the basket by increasing the cost of the order. Despite promoting the domain as £6.99 on the search results, the price in the basket has risen to £16.98:
It has defaulted the domain term to two years (£6.99 is for one year only). Although this used to be a common requirement for domain purchases, increasing the term is now a simple upsell approach, which can often upset users.
A better approach to this would be to give the user the option to increase their term, while offering strong benefits (better pricing, added value services or the benefit of not forgetting to renew).
CrazyNames takes this approach, explaining why you should register for a longer term, while keeping the initial term at one year:
By increasing quantities (or service duration) without warning, users may be confused and choose not to convert. Instead, give them reasons to increase the quantity of items ordered.
9. Take a long term approach to upselling
One useful technique for upselling a user is to take account of their future purchasing activity, rather than just focusing on the individual basket cost.
CrazyNames offers an Auto Renew option which takes advantage of people's reluctance to change services. When it comes to renewal, it hopes that the automatic option will appear easier to the user than finding another provider, increasing lifetime customer value:
One very powerful technique being used by Namecheap, is the upsell of WhoisGuard:
As a very low cost service to offer, Namecheap can offer this as a free extra. Giving away a value added service for free for one year is a great upselling technique.
When the free year is completed, users will be used to having this service, and for the small marginal cost are more likely to renew. This also takes advantage of users who don't realise that they're paying in year two, or just can't be bothered to cancel the feature.
Always consider the total lifetime value of your customer and consider making upsells that will help to increase this, rather than initial order value.
Conclusion
There are many lessons that any business can take from the upselling of domain names. By studying what has been done well and what has done badly, you can create an upsell campaign that is both positive to revenue, and doesn't hurt your overall conversion rates.
Upselling can be a huge benefit to your business and should be a major part of an optimisation campaign. It is always important to test presentation and deals when offering upsells and to ensure that overall conversion rates are not reduced.
