💰 How This Simple Tactic Adds 13% More to Your Checkout Revenue

Quick note from Luke:

G’day legend! Last week was the official launch of this newsletter – thank you to all of you who reached out with kind words. I am very humbled.

As this year has taught me time and time again, doing something new is always scary but I continue to remind myself a journey of a thousand miles begins with a single step.

Thanks for coming along for the ride, now let’s get into it.

Ecommerce businesses are increasingly grappling with a critical challenge.

Rising ad costs are outpacing revenue growth from customer acquisitions, resulting in unprofitable sales.

In response to escalating advertising expenditures, discussions typically shift towards developing alternative ad creatives to attract more customers.

The problem with this approach is that it only solves one side of the equation, customer acquisition. 

While everyone focuses on the cost of bringing in new customers, the real opportunity for growth might be what happens once they decide to checkout on your site.

Let’s dive in.

The problem with only focusing on customer acquisition costs.

With advertising, you’re interrupting a customer while they’re busy scrolling or engaging in another task, asking them to spend money to make a purchase.

Even if the customer buys into your sales pitch and makes a purchase, it’s likely to be a lower purchase value than if they really had time to think about the value your products give them.

As a result, overall revenue from that transaction is low, even though the ad did an amazing job at getting the viewer to make a purchase.

Thus we run into a problem.

The first side of the Return On Ad Spend (ROAS) equation, ‘Revenue’ is low but the Ad Spend side remains constant. In other words, the total return on ad spend is low.

Instead we need to switch our thinking to increase the overall revenue from each transaction, which will drive up the return.

Here’s how.

The tactic that savvy eCommerce Owners use to get 13% more revenue from every order.

Enter the power of the post-purchase upsell.

A post-purchase upsell in eCommerce is a sales tactic that targets customers who've just completed a purchase.

Right after checkout, they're presented with additional, relevant products that complement their initial buy.

Upsells often include discounts, free shipping, or bonus items to incentivize adding more to their order, ultimately increasing your average order value and revenue without the cost of acquiring new customers. Rather than having to enter their credit card details again, they’re able to simply hit the buy button.

Post-purchase upsells aren't about pressure.

They're about offering the right products at the perfect moment – when customers are already happy with their initial purchase.

By implementing these upsells, the brands I've worked with have seen a minimum 13% increase in their average order value.

Post-Purchase Upsells In Action.

Imagine this.

A customer finalizes their purchase of a new phone case. 

While they're feeling good about their decision, a gentle pop-up appears, offering a discount on a screen protector or high-quality headphones that perfectly complement their phone case.

This is a win-win situation.

The customer discovers valuable products they might need, and you increase your average order value thereby increasing your overall ROAS.

How to implement in your business

The good news is there are several reputable apps available to implement post-purchase upsells easily, each offering different features and pricing plans.
Simply head to your eComm platforms app store and search for ‘upsell’

Rather than offer a standard complementary product, try these offers to drive immediate action:

• Percentage Off: Offer a flat percentage discount on the upsell item.

• Tiered Discounts: Offer increasing discounts based on the total order value (e.g. "Spend $50 more and get 10% off, spend $100 more and get 20% off).

• Free Gift with Purchase: Offer a free, relevant product when the customer adds the upsell item to their cart (e.g., "Buy a [upsell product] and get a free [related accessory]").

It gives the customer additional benefits that non-purchasers don’t have, allows you to mix and match offers depending on product availability and most importantly relieves the pressure for lowering acquisition costs.

If you found this newsletter helpful, feel free to share it with a friend who might benefit.

Until next time, keep living the dream 🚀

Luke