Increasing Lifetime Customer Value (sales funnels explained) Pt 1

Share this valuable content with your friends!

Increasing Lifetime Customer Value (sales funnels explained) Pt 1

If you have ever been to a restaurant or fast food chain you have probably been exposed to a “sales funnel.” Think about it; when you go out to eat don’t they always try to get you to buy dessert or have fries with that? And when you shop at retail stores they always try to get you to buy one more thing as you are checking out, normally something which enhances your original purchase.

These are basically cross-sells and are a tried-and-true way of increasing the value of your shopping cart; in short, they are a sales funnel at work. In this series of 3 posts, we’re going to discuss this and two other ways to increase your profits.

What Are These Types of Sale?

What we’re talking about is the practice of encouraging customers to purchase either products which enhance the original purchase at a fraction of the original cost (add-on), or more expensive products (upsell), less expensive alternatives or entry level (downsell), or just additional products – sometimes complementary and sometimes just related (cross-sell). In other words:

  • Add-on – Encourage customer to buy additional product which further enhances the original purchase but at a fraction of the cost e.g. accessories.
  • Upsell – Encourage customer to buy a more expensive item instead of the item they thought they wanted.
  • Downsell – Encourage customer to buy a less expensive item if they are wavering about buying the first item.
  • Cross-Sell – Encourage customer to buy additional products, sometimes complementary to the first purchase but sometimes just related products or services.

It’s important to understand how and why each of these practices helps increase your revenue. Even if you get the terms mixed up, as many people do, these options should always exist in your business practices. Luckily, with technology it’s easy to set up your funnel so that all of this is automatic.

How Do They Work?

Most people who are in a buying frame of mind don’t really like leaving without anything. They also like to feel as if they’re on the inside and getting a good deal. As a business owner, you want to ensure that you never leave money on the table. As a customer, you want to ensure that you get a good deal.

Upsells, downsells, and cross-sells all work by playing into the idea that the customer doesn’t want to lose out. In some ways, it’s a psychological trick that feeds into the customer’s ego, but it’s so subtle that it doesn’t make the customer feel pushed or coerced.


  • Add-on Example – Let’s say that you sell digital products online, and you are promoting your “Guide to Sales Funnels” for $27 dollars and your customer clicks on that item to purchase it. When they checkout, you may also have a handy checklist to help them implement the training quicker and easier and you offer this for $17. And because this enhances the original offer AND is cheaper, many buyers will take you up on the add-on offer.
  • Upsell Example – Let’s say that with your “Guide to Sales Funnels” you also have a “done-for-you” option for $127. This means that right at checkout, you can offer anyone wanting to buy the 27-dollar guide the option to upgrade to the “done-for-you” option and get the guide for free. This is a wonderful example of upselling.
  • Downsell Example – Let’s say that your customer goes to the sales page for the 127-dollar offer for the done-for-you sales funnels, but they’re not really ready, so they leave the shopping cart without checking out. You can set up the page to send them directly to the 27-dollar guide offer, or you can use remarketing ads and send them to the 27-dollar guide offer.
  • Cross-Sell Example – With either of these options, you can include some additional options. Right on the checkout page or after they check out, you can send them to the download page where you can offer additional items to them. Either way, these additional items are somehow related to the same topic as the original offer.

So, for example, you may have an affiliate link to software such as or that you can recommend. Or, you may have a graphics package that will work for them to help create their sales funnels that you can promote now. Or, any number of reports, books, or offers that relate. The point is that the offer is in addition to whatever they’re buying.

The reason this works so well is that your customer was either in a buying frame of mind already, or really wanted to buy but could not afford your original offer. The point is they are in your shopping cart and inside your funnel now, and you need to take full advantage of that fact.


Getting Started with Upselling, Cross-selling, and Downselling

The key to creating just the right sale at the right time is to understand your customers’ buying process. But, unlike most sellers, you’re not going to stop when they choose to buy.

Most buying processes are similar and look something like this:

  • Awareness – How does your customer find out about your offerings? They usually search the internet, ask friends, or look on social media. This means that you’ll need to have social media updates, blog posts, articles, and information out there so that your customer learns about your solution.
  • Investigation – When your customer is doing their research, you want to ensure that you have enough information for them. Usually, at this point they might sign up for your email list to get a white paper, eBook, view a webinar or get other types of industry reports that you’ve created.
  • Evaluation – At this point your customer likely has signed up for other people’s lists too, so you need to ensure that you are filling in all the gaps of information by offering case studies, demos, testimonials, free samples and anything you can reasonably offer so that they can make the choice you want them to make.
  • Commitment – Finally your customer decides to buy what you’re offering. This is where most people stop. But this is not where you will stop if you learn to create powerful funnels using upsells, cross-sells, and downsells to keep people inside your funnel and increase their lifetime value.

Once you’ve worked out your customers’ buying cycle, you can focus on what happens after commitment. What do you do after they buy? Now is the time to focus on upselling and cross-selling. Depending on what they’ve bought, you should determine whether customers who buy that item will want additional add-on items that you can cross-sell, or whether you have a bigger and better offer for them that they can switch to.

In the next post, we’ll look at how to best use these effectively and how to position yourself for the biggest Return On Investment (ROI)…

Tags: , , ,
Previous Post
Affiliate Recruitment Strategies Blog Post
Affiliate Marketing Articles Information Marketing Tips Tutorial

Affiliate Recruitment Strategies (19 Proven Tips For Recruiting The Best Affiliates)

Next Post
5 Reasons Social Media Blog Post
Articles Information Marketing Social Media Tips Tutorial

Five Reasons Your Online Business Needs Social Media