Shanli Liu, CPA, CTPFreedomfolio · I help 7 to 8 figure service business owners and ecommerce sellers keep 10K to 75K of profit- without IRS headaches | CPA. Virtual CFO. Tax Resolution Pro | $5MM+client tax savings | Book a free 15 min strategy call

Don't Do Upsells Like This

Name: Don't Do Upsells Like This
Uploaded: 2024-11-18T15:30:09+00:00
Duration: 22 s
Channel: Shanli Liu, CPA, CTP
Description: In this brief video, Shanli Liu, CPA, CTP, explains a common mistake in upsell pricing: offering a second product at only a modest price increase (e.g…

18 Nov 2024 · 0 min

Watch on YouTube

0:22

In this brief video, Shanli Liu, CPA, CTP, explains a common mistake in upsell pricing: offering a second product at only a modest price increase (e.g., $120 after a $100 base). She introduces the concept of "fractal" customer spending, where the top 20% of customers have roughly five times the purchasing power of the bottom 80%. Leveraging this insight, she advises that effective upsells should be priced about five times higher than the base product. By doing so, even if only the high‑spending 20% purchase the upsell, the seller can double overall revenue, making the upsell strategy far more profitable.

A lot of people don't know how to price their upsells. They have one thing for $100 and they try and upsell a second thing for $120. That's not how you want to do it. Customers tend to be fractal, meaning that the top 20% has 5 times the spending power of the bottom 80%. And so if you're going to do an upsell, make the upsell 5 times more so that even if 20% of people buy something at 5x the price, you double your revenue.