Anyone who wants to learn affiliate marketing should study online marketing products – up-selling and upgrading are two of the most powerful takeaways that affiliate marketers do very well.
But what exactly are they and which should be used when?
Up-Sells vs. Upgrades
In short, here is the difference:
Up-Sell – Up-selling is offering a new or better product after a customer purchases or downloads an existing product. Cross-selling, however, refers to promoting and selling other products, which may or may not be related.
Upgrade – Upgrading refers to adding new features that enhance the capability of the product the customer has already downloaded.
For example, if a customer downloads a software program or app and you convince the customer to purchase an add-on for that product, you have just up-sold that add-on. If a customer downloads a free “Lite” WordPress theme that you’ve built and you convince them to purchase the Premium version, then they have purchased an upgrade. The freemium pricing strategy, then, is essentially a monetization strategy that incorporates upgrades.
Both are perfectly valid ways to increase revenue from apps.
Learning from Online Marketing Products
Online marketing products, such as guides that teach you how to get rich in a few hours, are very skilled with their up-selling and upgrade offers. Head over to ClickBank to see a few.
The online marketing and bot creation software, UBot Studios, for instance, uses upgrades particularly well: right after purchase, you are offered a significant discount on an upgraded license – for a limited time.
Here are three simple steps to using these techniques when monetizing your app:
1. Design your software with up-selling, upgrading, or both as an option. From the day you put your software on the drawing board, you should begin thinking of which technique you want to use – your decision can have an effect on the development process.
For example, if you develop a complete product, then later decide you want to add upgrading as a monetization option, it may be costly or even impossible to go back and make the changes.
2. To effectively monetize upgrades, segment your customer base into two groups. For instance, if your software has 20 definable features, choose certain critical features that would be necessary to a more “hardcore” group of users. In the lighter versions of your product, these features will be locked. And to unlock them, customers must pay.
3. To up-sell, design a product that can expand or expose the customer to related options. Browsers or software such as Photoshop can incorporate plugins, add-ons, and extensions. Charging for these, or charging third parties a fee to develop these plugins, is one effective tactic. Another way to up-sell is to design two products that are similar or related and then promote one alongside the other, such as a web browser and email program.
Techniques Specific to Apps
The freemium model is virtually synonymous with upgrades and up-sells. In addition to the methods mentioned above, here are a few ways to up-sell or offer paid upgrades to users:
Have users pay to remove ads. Ads are a great way to monetize an app, but some people find them quite annoying. In some cases, people are so annoyed by them that they will actually pay to have them removed. Some creative apps will also replace ads with additional features, offering a double incentive for users to pay for their removal.
Add unnecessary but helpful, entertaining, or fun features…for a price. A colorful app theme, additional sound or visual effects, and funny emojis are a few examples of additional features that don’t add functionality, but they could add a bit of fun.
Test in-app currency, products, or items. Candy Crush made something of a stir when it began making loads of revenue by offering in-game currency in exchange for real-world money. According to one source, in the first quarter of 2014, this monetization strategy earned Candy Crush more money than all Nintendo games combined.
Money isn’t everything. Consider offering upgrades and up-sells in exchange for other forms of compensation, such as social shares. The bigger your audience, the bigger your potential revenue pool. There are plenty of ways to monetize – just make sure you pick your battles and have enough of a customer base first.
Increment prices as users use more. MailChimp’s email automation service starts out free, but the more users you email to and the more you use it, the more you have to pay. This strategy works quite well in this case, since the program isn’t just entertaining, it is an investment. The more you use it, the more you are “locked in.”
To some marketers, there is no reason to distinguish between up-selling, upgrading, and cross-selling, which means to promote other products alongside the original. The exact distinction is less important than whether you are able to use product up-sells and upgrades to monetize your apps.