Upselling is a fantastic way to increase revenue from your existing customer base, but blasting everyone with the same offer rarely works. The key is to segment your customers – grouping them based on shared characteristics – so we can deliver truly relevant upsell campaigns. It’s about offering something they genuinely want, not just pushing products.
So, how do we do this effectively for Australian SMEs? Here are a few practical approaches.
- Purchase History: This is the most obvious starting point. Customers who’ve bought a specific product are prime candidates for related upsells. For example, someone buying a coffee machine is a great target for coffee beans, filters, or a milk frother. Analyse what products are frequently purchased together to identify these natural upsell opportunities.
- Customer Value (RFM): We use Recency, Frequency, and Monetary value (RFM) to score customers. Those who’ve purchased recently, purchase often, and spend a lot are your ‘champions’ – they’re open to higher-value upsells. Customers who haven’t purchased in a while, or spend little, might be better suited to re-engagement campaigns before we consider upselling.
- Demographic & Firmographic Data: If you collect information like industry, business size (for B2B), or location, use it! A Sydney-based plumbing business might upsell preventative maintenance packages to larger commercial clients, while offering drain cleaning discounts to residential customers.
- Engagement Level: How do customers interact with your brand? Do they open your emails, click on links, or actively engage on social media? Highly engaged customers are more receptive to offers. Segment based on email open rates, website visits, and social media interactions to identify those most likely to respond.
Don’t overcomplicate things initially. Start with one or two segments and test your upsell offers. A/B testing different messaging and offers within each segment is crucial. For example, test a discount versus a bundled offer. The data will tell you what resonates best with each group.
Effective customer segmentation isn’t a ‘set and forget’ exercise. As your business evolves and you gather more data, continually refine your segments to ensure your upsell campaigns remain targeted and deliver a strong return on investment. The goal is to build stronger customer relationships and maximise lifetime value, setting you up for continued growth into 2026 and beyond.
Your next step? Review your existing customer data and identify one segment you can target with a simple upsell offer this week.
