A lot of what we do here at Uscreen is researching and testing new ways of increasing your video streaming revenue to help you grow your business.
And, our latest experiment has been a real game-changer.
At the start of 2021, we rolled out a Subscription Upsell feature for some of our clients to test out. This feature allows you to invite potential users to consider subscribing for a longer period of time right before they complete their checkout.
More specifically, it prompts potential monthly subscribers to sign up for a discounted annual subscription. And, the results have been incredible!
In fact, the Subscription Upsell feature has helped Uscreen customers see a 553.8% increase in revenue in the first 4 months of 2021 alone. That’s 6.5X growth!
In this article, we’re going to break down exactly what this marketing trick is, why it works, and how you can start using it in your video business right away.
The Marketing Trick That Helped Uscreen Customers Earn 553.8% More In 4 Months
On the 20th of January 2021, we rolled out the new upsell feature to a percentage of our publishers for their video websites. Of the sample group, 278 implemented it into their sales funnel.
They each followed a specific process:
- They targeted leads who wanted to purchase a monthly subscription.
- They prompted them before they reached the checkout page.
- They offered a discounted upgrade to their annual package.
Here’s how one of the upsell prompts looks like in action, from Coaches Voice Academy:
We’ll get a little more into the psychology of why they followed these exact steps later on in this article. For now, let’s look at the results of using the upsell feature in 4 months…
Without the upsell offers, these 278 publishers would have attracted enough monthly subscribers to generate a combined total of $107,788.98 in revenue.
When buyers were presented with the upsell offer, 5251 people chose to upgrade their package to an annual subscription. This took the combined total income generated by publishers to $704,811.44.
That means a total of $597,022.46 extra revenue was generated across all publishers in just 4 months. (Or, a 558.8% increase!)
Better still, this upsell feature was easy to implement and can be set to run on auto-pilot to continuously generate income for the long term.
Now, before we get into that, we need to address the big discount-offer-shaped elephant in the room…
Discounts: A Proven Way To Increase The Lifetime Value Of Your Customers
It’s common for discounts to make you feel like you’re going to make less money. You probably felt a pang of worry when you saw us suggest it earlier.
But that’s not always true. Especially for subscription services like yours!
Because converting a new user to a discounted annual subscription will generate more income than converting them with a higher-priced monthly subscription. And, we can prove it.
Take a look at the numbers…
The average length of a monthly user’s subscription (aka retention time period) is between 3 and 6 months. (You can see accurate average figures for your industry in the table below.)
This means their “lifetime” as a customer is much less than your annual subscription period. In fact, it hovers around 50% of it.
If you’re an eLearning video business that offers a $10 monthly subscription, the predicted average lifetime value (LTV) of a potential monthly subscriber is $47. ($10 x 4.7 months)
Now, let’s say you prompt that potential customer to upgrade from a monthly subscription to an annual one. And you do it at a discounted rate of $7 per month. How does that look?
The new lifetime value of that customer is $84. You just gained $37 in income from that one user alone, because that customer will pay $7 for a total of 12 months.
The monthly fee is lower, but the total income generated is higher because you’re going to retain them as a customer for a longer period than you probably otherwise would have.
That money is paid upfront and is guaranteed for the lifetime of that customer. Even if this only converts 10 extra customers a month for our example elearning video business, that’s an immediate increase of nearly $400 a month.
And the reality is:
We’ve seen customers convert 50 to 100 customers a month with this upsell offer. That’s a lot of additional lifetime value!
But why does this work, and will your customers actually go for it?
The answer is yes; let’s take a closer look at why.
Scarcity & FOMO: Why Upsells Make Your Customers Buy More
Upsells are a tried and tested marketing/sales strategy.
They work by tapping into some primal psychological elements that influence how we buy products and perceive value.
Let’s say you’re a newlywed looking to learn more about successful marriages. You’ve come across XO Now and are interested in signing up for one of their packages.
You’re unsure about what package to choose so you opt for the low-commitment monthly subscription because, even though it’s a higher monthly cost, you can cancel anytime.
When you make this decision you go into what’s known as “purchasing mode.” You know you’re going to spend money here. But, there is a subconscious question you’re also asking:
How much am I going to spend?
Because you’ve committed to spending money and you want the content behind their paywall, you’re open to negotiation, as long as the deal feels worth it and you get more value from it.
This is a great time for XO Now to present you with an upsell. Which is exactly what they do. They show you an offer for their annual subscription at a reduced price:
This offer will trigger some core emotions that will make you reconsider and evaluate the decision you’re about to make, like:
- Desire: you want this product, and you want the best deal.
- Scarcity: if you miss this deal now, it’ll be gone forever.
- FOMO: what will happen if you miss out on this deal?
It will also trigger the reward sections of the brain that you associate with sales and discounts. It’s much easier to rationalize a purchase when you’re saving money on it.
This means you’re now seriously considering swapping your low-commitment $9 payment for a much longer commitment at the higher $55.53 price point.
This is exactly what XO Now did and successfully converted 293 customers from monthly to annual subscription plans in the 1st quarter of 2021.
Automatic upsell features like this can be a powerful way to generate extra income for your subscription video service without adding to your workload.
In the next section, we’re going to show you how to create these upsells in Uscreen.
How To Create Powerful Upsell Offers In Uscreen
The Subscription Upsell feature is under the Marketing Tools tab of your Uscreen dashboard.
Here you’ll be able to input all of the details – such as discounts and subscription options – that will round out your upsell offer. For the actual step-by-step tutorial on how to create your upsell, you can check out our how-to in our help guides.
In this section, I’m going to talk about the key ingredients you need to create a powerful upsell offer.
1. Offer At Least 2 Subscription Plans
You’ll need to be offering your customers at least these 2 subscription plans.
- Monthly: a recurring package at a higher monthly price point.
- Annual: a package billed annually at a lower monthly price point.
These 2 options should be clearly displayed on your website. You could even add a Quarterly subscription like FLY LDN Online have here:
It’s important that your potential customers can see the normal price of your annual plan. This will increase the psychological impact of the discounted offer later on.
2. Create An Impactful Discount Offer
Identify a discount for your annual offer that works for you.
The offer needs to be powerful enough to make your customers stop and think. They should feel like a discount this good will only happen once!
Based on our internal data, here are the suggested minimum and maximum discount offers for your industry:
3. Have A Strong Upsell Pop-Up
To really trigger those emotions, you’re going to need to pay attention to the words and phrasing – otherwise known as copywriting – in your offer.
The key here is to:
- Emphasize the urgency of the deal.
- Show them how much they’re going to save.
- Create a strong call to action.
The good news is that you can do all of this with just a few carefully crafted sentences.
Because these potential customers are already sold on your product, you can avoid rehashing information and get straight to the benefits of upgrading their subscription.
You can see how Cheer Live has done this here:
To do this yourself, you should:
- Highlight 2-3 key benefits of upgrading (what they stand to gain).
- Focus on the discount (what they stand to save).
- Remind them this is a one-time offer (create urgency).
Which will lead them directly to your call to action to upgrade their subscription
Wrapping This Up…
Upsells are an incredible way to boost your income on autopilot. In just 4 months we saw it drive 553.8% more income across our publishers!
If you want to see how to set up an upsell offer for your Uscreen video website, you can go straight to our help guide here.
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