Inside the Mind of a Buyer: Understanding the Psychology Behind Upselling
Ever wondered why you said yes to the limited-time dessert when all you came in for was coffee? Or why you somehow always seem to go for the menu option at McDonald's?
That's your brain following mental shortcuts that influence your choices without you even realizing it. These cognitive biases have a massive impact on how we make decisions, especially when it comes to buying.
Good news is, you can use them to your advantage when upselling. By understanding how your customers’ minds work, you can guide them to better choices and make it feel completely natural.
What we'll cover
How cognitive biases work
Simply put, cognitive biases are proof that we aren't as rational as we'd like to think. Instead of thinking every option through, our brains often take the easy route to help us make decisions faster. As a result, those decisions are often more emotional than they are logical.
These mental shortcuts are always at work - even when your customers are making purchasing decisions. Here's how you can use them to your advantage.
1. Scarcity bias
Imagine you're shopping for new sneakers. You browse through the options and have your eye on a model that's well within your budget. But then, you see it:
Limited Release: Exclusive design available for the next 48 hours!
You hadn’t planned on buying a special edition or spending extra, but now the thought of missing out makes you hesitate. It’s exclusive, it’s limited, and it’s now or never. The urgency builds, and just like that, you’re walking out of the store with the limited release pair.
How it works
The scarcity and exclusivity of the offer trigger FOMO. The fear of missing out on something unique and rare pushes you to act quickly. You feel like if you don’t buy now, you’ll regret it later, which adds pressure to make the purchase.
The fear of loss is twice as powerful as the joy of gain. That's what makes the scarcity bias one of the strongest motivators when making buying decisions.
2. Anchoring effect
Let's say you're in the market for a new jacket. You're looking to spend no more than $200.
As you're browsing, you walk up to the discount rack and pick up what looks like a quality piece. The tag says $1,200, with a red 65% off sticker. Suddenly, spending $420 on a jacket doesn't seem like such a bad idea, does it?
How it works
The initial $1200 price tag acts as the “anchor” in your mind. Once you see that figure, everything else that follows seems like a bargain by comparison.
The anchoring effect is exactly why displaying the original price next to the discounted price works so well. The discount draws attention, but it’s the original price that makes it look like a good deal.
3. Framing effect
The place where you're most likely to see the framing effect in action? The grocery store.
For example, you might be shopping for some mayo. You see two identical jars - same brand, same volume, same price. There is only one difference:
- Label 1 says: 70% less fat
- Label 2 says: Contains 30% fat
Without even thinking twice about it, you're going for the healthier option with 70% less fat. Except, those two labels say the exact same thing.
How it works
Thanks to the framing effect, we make decisions based on the way information is presented to us. We choose the option that we perceive as better.
Let's say you offer a service for $500 per month or a discounted rate of $5,000 per year. Instead of simply listing the costs, make sure to mention they're getting two months free. Paying less overall is a smart financial decision and frames the upsell like a win for the client.
4. Decoy effect
Your favorite magazine has introduced a yearly subscription model. Which of the following three options are you choosing?
- Subscription to the online edition: $59
- Subscription to the print edition: $125
- Subscription to both print and online editions: $125
If you're like 84% of people involved in Dan Ariely's experiment, you chose option three. The other 16% chose the online edition, and nobody wanted option two.
However, when another group was presented with only options one and three, the online edition was the more popular one (68%).
How it works
The print-only option at $125 serves as the decoy. It’s not meant to be chosen - it's supposed to make the other higher-priced option look like a much better deal.
When you're selling in packages, three options work better than two. Between two packages, the cheaper one becomes the obvious choice. But when you add a third, people are more likely to see the added value and choose the middle one.
5. Bandwagon effect
Have you noticed how trends seem to explode out of nowhere lately? One minute, nobody’s talking about something, and the next, everyone has it. Stanley Cups are a great example of this.
Suddenly, it feels like everyone you know is walking around with a Stanley Cup in hand. You weren't planning on getting one, but after seeing all the buzz on social media and your friends posting about it, you start to think, “Maybe I should get one too”.
How it works
Seeing that 92% of us trust personal recommendations and 70% trust online reviews, it's safe to say we like following the crowd. The bandwagon effect taps into our need to fit in and makes decisions look less risky.
To apply this in upselling, you can use testimonials and case studies to show social proof. This creates a sense of trust and frames the upgrade as the default choice others are already making.
6. Halo effect
Ever walked into an Apple Store and felt an immediate sense of quality? From the minimalist design of the store to the perfectly arranged products, it all gives off premium.
Even before you touch a product, you’re already thinking it's worth the price. That's the halo effect in action.
How it works
The halo effect is all about first impressions. When we have a positive first experience with a brand, we assume that the product or service will live up to that standard.
Your proposals play a huge role in shaping this initial impression and create a halo effect around your offer. The client automatically associates the professional design with high quality and value. As a result, they're more open to considering your higher-tier options.
Final thoughts
When it comes to upselling, how you present the offer is everything. People don’t like feeling pressured, but they do appreciate solid advice that helps them make better decisions.
By positioning your upsell as a helpful suggestion, you can guide your customers to the best choice. Better Proposals helps make the value clear. Try it free for 14 days and see for yourself.
