7. Cross-Sell & Upsell
CRM (customer relationship management) platforms enable brands to track and store behavioral data about customers. Customers produce a great deal of data that can give you insights not only into the behavior and potential actions of a particular customer, but also when viewed as data-sets can predict trends and behaviors of different categories of customer.
CRM data combined with marketing automation data can tell a brand what the activity of a prospect or customer is likely to be within the brand’s eco-system. When married to recommendations based on analysis of large data-sets of customers this can result in very effective lifecycle management.
It can also tell you the right thing to pitch next, and when to pitch it.
CRM platforms are increasingly integrated with both MAP (marketing automation) platforms, which is only logical and a big step forward in unifying the entire marketing technology suite.
Upselling happens at the point of sale vs. cross-selling, which should be part of an on-going customer strategy. According to Forrester, upsells and cross-sells can deliver as much as 30% of ecommerce revenues. Wells Fargo, for example, has a strategy that calls for selling an additional product to every customer, every year. They are, by the way, by far the most successful cross-seller in the financial business.
Cross-selling should be very strategic and driven by behavioral data if it is to be successful.
That data starts with understanding which segments and personas are worth pursuing and which are not. These segments could be groups that tend to overuse customer service, limit their spending, or only take advantage of steep incentives or promotions. This is very important because all cross-selling is not good. As a study by Georgia State University in the Harvard Business Review revealed, “Cross-selling is profitable in the aggregate. But one in five cross-buying customers is unprofitable—and together this group accounts for 70% of a company’s customer loss.” So the moral of this story is be sure that the customers you target with your cross-selling efforts will be profitable customers.
Assuming you have identified your potentially profitable segments, then comes the determination of what to sell each person next. If someone has a credit card, a retirement account may not be the next financial product they will want, but an auto loan might be. Analysis of large data-sets of customer behavior patterns will reveal potential answers. This should be followed up with targeted research to confirm direction. The result should be a data driven profile for your best potential segments. This you should then apply to your CRM database to identify those prospects that match. Then you wait for your marketing automation platform to alert you to pre-set trigger behaviors from matching candidates that indicate a prospect who is ready to buy. That’s when you fire off your offer; the right offer, to the right person at the right moment.
Upselling is different to cross-selling. It is what it sounds like, persuading a customer to buy a more expensive item or make their purchase bigger with additional products. Unlike cross-selling, it happens within the window of a purchase that is already being made, or has recently been made.
There are lots of upselling techniques, but some that you may have seen most often are social proof recommendations such as “Customers also bought…”, bundling, where you offer packages at special rates, which ups the order size. Attracting interest with a low price and presenting buyers with more expensive options at the checkout, is another common technique used by upsellers. JetBlue, for example, encourages passengers, when they are completing their purchase, to stretch their legs with their “Even More Space” option. Since 2008, when it was introduced, they have more than quadrupled revenue to over $200 million from this source alone. Tactics like showing how much a customer can save, or offering free delivery for an additional purchase can boost results too. Eyewear brand Toy Shades increased conversion 113% and the size of orders by 16% by adding a “popular” category on product pages and upsell suggestions at checkout.
Upselling not only produces larger orders and more revenue, but also better satisfaction with customers who are happy that you are making relevant and useful recommendations.
Upselling can be relatively simple, such as associating products together, or complex, such as offering upsells that are driven by individual profiles. Start simple and grow more complex as you accumulate data and your team gets experienced.