Are you looking for simple ways to upsell and cross-sell to your existing customers? If so, you’re in the right place. These approaches can help you increase sales, customer loyalty, and retention rate among existing customers.
Before we move forward, let’s understand these two terms, so you know exactly what we are referring to when we say cross-sell and upsell.
Defining upselling and cross-selling
Upselling is the practice of encouraging customers to purchase a comparable higher-end product than the one in question while cross-selling invites customers to buy related or complementary items. Companies that excel at upselling are effective at helping customers visualize the value they will get by ordering a higher-priced item.
Cross-selling identifies products that satisfy additional, complementary needs that are unfulfilled by the original item. Cross-selling is a strategy where you recommend additional products to a customer to increase their average order value. Cross-selling is prevalent in every type of commerce, including banks and insurance agencies. Credit cards are sold to people registering a savings account, while life insurance is commonly suggested to customers buying car coverage.
Cross-selling and upselling are similar in that they both focus on providing additional value to customers, instead of limiting them to already-encountered products. In both cases, the business objective is to increase order value and inform customers about additional product options they may not already know about. The key to success in both is to truly understand what your customers value and then respond with products and corresponding features that meet those needs.
Now that we have explained these terms, let’s look at four ways to use these strategies to grow your business.
1. Send a follow-up communication
Follow-up emails/texts are a great way to cross-sell to your customers. When someone buys a product from your online store, they will likely have to sign up to get the confirmation email on their order.
Not only will these sign-ups help you grow your lead list, but they are also an excellent opportunity to showcase relevant products to each customer.
You can use this opportunity to ask customers about their goals, pain points, and buying habits. Compile all of this information together, and you can create customer segments that clearly define the people who are frequent visitors to your customer portal.
Let’s look at Myntra for a real-world example:
Image Courtesy: Myntra
We’ve all received an email after making a purchase on Myntra that summarizes other products that we might find useful based on our order history. This interaction is cross-selling in action. The purpose is to make buyers aware of new products and ensure that they are getting the maximum value for their money.
2. Focus on customer milestones
Most businesses have a clearly defined customer journey that they imagine when they think about how consumers will interact with their brand after their first purchase. If you’re in tune with your audience, you probably have an idea of how long customers will continue buying or using your product. Use large and small milestones to create relevant follow-up offers for your customers.
There are plenty of milestone points you can use for upselling and cross-selling. Here are some of our favorites:
- Has been a customer or subscriber for a predetermined amount of time. (Will vary based on your industry)
- Spent a specific amount of time, or completed certain actions, using your software. (SaaS)
- Contacted support with questions about a product or service. (Real-time upsell/cross-sell)
You’ll find that there are plenty of milestones for each audience segment. The goal here is to make sure you’re adding more value to your customer’s lives by offering the right product at the right time.
3. Personalize on-site offers
Failure to implement personalization could result in customers losing trust in your brand, simply because they do not see suggestions that reflect their shopping habits and interests.
People tend to trust businesses that address them by name, make offers based on purchase history, and understand on-site behavior. When consumers have faith in your company, they are more likely to take advantage of upsell and cross-sell offers.
There are a few creative ways you can implement personalization on your website for increased sales and customer loyalty.
4. Use FOMO marketing
FOMO is a phenomenon where people are likely to purchase a product if it’s in limited stock or available at a low price for a set amount of time.
An impressive 60% of people purchase because of FOMO within 24 hours. In other words, if you want to increase the success of your cross-sell and upsell strategy, leveraging FOMO marketing can yield significant results for your business.
When you’re using email, you can add FOMO to your follow-up email, or make it a part of your drip campaign. If a user just purchased your product, you could send them an email series that goes over the basic features and benefits. You can include a limited-time upsell offer at the end of the series for a much lower price. If someone was thinking about upgrading but is still on the fence, this practice can tilt the scales in your favor.
Final Thoughts
Upselling and cross-selling get a negative reputation from business owners that don’t correctly implement this strategy. Your goal should be to get more sales, but more importantly, to make sure that customers have exactly what they need to solve problems and reach their goals.
Offering an additional product or upgrade makes sense when a consumer uses it. Pay close attention to your target audience and how they are engaging with your product or service. Use what you learn to serve up personalized upsell and cross-sell options designed to boost your profit margin while pleasing your existing customers.
