“Should I get you your favorite wine with the pasta?, the waiter asked me as I sat to have an evening meal at my favorite restaurant. Quite impressed by the waiter’s knowledge of my taste, I responded with a nod.
It was cross-selling done amazingly well.
Thinking further about this experience, I realized what happened during that quick interaction was a moment of perfect magical intersection between time, offering, and need. The waiter knew what wine I like based on my past visits, it goes well with the pasta I had ordered, and I, for sure, needed something on the side. All this resulted in a successful cross-selling outcome.
In the marketing world, such moments serve well to push the envelope for your product/services and improve revenue and loyalty. But marketers, at large, struggle with creating such experiences. The foremost reason for this is the lack of a unified view of the customer journey.
Data pertaining to the customers, these days, is spread across multiple channels. It reaches marketers in a disjointed form that is sufficient for understanding the aggregated behavior and preferences of users but doesn’t help much in knowing users at an individual level.
However, all these different sets of data, when combined together, brings you closer to your users and address some of the key questions like:
- What are your user’s interests?
- What are their most pressing challenges?
- What do they like to do the most?
- What’s the scope of their challenges?
- How do they like to spend?
- Are they looking for X with Y?
- Which channel would they prefer to communicate?
- Which payment method do they like to use the most?
- Which categories of products do they seem more interested in?
- What are the pages they visit the most?
Answering some of these questions can put you well on the path to identify the likelihood of your customer to engage with your business more. Doing so, also, will win your business those much important marginal gains.
But first, what’s the difference between both?
Cross-selling is about selling complementary or supporting products along with the main purchase.
Upselling is about convincing your customer to purchase an additional or more expensive product.
|– Would you like to have fries or Coke with your meal?||– Would you like to go for a combo meal for $1 extra?|
|– Would you like to buy a set of AirPods with your iPhone?||Would you like to buy an iPhone with double the storage for another $200?|
Finding the right moment and place:
Let’s face this – if you’re hoping that your prospect is eager to listen to your sales pitch, you’re at loss. The best sales conversations are those where you are actually helping your prospect without actively pushing your brand/service. It’s a skill to manage and has lead to a number of bestsellers on how to crack it.
Cross-selling and upselling stay in those realms too, except that they are already familiar with you and your product/service to some extent. So, how to know when to actually pull the lever. The answer is – when your customer is through with his decision to do business with you. In simple words, your customer will barely notice your cross-selling or upselling recommendation if you place it at the beginning of their journey (and this is something that needs to be avoided).
However, if you place these products at the decisive placements like the shopping cart page, or somewhere close to the add to bag widget. Another interesting placement could be a product comparison or reviews page. In simple words, this means you should never let your cross-selling and upselling products to take the primary spot during the checkout process. The bottom line – offer a cross-sell or upsell when your customer opens their wallet to you.
How to Personalize Upselling and Cross-Selling?
Cross-selling and upselling, essentially, is helping the customer make the best decision. It could be helping them get more value out of their money, be more productive than before, or improve their profits. What the marketer needs to do is tell the customer – how they win? And this can’t be done merely by assuming what your customer wants. Personalization, here, let’s you listen to the customer and talk to them in a way they want. Here’re a couple of things you need to ensure while you implement your strategy:
- Know your customers and their needs: A good understanding of what your customers want or need is crucial to the success of your cross-selling and upselling strategy. A good starting point, in this case, would be to understand how your customers navigate your website i.e. visits to specific pages, time duration on visited pages, etc. Another way to get this information is to study your prospect’s conversation with your sales or customer support team. Doing so will tell which features are they most interested in and whether they have any additional requests. Moreover, customers, these days, are more than happy to share there personal data for better deals and offers.
- Build a response model: Instead of using a linear approach for recommending complementary products, prepare your systems to react dynamically as the prospect moves through the checkout journey. This response model needs to segment customers on the select variables deciding their propensity to respond to your cross-sell/upsell strategy. For example, users who have a history of purchasing big-ticket purchases can be shown a different variant of product bundles compared to those with smaller budgets.
- Build a repository of relevant recommendations: Your recommendation pool is not good enough if it doesn’t have an ample (read: not too many) numbers of options for the customer. The recommendations should be well-tuned to the effect of addressing well what the customer would want next and coming with just the right number of recommendations – not too less neither overwhelming. Giving too many options may put the customer in the decision paralysis and having too few will restrict choices. Remember that – this is not a ground for a sales pitch; you’re making a genuine recommendation to your customer.
- Make it financially reasonable: It’s a thumb rule that your upsells should not increase the cost by more than 25%. And, cross-sells should be at least 60% cheaper than the product added to the cart. Tune your cross-selling and upselling engines to these rules for a better success rate.
- Decide the contact strategy: Your prospects and customers, in all likelihood, will have a preferred method of communication. This needs to be accounted for when you are trying to cross-sell at a later stage. Ensure you’re reaching them on the right channel to make them aware of the offers and promotions. You can also look at what channel works better for a certain cohort in terms of response, goal completion and use that for your cross-selling communication.
Using the personalized approach to cross-sell and upsell across the customer journey not only helps in creating an incremental revenue boost but also results in customer loyalty and retention. Every additional sale coming from cross-selling or upselling makes an impact on a company’s bottom line and adds to its success. Using personalization, hence, doesn’t remain an option for these time-tested marketing techniques. They have become a must. And while you use personalization to optimize your cross-selling and upselling marketing strategy – make sure to remember that you’re doing so to help your customers make better decisions.