Upselling and cross selling are something like the holy grail of customer success.
Because existing customers are the easiest, most valuable customer to sell to.
In fact, you have a 60-70% better chance to sell to an existing customer, compared to the 5-20% chance of selling to a new prospect.
Not only is upselling easier, as compared to lead generation, it costs less to sell to a customer who already knows and trusts your brand. And, with the right customer data it’s a natural process. Upselling and cross selling are ultimately about making an offer that's appropriate for where the customer is at that time. The secret to this is knowing your customer better.
In this post we show you how you can leverage your customer data platform to find better upselling and cross selling opportunities.
What is upselling and cross selling?
Upselling is a sales strategy that encourages customers to buy a higher-end or upgraded version of a product than what they originally intended to purchase. Let’s say you want to buy a mobile phone with 32GB storage space and the sales person shows you a model with 64 GB comparing them side by side pointing out the benefits of more storage.
Cross selling is the practice of offering related or additional products to compliment an existing purchase. So you bought the mobile phone and now the sales person suggests you buy screen protectors for that model. That’s cross selling.
Both upselling and cross selling are great ways of increasing customer loyalty and deepening customer relationships which can effectively improve customer retention and customer lifetime value.
If you want to do upselling and cross selling right, you must utilise your existing customer data to offer appropriate additional and upgraded products to the right customers.
How data helps you understand what your customers want
Building an upsell strategy without data is just guesswork. Data is what makes the picture come alive and really let’s you get into your customer’s head. The more you know about your customer, the better the offers you can provide and the bigger the value for your company.
Use data to zoom in on the customer and use machine learning to actively listen and better understand their intent and predict their behaviour. Benemen combines customer data platforms with intelligent voice cloud solutions that help you better understand your customers and start upselling in real time.
Example: LähiTapiola boosts sales by 7% with intelligent contact routing
Insurance company LähiTapiola implemented BeneCloud, a cloud service solution that effectively uses analytics to route incoming calls to the correct place. Intelligent routing enables the routing of the calls to the correct customer service agent, for example when they are meant to be directed to the sales organization.
Chief Financial Officer Sakari Pehkonen states that the information collected from the calls not only enabled significant streamlining of operations but also led to an increase in average sales of 7%, a total of around 600,000€ per year.
Read the full case study here: Significant benefits with Benemen cloud service
How to increase sales using machine learning
The data you collect in your customer data platform tells you a lot about your customers like their age, location, buying history and enables customer segmentation to create better offers. These options are a great foundation but machine learning algorithms can really supercharge your product upsell and cross sell and improve your offer personalization.
With a little help from machine learning you can move away from generic upsell and cross sell to a personalised approach. Thanks to analytical insights and data driven recommendations you will be able to give your customers the right offers at the right time.
This is a great way to maximize an existing customer’s share of wallet by strategically introducing products and services to generate as much revenue as possible from each customer.
Let’s look at 5 ways you can use your customer data platform to find better upselling and cross selling opportunities:
Discover upsell opportunities with customer journey analytics
Customer journey analytics is a powerful solution that can help you find cross sell and upsell opportunities. It gives you a detailed, data-backed view of how your customers interact with your brand and how you can improve their experience by offering them upgraded products and services.
A customer journey analytics platform can help you identify indicators of customers who are more likely to convert to an upsell offer. Only a full view of the real end-to-end customer journey gives you a complete picture of the customer’s likes, interests, behaviour and sentiment—all of which are important to present the best offer at the right time through the right channel.
For example, a leading hotel and resort company wanted to identify which customers are likely to convert to upsell offers—like upgrading from a standard room to a superior room. Their analytics team leveraged a customer journey analytics platform and found out that adding a loyalty program point bonus increased their upsell rate from 9% to 23% compared to their standard dining and spa packages.
Based on a variety of customer attributes the marketing team set up a trigger, so that future customers with the same behaviour will automatically be presented with the best upsell offer for them when they book a room.
Leverage omnichannel customer view to maximize upsell and cross sell potential
A true 360-degree customer view across all touchpoints and devices is a win-win situation: your customers benefit from better service and personalized recommendations and your business drives improved loyalty and more repeat business from established customers.
Benenem helps you leverage your CRM of choice for a unified 360-degree customer view. This data can be extremely important, for example so you don’t mistake three separate device interactions with three different customers.
Insight and context into how a customer has interacted with your business online can give the contact center valuable information about their needs and interests—valuable information that can be used for highly targeted upselling and cross-selling.
A customer might be calling today because she is having problems with a bank transfer. But the last four times she visited the bank’s website she has been looking at different lines of credit. With insight into her online behaviour, the contact center agent has the perfect opportunity to present her with a compelling offer.
Use behavioural segmentation data for product recommendations
Upselling is smart selling: knowing how the customer’s product usage has changed over time, how customers migrate between products and which factors caused change in customer behaviour are all valuable in developing upselling and cross selling strategies.
Traditional approaches to customer segmentation based on geographical and demographic attributes are essential to knowing who your customers are. Knowing who your customers are, how old they are and where they live is great, but knowing how they behave is even better—that’s why leveraging behavioural data is extremely important.
Behavioural segmentation is based on behaviour patterns that your customers show as they interact with your brand and make a purchasing decision. It allows you to divide customers into segments according to their attitude, sentiment and response, like customer loyalty or engagement, to a product or service that you offer them.
Identifying customer segments will help you understand how to address the particular needs or desires of a group of customers, discover better upsell and cross sell opportunities, optimize the customer experience and even quantify their potential value for your business. The more personal your offer the greater the chance it will hit home and convince them to purchase or upgrade.
Leverage predictive analytics to make personalised product recommendations
What if you couldn’t just segment customers based on their past behaviour but also predict your customers’ future purchasing behaviour? This is where predictive analytics comes in—something like your cross selling crystal ball. This concept has become a familiar part of the online shopping experience, think Amazon’s ‘recommended for you’ product recommendations.
By analysing what your customers have previously looked at, you can gain insights to predict future buying behaviour. More than that, data can also include products and services that are commonly purchased and used in conjunction with one another. This information is extremely valuable if you are planning to create product and pricing bundles.
Predictive analytics can forecast which customers have the highest chance of purchasing an upsell or cross sell offer. For each customer you can gain insight into why they would purchase which can give you suggestions for the best way to market to them or who to market to.
For predictive analytics to be successful you have to identify exactly what you want to know and consider if you have the data to answer these questions. Is your customer data platform capturing the needed data and is that enough to learn any predictive patterns? If you use the insights and predictions to act on them, predictive analytics can lead to powerful business outcomes—including optimising your marketing and meeting customer demand.
Upsell and cross sell in real time
To boost upsell and cross sell efforts many ecommerce brands personalize their websites for specific customers and present targeted offers in real time. To do that you can leverage real time clickstream data from your customer data platform that tells you what products the customer has clicked on, including information about the price range, categories and ratings.
For example, the real time data from clickstreams shows that a visitor clicked on rental cars in the 60 to 80 € price range. That real time data is compared to historical customer data which reveals that the customer usually rents cars around the 70 € mark and prefers larger models like estate cars or premium saloons.
In real time, the car rental site then shows her options that meet historical criteria, plus the upsell offer: a 90 € full-size premium estate car.
To improve the performance of upsell and cross sell campaigns you should be able to make the most relevant offer to the most potentially profitable person at the most appropriate time—leveraging real time data from your customer data platform allows you to do just that.
Example: Pohjantähti is utilising real time customer data to build trust and increase upsell opportunities
Pohjantähti Mutual Insurance Company is able to serve customers better based on intelligent routing and real time customer data utilising CRM. This personalised approach establishes trust and leads to the customers being more open and willing to listen when the customer service agents offers upgraded or additional services.
Watch the full webinar here: Case Pohjantähti: A human-sized customer experience
3 brilliant upselling and cross selling examples - and how you can hack them today
1. Airtable tempts users to go bigger with an upgrade email
Unless your customers are actively thinking about upgrading it’s unlikely for them to visit your page with pricing plans to learn about higher tier features. The team collaboration platform Airtable takes advantage of emails as a touch point to educate users about the benefits of an upgrade.
Use enticing upsell emails to break down some of your product’s premium features and provide tips for users to get the most out of them.
2. Spotify triggers fear of missing out by comparing plans
Music streaming provider Spotify shows us an effective way to make one offer look preferable over the other. The site lists six features of its Premium account, five of which are greyed out in the free list. This triggers fear of missing out, a technique that is psychologically proven to help make more sales.
Let your customers compare two options side by side and show them everything they would be missing by choosing the free or cheaper plan.
3. Heroku offers free add-ons to build trust
Heroku, a Salesforce cloud platform that’s used for app development sends emails to their users promoting free add-ons. The fact that most of these add-ons are totally free makes it an interesting example of cross-selling. While it doesn’t directly promote additional sales it provides value for the customers and encourages them to engage with the brand and product more.
Cross-selling free add ons or services can help you drive customer interaction and build trust with your brand.
Upselling and cross selling are two of the most profitable tactics of selling to your current customer base. Tapping into data from your customer data platform plays a key role in informing your strategy: create perfectly targeted offers by leveraging a 360-degree customer view, building segments and making predictions. Thanks to these analytical insights you will be able to give the right customers the right upsell and cross sell offers at the right time.