Did you know that it costs a business five times more to acquire new customers than it does to keep current ones? This finding from Forrester is particularly important to organizations since the onset of the pandemic. With budgets tightening for B2B and B2C purchasers around the globe, customer retention is critical.
While there are many facets to customer retention, one important contributing factor is how invested a customer is in your business. Do they just use one product? Or do they use a broad range of your services? The more invested they are, the stickier they are as a customer. Cross-selling and upselling campaigns are a great way to achieve this stickiness.
And yet, in our recent customer benchmarking survey, The State of Marketing in Microsoft Dynamics Today, there were some surprising results related to cross-selling and upselling marketing efforts. When asked about the effectiveness of different types of email marketing messages, 49 percent of respondents said that they do not use cross-sell/upsell emails. It is worth noting too that of the marketing tactics included in the survey, email marketing was ranked the most impactful.
Similarly, when asked about the types of automated campaigns, 62 percent of respondents said that they do not use cross-sell/upsell campaigns – despite the fact that 76 percent indicated that campaign automation is an effective tactic.
To us, these findings demonstrate a significant untapped opportunity for marketers. Here are some tips for seizing that opportunity with effective cross-sell and upsell campaigns:
1. Be relevant. There is one word that marketers should keep in mind when it comes to cross-selling and upselling to customers – relevance. To make your cross-sell and upsell campaigns feel more like customer service and less like a sale, you should offer customers products and services that are relevant to their previous purchases. Cross-selling and upselling are important touchpoints in the customer experience and should be treated as such.
2. Consider timing. Upselling involves selling customers more expensive products, services or add-ons to increase a sale, while cross-selling involves selling customers complementary products or services to their existing purchases. Given these differences, consider the timing of when each approach might be well-received by customers for an email or nurture campaign to be most successful. For example, if a group of customers has an approaching contract renewal, it would be a good time to add them to a campaign that educates them on why they should upgrade to a more premium offering when they renew. Similarly, an email that promotes the benefit of an additional complementary product could also be effective for renewing customers. Look for the opportunities when purchasing something new from your business might feel most welcomed and natural.
3. Keep it simple. Whether you are creating a cross-selling or upselling campaign, simplicity is essential. While you may have a long list of potential upgraded, new or different offerings to propose to your customers, you also don’t want to overwhelm them. Focus on one really solid, well-thought-out offer rather than trying to present customers a menu of every possible available option. Think of your cross-selling and upselling campaigns and emails as you would a landing page; everything needs to drive towards one call to action.
4. Demonstrate value. What’s in it for me? As consumers, we all want to know the answer to this question. So, be sure to spell it out for your customers. How will what you’re promoting to them in your cross-selling and upselling emails or campaigns make their lives or jobs easier or better? Work to address challenges or pain points you know they have, which can often be easier to achieve with existing customers than with prospects.
5. Offer a promotion or perks. Limited time offers, free trials and special discounts can all be very effective when used in cross-sell and upsell campaigns or emails. For example, going back to our earlier contract renewal example, if you gave customers an opportunity to upgrade to a more premium offering at a discounted price, the discount becomes one more benefit you can utilize in your efforts to secure the upgrade. Depending on what your business sells and your buying cycle, introducing customer loyalty perks as part of a cross-sell or upsell effort can be an effective way to encourage both present and future purchases.