COVID-19 has created unprecedented uncertainty. No doubt your organisation has been figuring out how to protect and increase revenues sustainably rather than just cutting costs, as well as the best strategy to sustain momentum in the new normal.
As a result upselling and cross-selling is about to get a whole lot more important for your business. I’m betting that as the world settles back into the new normal, the most important calls you’ll make will be to your existing customers. Why?
Because selling to existing customers has always been one of the most effective, and easiest, ways to increase your revenue and profitability. Indeed countless studies and statistics have been produced over the years that demonstrate that it’s much more cost-effective to generate revenue by increasing sales to existing customers than it is to go out and find new ones. This will be crucial as business picks up in the months ahead:
It’s more cost effective too. Hubspot estimates that it is 5-25x more expensive to acquire new customers than it is to grow existing customers.
So, cultivating your current customer base through upselling and cross-selling will perhaps offer the truest opportunity to drive efficient and sustainable long-term B2B sales success in the post-COVID-19 world.
Of course, I’m not suggesting that sales teams can sit back and leave new business generation on the back burner. But I do believe that it a world of uncertainty, it has never been more important to keep that loyal band of customers happy and at the same time realise long term customer value by developing effective upsell and cross-sell strategies.
Benefits for your business:
- Builds customer equity
- Drives differentiation and enhances market position
- Promotes innovation
- Balances growth between new and existing customers
- Enhances customer profitability
- Discourages churn and improves customer loyalty
Benefits for your customer:
- Enhances long term value of association
- Broadens choice of product and services
- Offers convenience and flexibility
- Increases customer satisfaction
- Lowers price or improves ROI of services/products
- Improves customer service
The first step is to understand exactly what the terms upsell and cross-sell mean, and to know the difference:
Definition of upselling:
Upselling is a sales technique where a seller induces the customer to purchase more expensive items, upgrades or other add-ons, in an attempt to make a more profitable sale. While it usually involves marketing more profitable services or products, it can be simply exposing the customer to other options that were perhaps not considered previously. Think “would you like to make that a large meal for 30p extra?”
Definition of cross-selling:
Cross-selling is the action or practice of selling an additional product or service to an existing customer. The objective of cross-selling can be either to increase the income derived from the client, or to protect the relationship. The process of cross-selling can be varied. Unlike the acquisition of new business, cross-selling involves an element of risk that existing relationships with the client could be disrupted. For that reason, it is important to ensure that the additional product or service being sold to the client or clients enhances the value they get from the organisation. Think “would you like fries and a drink with your burger?”
Upselling vs Cross-selling
It’s important to note that we’re not talking an either/or approach here – they are both core components of a customer-centric B2B sales strategy. Whilst certain scenarios with customers can call for one approach over the other, upselling and cross-selling are often used interchangeably. The most successful B2B sellers usually combine cross-selling and upselling techniques to increase revenue.
What’s ultimately important is that you’re making the right approach, for the right customer – whether that be solving a problem or delivering boosted success for their business. The trick to knowing which is the right technique in order to achieve the best results is to know your customer – to ensure that the solution you’re offering is relevant, timely and delivers value.
Tips for successful upselling and cross-selling
Successful upselling and cross-selling is based on a deep understanding your customers’ needs. True understanding comes from doing your research. It is not enough to simply go on what you know about their company (firmographic data) or your past experiences with them (CRM data) – the world is changing fast and your customer’s needs are changing fast, therefore you need to pull this together with up-to-date insights and sentiments (qualitative data) in order to really understand what matters most in their world.
This means keeping your intelligence fresh. Technological solutions that utilise advanced analytics, machine learning and natural language processing can dig deeper into structured and unstructured data sets than you could do manually.
These solutions will pull out the actionable intelligence and insights of greatest value i.e. those that improve real-time understanding of the customer and what’s driving them at any given moment, which can make a big difference to upselling and cross-selling success.
Nothing will turn a customer off quicker than offering them irrelevant products or services, especially while they are grappling with their own COVID19 related challenges. For an upsell or cross-sell strategy to succeed you must deliver the highest degree of relevancy possible – if I am buying a burger I may want to upgrade or ‘go large’, and I may want to add fries or a drink, but what I don’t want is to buy flowers with it!
Any upsell or cross-sell must be relevant to the customer need, and it should augment or improve their business and their relationship with yours. True contextual relevance comes from having the power to determine in advance what a customer needs, and what product or service will have the greatest impact.
Prediction is a key B2B sales skill, and AI modelling, predictive analytics and machine learning are making life easier by helping to identify patterns of event types, market challenges and new opportunities even amongst the longest term and best understood customers. Offering the opportunity to not only predict need, analyse what offer will have the greatest impact, and even the most likely response.
The result – improved relevance and enhanced probability of success of any upsell or cross-sell approach.
Product and Service Relevance
Offering the wrong product or service can be just as damaging to a customer relationship as offering something they don’t need. B2B sellers need to know their products or services intimately, including how an enhanced or new product service will make a difference to the customer.
To truly understand the impact of a product or service, and why a customer needs it, requires insight. How they currently use your products and or services, which features are adding value, and which aren’t? How they are using other products or services, how yours compares to others in the market, and any gaps that can be filled?
You also need to garner insight into how the customer will use a new or upgraded product or service, how they will likely interact with it, in what circumstances, and how frequently. A proactive, insight-driven upsell or cross-sell approach means knowing your products inside out, and being able to demonstrate their value with a great degree of confidence.
Just as with contextual relevance, utilising advanced analytics, modelling, and machine learning can enhance product relevance and therefore the likely success of any sale.
Boost the chances of upsell or cross-sell success by using what you know about the customer to get in touch at the optimal time.
That could mean at the point of purchase when they are already in “buying mode”, in-app when they realise they have a need, during customer support interactions when they could benefit from an upsell, or when they are celebrating success such as a winning a deal or an award.
Imagine if you will that you are a sales person working for a technology company selling a particular kind of software product or service. You will almost certainly have some specific trigger events that, if you find them, suggest that a customer may be ripe for an upsell or cross-sell approach.
For example, maybe one of your entry-level customer’s is hit by a cyber-attack – and upsell of solutions that boost resilience would be appropriate or perhaps offering an upgraded security package.
The combination of big-data and AI offers the opportunity to analyse and curate relevant content from millions of sources in real-time, and deliver usable insights and triggers to your fingertips at exactly the moment you need them, which more importantly should be the exact moment it is most likely a customer would gratefully receive guidance and solutions.
When it comes to upselling and cross-selling the rule of value exchange is one you ignore at your peril.
Upselling isn’t a sales tactic where you win and the customer loses. It’s a customer success tactic that can help you to build deeper relationships with customers where both you and your customer benefit. The customer gets more value and excellent customer experience. You get more revenue and better customer retention rates, through being honest and genuinely interested in helping your customer to achieve success.
Always demonstrate how you are in service to your customers and why you are someone they should trust and value in return for their business; that you ultimately have shared goals from any upsell or cross-sell recommendation.
If your customers cannot relate to you or work out why what you are offering is of benefit to them (not just your bottom line), then you could quickly find the door being shut in your face.
How can Artesian help you to upsell and cross-sell in the most, relevant, timely and value-driven way possible?
At Artesian were huge believers in retaining and growing current customers. In the thrill of bringing a new customer into the fold, it is often forgotten that nurturing existing customers offers the truest opportunity to drive efficient and sustainable long-term success.
But you need to keep those loyal customer happy if you’re to recover from the impact of COVID-19. Nurturing relationships and upselling or cross-selling to existing clients is the key to sales efficiency and profitability in 2020.
If you’re a business leader then teaching your sales teams about the benefits of upselling and cross-selling, and importantly providing them with the tools to do it with confidence, relevance, pin-point timing and undisputable value, will make a significant contribution to overall income and profitability.
Artesian provides automated intelligence on the customers that matter to you.
We provide the insight, prioritised by relevancy to cut research time, spot new opportunities and manage risks within your customer base.
Even when working remotely Artesian keeps sales teams with a personal AI “Insight Agent” that constantly monitors customer data to provide the actionable insights and relevant news triggers they need to drive your upselling and cross-selling strategy.