Alexa Ramp UP Up-Selling and Cross-Selling With CRM Software- ConvergeHub

Ramp UP Up-Selling and Cross-Selling With CRM Software

CRM | by Steve Conway
best crm for upselling crossselling

When your customer makes the first purchase from you, you don’t want her to stop there. You would like her to make more purchases, buy more valuable products. In short, you want to up-sell and cross-sell. In whatever business you’re in, cross-selling and up-selling work brilliantly to drive sales and profitability.

In this blog post, we’ll cover-

  1. What is cross-selling and why it’s important?
  2. What is up-selling and why it’s important?
  3. What is the difference between up-selling and cross-selling?
  4. When cross-selling and up-selling work and when they don’t?
  5. How to leverage CRM for cross-selling and up-selling?

And a bonus tip!

If you have not tried up-selling and cross-selling or haven’t had much success with it before then this article is for you. By putting some of the advice discussed in this article into practice, you can really drive more sales, higher revenues, and repeat business.

What cross-selling means…

Cross-selling means selling a different product or service to a customer to increase the value of the sale. When you’re asked if you would like to have fries or a beverage with your burger in a fast-food joint, it is cross-selling. The idea behind cross-selling is to encourage a customer to buy more or spend more than what he would have initially bought or spent.

It is always better to recommend related products or services to the customer while cross-selling so as to keep him focussed on the original sale. So, if a customer buys a bed from you then recommend him mattresses, bedsheets, and pillows, etc. Things which he would need along with the bed.

What up-selling means…

Up-selling means selling a higher-priced alternative product or service to a customer to increase the value of the sale. When you’re asked if you would like to buy a bigger size burger or a combo meal, it is up-selling in action.

Cross-selling and up-selling differences…

Many people get confused between up-selling and cross-selling. In sales and marketing parlance, the two terms are also interchangeably used by many professionals, but they have different meanings. Check the graphic below to understand the difference between cross-selling and up-selling-

what is upselling and cross selling

Image Source- sketchbubble.com

Cross-selling relates to selling more related products or services in addition to the product or service initially selected by the customer whereas up-selling relates to selling a higher value alternative to the product or service initially selected by the customer. In up-selling, you’re selling an expensive item whereas in cross-selling you’re selling more items to the customer. Both techniques help you in increasing the basket or cart value of the customer.

Now that we’ve understood what cross-selling and up-selling means and the difference between the two, let’s move on to the most important part- Why should you cross-sell and up-sell?

Benefits of cross-selling and up-selling

why upselling & crossselling is important

Image Source- adamenfroy.com

While there are many benefits as listed in the above graphic, the key benefits of up-selling and cross-selling includes-

  1. Drive sales and profits by selling more per customer- When you sell more products or services to customers you save on transaction costs, time and efforts. Considering how expensive it is to get a customer, it is better to sell him more than spend money finding another. As the odds of selling to an existing customer are 60-70% and the odds to a new customer are 5-20%, investing your resources in selling to existing customers is more beneficial.
  2. Drive customer lifetime value- If you’re wondering what customer lifetime value means then it is the total amount of money a customer would spend in your business during her lifetime. For example, the CLV of a car buyer can be as high as $100,000 if they buy 3-4 cars in their lifetime. The CLV of a coffee drinker at Starbucks might be even higher depending on the number of cups they purchase in a day. By up-selling and cross-selling, you are increasing the CLV of a customer every time they purchase from you.
  3. Eliminating the competition- Let’s go back to the bed and mattress example we discussed in the cross-selling section above. Now, the customer buys the bed, and you don’t recommend mattresses or pillows. He pays for the bed and the sale ends. The next day or a few weeks later, he feels the need to buy a mattress and pillows. What are the chances that he will come to your store? What if he sees an ad from your competitor and decides to go there? By cross-selling, you are killing the competition then and there without your competitor knowing about it.
  4. Build stronger customer relationships- Bad selling can irritate a customer, good selling impresses her. What is good selling? Good selling is consultative where your sales rep plays the role of advisor. He is not selling, he is solving a customer’s problem by recommending him the right product. Your rep is not only thinking of the immediate needs of the customer but also her future needs. Good selling is the foundation for stronger customer relationships. People want to buy from companies they can trust with solving their problems.

Ready to up-sell and cross-sell? But what next? How should you do it? Yes, this brings us to our execution part. How to up-sell and cross-sell? Let’s dive into it-

When cross-selling and up-selling work and when they don’t…

Here’s a table that explains when up-selling and cross-selling work and when it leads to failure-

upselling-crossselling-success-factors

Image Source- Amnesty.com

  1. When you upsell, ensure the product or service you recommend caters to the exact needs of your customer and then does more. For example, if a customer is looking for a mobile phone, upselling a Tablet phone doesn’t work.
  2. The prices of your recommended products are important. When cross-selling, recommend products that are much below the price of the main purchase. While up-selling, keep the price difference between the customer’s chosen product and your recommended product to a reasonable level. You can’t sell a Jaguar car to a customer looking for a Ford or Honda. But you can surely sell a higher version of Honda or Ford to him.

Up-selling and cross-selling using a CRM…

Upselling and cross-selling can happen in various ways. In a physical sales engagement, say in a retail store, your Sales rep can personally cross-sell and up-sell during the purchase cycle. But what if you are selling your services online or want to up-sell and cross-sell to customers who have purchased from you in the past. Here’s how you can use CRM software to automate your up-selling and cross-selling efforts-

  • Segment your audience- Customer segmentation based on Customer Lifetime Value (CLV) will help you identify the customers with potential for up-selling and cross-selling. This will also help you identify the least profitable customers and help you better allocate your resources towards those customers who are more likely to respond to your up-selling or cross-selling recommendations. A good customer relationship management software will help you easily and quickly segment your customers.
  • Map products & services to each segment- Once you’ve defined your customer segments, review your products and services portfolio, identify and map relevant products to your segments. Your CRM must-have information on the past buying history of your customers. Now based on that information, you can create custom lists to run targeted campaigns to specific customer segments.
  • Identify the best time to up-sell and cross-sell- It is important to give correct advice but equally important is to do it at the right time. Up-selling or cross-selling to a customer who has called you to register a complaint about a faulty product or delay in service delivery will lead to customer dissatisfaction. So, identify the moments when you want to up-sell or cross-sell.
  • Personalize the experience- Yes, no mass messaging please! Sophisticated CRMs and other associated technologies today allow businesses like you to personalize the entire experience and make 1-to-1 selling. You can personalize the experience by tying up your up-selling and cross-selling messaging with the past purchase of the customer or with his last engagement with your brands such as using a free trial, visit the website, or a call to customer support. A CRM can help you personalize your message by making use of the past purchase data of the customer.
  • Incentivize sales teams & customer support- While upselling and cross-selling through emails and other digital modes is important but don’t miss out on live customer engagements. Your sales reps and customer support executives can spot up-sell and cross-sell opportunities while interacting with customers. All they would need is access to customer data available in the CRM. But remember that all customer support engagements are not sales opportunities. Keep these two rules in mind-
  1. Never up-sell or cross-sell to an angry customer. First, solve his problem.
  2. Only sell when there’s an opportunity. Don’t push.

And here comes the bonus tip!

Invest in a Customer Lifecycle Management Software. It will help you up-sell and cross-sell better and solve many of your business worries.

Yeah, you got it right, we’re up-selling here 🙂

ConvergeHub, our Customer Lifecycle Management Software is more than a CRM. It does what the best CRM software does and plenty more. Our software helps you manage your entire business including Sales, Marketing, Customer Support, and Billing, all from one single platform. With ConvergeHub-

  1. You can empower your sales teams to automate their tasks and convert leads better and faster.
  2. Your Marketing team can automate many of its tasks, harness customer data to run precision campaigns.
  3. Your Customer Support team will have all the customer data to personalize the engagement and also up-sell/cross-sell when there’s an opportunity.
  4. You can automate billing tasks like invoice generation, payment follow ups and reminders etc.
  5. You can get a complete view of your business operations to better manage it.

ConvergeHub is a piece of excellent up-selling advice that checks all the essentials- Needs, Features, Pricing, and Value.

And we offer a 14-day free trial. No credit card needed. Try it for free here and check yourself!

Check various features of ConvergeHub here.
For pricing, click here.

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