Catchy blog title isn’t it? And no, I didn’t write it just to get your attention. It’s absolutely true and relates specifically to our strategies for marketing to existing customers.

We’ve all seen those terrific cross-sell and up-sell opportunities on websites. From iTunes to JB HiFi and Coles, many of us find these tactics valuable to our everyday marketing activity. And there’s a good reason why. We’ve all heard it before – it’s easier to sell to an existing customer than attract brand new business. It’s true, but let’s get back to the specifics of tactics…

Cross and up-sell campaigns are everywhere online and they come in various forms. Here are some of the more common ones:

• “If you’re interested in this you might also consider XYZ” – the similar products recommendation style,
• “Other customers who bought this also bought (insert snazzy product name)” – The go-with products style, or
• “We have a special deal this week for (insert too good to resist offer)” – The hot-offer style.

It all sounds pretty easy doesn’t it? Watch what people are interested in and make an offer they can’t refuse. But few of us are carrying out highly sophisticated cross and up-sell marketing strategies because it typically takes a huge amount of time and effort to get it right. Matching the perfect offer to the right prospect in a good time is a complex task. And while personalised product recommendations are proven to consistently improve sales, conversion rates, overall average order value and customer retention, many of us don’t know where to start. So how do you maximise the opportunities out there without having to employ new staff or place enormous strain on your existing team?

Here’s a short summary of dos and donts for you to consider the next time you and your team decide to tackle the important (and very fruitful) audience that is your existing customer base.

Forget the spreadsheet!

Sadly, the most basic approach employed by many companies is to use the old spreadsheet to manage cross and up-sell opportunities. Unfortunately for the merchandiser or product manager this means they’re tasked with setting up the spreadsheet to manually highlight affinities between product purchases. This is a very time consuming process, especially if you have thousands of product SKUs. And even if you have a diligent process (and person) in place, the whole spreadsheet can be instantly out of date as products and stock levels change on a daily basis. This can make the whole process quite unbearable and ineffective so it naturally doesn’t get the attention it needs and quickly loses momentum.

Let the customer shape cross and up-sell opportunities, not the marketing staff

Don’t fall into the trap of relying on your in-house marketing team to decide product affinities. While you may think that you’re on the money with customer needs and wants you’re probably not, unless you have real-time analysis and information at your fingertips every day.

Your customers will prefer different products at different times. These choices will change frequently throughout their entire relationship with your business, so it’s next to impossible to extract relevant data about trends and purchasing preferences manually. Thus making accurate marketing decisions for cross and up-selling very difficult.

It’s also easy for data to be misinterpreted and inaccurate analysis drawn by different marketing professionals. One person may believe a recent spike in sales to be driven by the sudden cold weather, while another interprets the data to reflect an annual, seasonal spike at end of financial year. Human interference makes it hard to ensure your next campaign is based on the very real behaviour of your audience.

Make sure you’re on the money

If you can see which products are being viewed and bought together and by whom, then you can use this brilliant information to drive the various recommendation processes. More importantly, you can then automate this process so that changes in market and product preferences are documented on a daily basis quickly and accurately.

Finding opportunities to cross and up-sell to customers is really not that difficult. And it’s one of those rare cases whereby once you’ve taken on the new approach, you really can just sit back and watch the dollars roll in…

Valuable beyond your wildest dreams

Done properly, as part of an overall online marketing program, professionals executing smart cross and up-sell tactics can expect to see the following results:

• approximately 8% increase in sales for recommendations on the product page,
• 6% for recommendations in the shopping cart section,
• 3% on the order status page, and
• a whopping 8% by adding relevance to email campaign offers (as opposed to around 2.5% for a normal broadcast email).  

I might add that some businesses have seen an increase of 15% in cross-sell and up-sell success in their call centres, all because they’re using the very real behavioural data available online immediately.

This final point then brings me to the question of matching the right offer to the right prospect – but that is part of another story for later on.