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As a B2B company, improving sales and delivering better customer experiences should be the focus to grow the business. While acquiring new customers and gaining new sales is a good way to increase revenue, you must understand that there is a better return on investment (ROI) when you cater to the needs of existing customers.
Statistics show that the probability of selling to an existing customer is 60%-70% while selling to a new customer is somewhere between 5% and 20%. It makes a lot more business sense to effectively target existing customers with sales techniques that benefit the business and the customer. The intent is to not only focus on the business goals but to improve the buying experience of customers.
Cross-selling and upselling are two effective sales strategies when used right can improve sales and enhance the customer experience. They can positively impact the purchase decisions of the buyer and improve customer retention and brand loyalty. Amazon, the multi-billion-dollar eCommerce giant was able to increase its revenue by 35% by implementing cross-selling and upselling techniques.
What is Cross-selling?
Cross-selling is a sales strategy to encourage customers to spend more money to buy more products related to what they’ve purchased or already shown interest in. For example, let us consider that you have an online B2B appliances store. A customer who plans to set up a café is looking to buy coffee machines from your store. You know that the customer has shown interest to buy coffee machines. You have the opportunity to provide more value to the customer by giving them the option to buy high-quality coffee beans along with coffee machines at a discounted price. This is how cross-selling works.
The more added value your extra products provide the customer and the more relevant they are, the better are your chances for an increased average order value. When you’ve done good research to identify the needs of your customers, you can give more personalized suggestions that will increase customer loyalty and strengthen relationships.
Cross-selling can happen when the customer is browsing the website and adding products to the cart. It can also happen after the sale via promotional emails and paid ad targeting. When you have better insight into your customers’ purchase history and decisions, you can target the cross-selling efforts to be more relevant and effective.
What is Upselling?
Upselling is the sales technique of encouraging customers to buy a better, more high-end product than the chosen one. This can be in the form of an upgraded product or selecting add-ons for the existing product. The goal is to increase the overall order value and customer loyalty.
Usually, buyers are inclined to get the best product that meets their needs while not spending beyond their budget. If you can offer them a better selection that has better features and is not very expensive, you have a good opportunity to upsell.
An example of upselling in B2B can be packaging materials. Instead of standard packaging supplies, you can offer eco-friendly and sustainable packaging that can allow your customers to set new delivery standards for their buyers and express their support for sustainability.
How to Cross-sell and Upsell Products?
A combination of cross-selling and upselling can be effective for your business and boost your overall sales. You can also improve customer retention and deliver better shopping experiences. Before you begin cross-selling and upselling products, you have to use the customer data available to make good recommendations.
The history of customer purchases and inquiries is essential data that is highly useful to uncover many cross-selling and up-selling opportunities.
While cross-selling can happen after a sale is made, upselling usually happens before the checkout process. The ideal pages for cross-selling opportunities in a B2B eCommerce store are product pages, checkout pages, and the thank-you page. You can also retarget customers with promotional emails and ad campaigns for cross-selling opportunities. Meanwhile, upselling can happen on the product page and checkout page.
Deciding if you want to cross-sell or upsell products is important as it can impact the customer experience. You can make your decisions based on the following factors:
- Product Relationship
Depending on the product you’re selling, it will make better sense to either cross-sell or upsell. For example, when you’re dealing with electronic goods such as smartphones, you have the ability to cross-sell screen protectors, phone cases, and headphones. Meanwhile, when you’re selling appliances, you can recommend a better model or upgrade for a slightly higher price.
Remember, customers are usually willing to pay up to 25% extra for upgrading to a better version. Anything above 25% and they may not be interested in the deal, even if it is really good.
When you’re recommending cross-selling or upselling, what is your end goal?
Do you want to increase the overall order value or want to also sell additional products that aren’t performing well?
When you want to sell additional products that aren’t selling well but complement the main product, you should prefer cross-selling. If you want to increase the overall order value, you can prefer upselling. However, the choice can vary on a case-by-case basis depending on various product categories.
Upselling is more difficult than cross-selling. This is because most customers know the product they want to buy and do not want to upgrade to an expensive version. However, they will be interested in adding additional products to the cart that complement the purchase.
You might have noticed Amazon cross-sell products under the “Frequently bought together” and “Customers who bought ‘this’ also bought ‘that’ sections. It is a highly powerful technique to improve overall order value and sell additional items to customers.
Cross-selling and upselling works when you know your customers and their needs. Start by segmenting your customers to identify the ones that are profitable for your business. Make it your priority to help your customers when cross-selling and upselling products. When you genuinely make the attempt to help customers, you get rewarded with more sales and revenue.
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