Ever wonder how some businesses leap from average to exceptional performance? According to Ottawa-based sales guru Colleen Francis1, those businesses see their sales closures climb from 25% to 33%. But here's the kicker: while new customer acquisition might plateau, their customer retention rates soar up to 95%. This means that focusing on retaining and nurturing existing customers can be far more profitable than constantly chasing new ones.
Two Untapped Goldmines
Let’s talk about two powerful strategies that go beyond after-sales service and relationship building with new customers: cross-selling and upselling. These techniques are not just buzzwords; they’re goldmines for improving customer retention and driving profitability. Colin Shaw2, a thought leader in customer experience, highlights a striking fact: you have a 60-70% chance of closing a sale with an existing customer, compared to just 5-20% with a new prospect.
Despite this, a survey by BAO Inc.3 found that only 18% of marketers use account-based marketing (ABM) for better customer engagement, even though 74% of them aim to increase marketing ROI. It’s clear that cross-selling and upselling aren’t getting the attention they deserve. But they should.
Four Powerful Levers
Here’s why cross-selling and upselling are game-changers:
1. You Know Your Customer
Adam Ramshaw from Genroe4 points out that you already have valuable CRM and behavioral data on your existing customers. Plus, you save on the high acquisition costs associated with new customers.
2. Established Trust
Your customers have already tried, tested, and liked your product or service. They trust your brand, making it easier to introduce them to additional offerings.
3. Loyalty Leads to More Sales
As Ian Hirst from Greenbank says5, it’s tough to replace a company that’s become part of the client’s DNA. This loyalty makes it easier to discuss new services and products.
4. Referrals
Happy customers are four times more likely to refer new business your way than new customers, according to content marketing expert Aaron Orendorff, citing Temkin Group’s ROI of Customer Experience, 2016 report6. This kind of customer marketing is incredibly sweet.
Four Keys to Success
Here are four strategies to excel in cross-selling and upselling:
1. Know Your Customers
Lee Polevoi7 emphasizes the importance of talking to your customers. Understand what additional purchases could complement their current ones and help them achieve their goals. Clearly spell out the benefits, and watch your revenue grow.
2. Target the Right Customers
Not every customer is profitable. Harvard Business Review contributors Dr. Denish Shah and Dr. V. Kumar8 warn against cross-selling to “service demanders,” “revenue reversers,” “promotion maximizers,” and “spending limiters.” Focus on those who bring genuine value to your business.
3. Provide Valuable Content
Marketo9 suggests offering informational, educational content. The more value and the less salesy it is, the better. Serious customers will research and find answers to their questions, leading to higher conversion rates. Use sales enablement tools to develop and track this content.
4. Engage Authentically
Use automation tools to pick up behavioral cues, and leverage CRM and analytics data to predict customer needs. But remember, digital tools should enhance, not replace, personal and authentic interactions with your customers.
In the end, cross-selling and upselling are about building deeper relationships and fostering loyalty. Who wouldn’t want that?
Transform Your Sales with Cross-Selling and Upselling
Mastering the art of cross-selling and upselling can transform your customer relationships and significantly boost your profits. Ultimately, these techniques create a dynamic environment where customers see added value, and your business experiences sustained profitability and growth. Embrace these techniques to unlock hidden profits and elevate your business to new heights.
References:
https://www.engageselling.com/blog/article-path-of-least-resistance
http://terminus.com/terminal/customer-marketing-abm/
https://www.genroe.com/blog/cross-selling-the-why-and-how-for-successful-companies/158
http://www.greenbankltd.com/the-challenges-and-solutions-for-effective-cross-selling-2/#.WeTuh7h-
https://postfunnel.com/measuring-customer-retention/
https://quickbooks.intuit.com/r/marketing/6-tips-for-successful-small-business-cross-selling/
