When businesses try to find new ways of increasing their revenue and profits, they usually focus on marketing or direct sales and rarely consider cross-selling and upselling services. However, both cross-selling and upselling are two of the easiest and most effective ways to increase profits and grow your business. They can easily be provided by a professional call center, but even so, many businesses do not take advantage of this sales method.
What is Cross-Selling and Upselling?
Cross-selling and upselling are sales methods through which businesses can sell directly to their current customers. Traditionally, businesses advertise to people who are not their customers. They will either create marketing geared towards these people or even contact them directly through outbound calls. This sales method is aimed at creating more customers.
While this is the most common sales method, it’s also the least effective. Not only is traditional marketing very expensive, but it can have very low conversion rates. An advertising campaign may reach a large audience, but only a small percentage will be converted into paying customers.
Cross-selling and upselling, on the other hand, advertise directly to existing customers. By using these sales methods, companies can grow their business using only their current customer base. A call center can use cross-selling and upselling to make sales when speaking with your customers.
Difference between Cross-Selling and Upselling
While the two methods are similar, cross-selling and upselling are slightly different. Cross-selling is when an additional service or product is offered to a customer. For instance, if a customer is buying a computer from your business, you could cross-sell to them by offering a mouse pad or battery charger, possibly at a reduced rate. Cross-selling seeks to offer customers complementary services and products that they may like, based on their purchasing history.
With upselling, upgraded services or products are offered to customers. For instance, if a customer wants to buy a computer from your company, you can upsell a nicer, higher-end model to them. Upselling can also be used to get a customer to upgrade services or memberships.
Benefits of Cross-Selling and Upselling
There are many benefits to using cross-selling and upselling techniques.
Traditional sales and marketing are very expensive. On the other hand, upselling and cross-selling techniques are very affordable. It costs much less to sell to your own customers than it does to acquire new ones. These techniques can create sales for a much lower rate than traditional marketing. As well, call centers can bundle cross-selling and upselling with their regular support or other calling services, which provides more bang for your buck.
Increase Customer Retention
By creating more sales with your current customers, you can also increase customer retention rates. Customers who purchase more products or upgraded services are more likely to stay with your company while a customer with a one-time purchase may easily never buy again. You can convert one-time customers into repeat customers through these techniques.
Cross-selling and upselling are the best ways to grow revenue and profit. Because these techniques cost so little to implement and have such a high success rate, they can easily boost many companies’ profits by double digits. Statistics show that these sale methods are the most effective when it comes to growing a business.
Increase Average Order Value
One of the most significant benefits to upselling and cross-selling is that you increase the average order value. By upselling products to the customer that improve the product they’ve just chosen or cross-selling another product that fits well with what they’ve just purchased, you’re adding monetary value to the purchase.
What’s key to successfully upselling or cross-selling to a customer is to make sure they also feel like they’re winning. You don’t want a customer to walk away second-guessing their purchases. You want to upsell or cross-sell products that will actually improve the customer’s experience with that product. Once you’ve done that, customers will walk away satisfied.
Reduce Cost of Acquiring Customers
For any business, the cost of acquiring a new customer is always higher than retaining current ones. Why upselling and cross-selling are important factors in this mix is because they focus on optimizing the traffic that’s already coming to your site instead of looking for ways to create new traffic. Converting the customers that land on your site at a higher rate is more beneficial to your company in more ways than one, including saving you the cost of acquisition.
Helps to Promote Your Products
Marketing is an ongoing process for all businesses. Small businesses, in particular, are always looking for ways to promote their products, especially if they have a new offering. Upselling or cross-selling is one cost effective means of getting eyes on new products without having to market those products independently.
Helps with Developing New Products
What better way to get some early feedback on a product than through upselling? You can suggest new product in tandem with similar products at discounted rates to gauge the reaction of your customers. This is an effective form of cross-selling that promotes new products along with valuable insight from the customer.
As the leading provider of outsourced call center solutions, 3C Contact Services teaches its partners the necessary customer service skills needed to engage and retain customers. Call us today at 1-888-353-2335.