Whenever a customer purchases, or shows interest in purchasing a product from you, you gain the opportunity to offer them with either another product that complements their purchase (cross-selling; laptop bag for a laptop purchase) or a more expensive version of the same product, which may have more available features and services (up-selling; a laptop with a larger storage capacity).
However, cross-selling and up-selling are easier said than done.
A big challenge to effective cross-selling and up-selling is that if it isn’t positioned and timed well, it could be seen as spamming for sales and can frustrate the customer, and it eventually leads them to break ties with the organization for good.
For this reason, it is important to plan and strategize beforehand, so that the customer’s needs are fulfilled when they want to, and not when the organization needs to. The advantages of using such a targeting technique are twofold – it provides value to the customer and meets their needs, along with boosting sales for the organization and creating loyal customers who completely trust them.
That being said, how do organizations then track what the customer needs and when they need it? This is where a CRM software tool comes in handy.
Recognizing the context:
To get a glimpse of a customer’s motivations and requirements, a company can track and record how that customer interacts with them. Are they visiting the website directly? Are they responding to an ad e-mail? What page did they spend the most time on? What items did they purchase? All bits of information, no matter how small, are recorded onto a common CRM database and helps the company to understand the customer’s needs and personalize suggestions based on their personal details, allowing more effective cross-selling and/or up-selling.
Creating a relationship:
Once the customer analysis is completed, the company can now prepare to provide relevant products based on that data. For example, if a customer has displayed interest in home improvement and has purchased a ball peen hammer, the company can send out scheduled e-mails or even call them and suggest purchasing power tools or a more robust hammer for better functionality.
This makes the customer believe that the company is looking out for them and not simply stuck on pushing sales. If done right, it boosts customer loyalty and satisfaction considerably and paves a way for repeat business or referrals.
Targeting larger audiences:
Apart from focusing on individual customers, a company can also run marketing campaigns for specific customer segments in parallel. These segments can be constructed on the basis of product type, purchasing power, customer location, etc. For example, suggesting sweaters to people in warmer climates, or high-end personal care products to budget-conscious customers will generally be fruitless since they are not relevant to that customer base.
Analyzing data obtained in the CRM database allows for quicker and effective segmenting, which is instrumental for the success of a campaign since targeting the right product to the wrong crowd will lower customer satisfaction and in turn, customer retention.