Gone are the days when salespeople were the only ones closing deals.
Customer success managers (CSMs) already play a huge role influencing company revenue and customer retention by the work they do to help customers. But they can go one step further by making sales themselves: cross-sells and upsells, that is.
Cross-selling and upselling are strategies to earn more revenue from existing customers. So, it's not the same kind of selling that brings to mind cold-calling and prospecting, but that doesn't make it less impactful. Why?
Because driving revenue by retaining existing customers is the name of the customer success game -- and strategies that can drive even more revenue -- like cross-selling and upselling -- have huge ROI.
Existing customers are easier to sell to -- by a long shot: You're 60-70% likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect. So if your company isn't cross-selling and upselling, you're just leaving money on the table.
And CSMs are in a great position to cross-sell and upsell successfully -- because they already have the inside scoop on the customer. The key to successful cross-selling and upselling is making an offer that's appropriate for where the customer is at that time -- and CSMs with a pulse on the customer -- like what products and services they're using and what they still need to achieve their goals.
In this guide, we'll deep-dive into everything about cross-selling and upselling: what it is, how to do it, and when to do it.
What is cross-selling?
Cross-selling is encouraging the purchase of anything in conjunction with the primary product. For example, if a customer has already purchased a subscription to your marketing tool, cross-selling would encourage that customer to purchase a subscription to your CRM.
"Do you want fries with that?"
Believe it or not, you may have experienced cross-selling on your last trip to get a cheeseburger (or veggie burger).
Cross-selling is encouraging the purchase of anything in conjunction with the primary product. So in this example, if the primary product you were buying was a burger, and your server asked if you wanted French fries as well, that would be cross-selling you a complementary product alongside your original purchase.
For a real-world example, explaining to a customer that they can also purchase a printer alongside their new computer would be cross-selling. Someone with a computer might need to use a printer down the line, so the purchase would be complementary, and not an add-on or upgrade, to the original item.
What is upselling?
Upselling is encouraging the purchase of anything that would make the primary purchase more expensive with an upgrade or premium. For example, if a customer had already purchased a subscription to your marketing tool, upselling would encourage your customer to purchase an additional integration with another marketing tool to improve their experience.
Where cross-selling is offering a complementary product, upselling is offer another product that's an upgrade or premium of the primary purchase the customer has made. So, to continue using the above examples, upselling would be suggesting paying extra for bacon on top of a cheeseburger, or suggesting the purchase of a keyboard with a new computer. Upselling is suggesting a product that will upgrade the primary purchase -- and make it more expensive.
It might not surprise you to learn that upselling is more effective than cross-selling. Think about it -- it's a bit easier to sell something related to what a customer has already purchased than to sell them something that's complementary, but still, different.
What's the difference between cross-selling and upselling?
Upselling is encouraging the purchase of anything that would make the primary purchase more expensive. Cross-selling is encouraging the purchase of anything in conjunction with the primary product.
Think of it as the difference between a complementary product and an upgrade: Where cross-selling suggests another purchase alongside the primary product, upselling encourages customers to make an additional purchase to use with the primary product.
Cross-selling and upselling are often used interchangeable, but different scenarios with different customers can call for one specific approach over the other.
How to Cross-Sell and Upsell
Cross-selling and upselling can occur at the point-of-sale with a salesperson (as in the examples above), but customer success managers can play a role, too.
CSMs can cross-sell and upsell when they spot an opportunity further down the line with a customer, once they've already purchased the initial product. Over the course of email exchanges and phone conversations, customers might mention an interest in expanding into a different vertical, or wanting more capabilities with the product they're using, which can be a signal that they're ready to hear about other options. Below are our best practices to learn how to cross-sell and upsell as a CSM:
1. Get to know your audience.
You may already know about buyer personas, but it's important to get to know your audience once they've already bought your product, too. Use demographic and psychographic information about your customers, along with customer feedback, to create personas for your customers and understand their goals and their challenges in order to identify the products you could cross-sell and upsell that are most useful to them.
2. Build out customer journeys.
Along the lines of the first step, map out customer journeys to identify how they will use your product -- and how it will help them grow. When your customers get to the point where they're seeing results thanks to your product, they'll start telling other people about it and driving referrals.
At that point in the customer journey, they'll likely be excited to hear your cross-sell or upsell offer -- that requires them to spend more money. Wait until they've reached this point before trying to cross-sell or upsell -- during the period of time after they've purchased your product, while they're onboarding and before they've seen its value, trying to sell to them will likely be unsuccessful.
3. Think about problems and offer solutions that map to products.
Before you even hop on a call or email and attempt to sell to an existing customer, take some time to review your product offerings and try to align them with your customer journey. That way, you'll have a clear idea of common challenges your customers face, and exactly which of your products you can try to cross-sell or upsell as a possible solution.
4. Practice active listening.
You might be able to cross-sell or upsell to your customers on the fly during a phone call or over an email exchange, so make sure to hone in on your active listening and reading skills for signals your customer might be ready to hear your offer. If the customer is mentioning a wish for expanded capabilities, or a desire to reach their goals faster, it might be the right time to mention how your other products or services can help get them there.
3 Examples of Cross-Selling and Upselling
Here are some of the common instances where cross-selling and upselling occurs:
1. Sales Reps and Customer Success Managers
As detailed in the examples above, cross-selling and upselling happens at the point of sale with a salesperson, after a customer has been using a product for a while with a customer success manager, or at various points during the customer journey.
Sales reps and CSMs can also propose cross-sells and upsells more indirectly via email by asking customers to check out new products or services on their own -- and having the customer come to them with questions.
2. Customer Education
Blog posts and knowledge base content are another compelling way to start the cross-sell or upsell process. Where customers seek out information on their own -- by reading knowledge base articles and blog posts or watching videos -- marketers and CSMs can include copy letting them know about additional products or upgrades they can try to make their experience even better.
3. Online Stores
Have you ever spent time online shopping, and then received the news that "you may also be interested in" another item from the website? Or a suggestion to purchase a set of sheets once you've dropped a new comforter into your shopping cart? You guessed it -- upselling and cross-selling. Ecommerce websites can prompt upselling and cross-selling depending on which products the visitor clicks on and selects -- to encourage them to keep buying more.
To learn more, learn how to write an effective upsell email next.
Originally published Oct 4, 2018 10:11:00 PM, updated October 05 2018