Cross- and up-selling methods offer customers additional products or products of a higher quality before a purchase. But not every customer enjoys product recommendations at all times.
Up- and cross-selling: the right kind of product recommendation
Personally, cross- and up-sell are my favorite amongst marketing methods and product recommendations. If I buy a new camera, I appreciate the offer for a good camera bag to protect it (and have some place for an additional battery, SD cards and some chewing gum). If I am looking for a kitchen knife, I want to see what a pricier knife might have to offer in contrast to the „cheap“ version (usually, less risk of cutting myself). These offers are relevant to my shopping and relevancy is one of the most important aspects of modern marketing.
But not every cross- and up-sell strategy hits the nail on the head. I found three studies (and therefore also three best practices) to show what you need to think of when using cross- and up-sell to optimize your customer’s journey.
The right moment …
Nearly every second customer (40%) is annoyed when they get a product recommendation during a customer service issue (source: Achieve Global via invensis). Unsurprisingly, people don’t like to consider buying a product from a company with which they currently have a problem. According to a study by Achieve Global, the best moment to mix customer services and marketing is when the problem has been solved. The customer is satisfied and marketing can use this feeling of elation to make a recommendation.
The right buying phase …
The HAW Hamburg asked customers when they consider up- and cross-selling methods the most effective (German PDF here). The result: 71,8% prefer recommendations on the page of the product that they want to buy. They want the recommendation during their decision phase. Making an additional offer when the customer is already reviewing their product in the cart is less successful. Only 28,7% make use of recommendations when looking at their cart and even less consider recommendations during check-out (8,5%). At this point of the buying process, the customer has already decided and is on the way to purchase. Making an additional offer at this point might even stop the whole process.
The right customer …
Scientists of the Georgia State University cover „The Dark Side of Cross-Selling“ in their Harvard Business Review-article. They defined four customer segments that should not be targeted with cross- and up-sell offers because the value analysis of these segments shows that some customers don’t invest more money, even if the cross- and up-sell strategy is successful. By regularly returning goods, demanding a high level of customer service and using all available saving opportunities, these segments might lessen the turnover and raise the expense to accommodate them.
Customer analytics helps you finding out what your customers really want. By analyzing their behavior and interactions with your company and your content, you can step by step improve their customer experience and help creating a real bond.
In our white paper on „Uplift Modeling“, you can learn how you find out which customers really need your marketing content to make a buying decision – and who don’t.