Email is rightly considered an essential retention channel. If you’ve won the customer over enough to get their email address, it only makes sense to keep them. But email marketing can be used to do more than just retain customers. It can be used to drive upsells and cross-sells, and build lifetime value through data-driven, personalized outreach.
Opportunities for Cross-Selling and Upselling
1. Confirmation emails
Customers expect confirmation emails for their orders and are often eager to open and view them. As such, confirmation emails represent an opportunity to present customers with product recommendations.
2. Triggered emails
Triggered emails can be used to promote cross-sell and upsell items to customers. For example, if you know that shoes and bags tend to be purchased by the same customers within a certain period of time, the purchase of either one of these products can trigger an email that promotes the other.
3. Complimentary offers in transactional emails
Including complimentary offers in addition to the primary offer helps to increases opportunities for conversions. Indeed, research from Experian found that emails with cross-sell items generate a 20% higher transaction rate than those without.
Data Will Tell You Which Products Customers Prefer
The above methods are most effective when they’re informed by data, as data will enable you to determine which items are likely to interest customers. This data should be available within your e-commerce, CRM and email marketing software. It’s also worth noting that people welcome offers that take into account their personal preferences. Research from Listrak found that…
- 80% of Americans find it helpful when brands suggest products based on their transactional history
- 71% want recommendations derived from online browsing behavior
- 82% said that they would purchase more products through email if those emails were personalized around their preferences
But It’s Hard to Turn Data Into Useful Insight…Without the Right Technology
A recent Salesforce survey found that relying on manual means to get data from multiple sources into a single view of the customer remains a major challenge for organizations that are moving towards more data-driven methods of marketing. The survey also found that analysis is often performed by business analysts rather than end-users of the data.
In other words, marketers often need to wait on others before they can act on any insights derived from data. If you want to run a cross-selling campaign mid-quarter to grow revenue from existing customers, you can’t wait weeks or months for a few useful insights. You need results now. For these reasons, marketers are increasingly turning to solutions that can help turn data into insights, and insights into action. You’ve probably heard of such technologies: personalization systems, recommender engines, predictive analytics, marketing automation, etc.
When selecting a solution, you should pay attention to the way in which it analyses data, as different approaches will yield different results. For example, many recommender engines base their recommendations on some variation of the logic “people who browsed/purchased this, also browsed/purchased that.” Unfortunately, this method tends to restrict recommendations to products within the same category, which limits opportunities for cross-sells. Similarly, an automated workflow can guide customers towards a specific course of action, but must be grounded in data rather than arbitrary assumptions to be effective.
At Coherent Path, we use data to build maps of retailers’ transactional, product and content spaces and plot their customers’ paths through those spaces. This approach to personalization delivers the insight necessary to effectively and reliably cross-sell and upsell.
Cross-Selling via Customer Journey Optimization
Every customer travels along a specific trajectory through your product, content and transactional space. Items which are closer to this path, can be said to be within the customer’s “comfort zone”. Items which are distant from the path, are outside of that comfort zone. If the items are very distant, the customer will have no interest in them, but if those items just outside of the zone, the customer is likely to have an affinity for them. By guiding the customer along a sequence of products, moving from those within the comfort zone towards products that are a bit further out, you can introduce customers to products that are new to them and earn cross-sells.
For example, a client of ours that specializes in clothing and outdoor recreation equipment was very well known for their best-sellers, boots and backpacks, which by definition accounted for a plurality of purchases. However, most customers who purchased best-sellers weren’t buying from the rest of the catalog. Our client saw a clear opportunity here: if customers purchased from more of the catalog, revenue would increase. They used Coherent Path to pursue this opportunity. By applying the approach to customer journey optimization described above, Coherent Path’s Email Campaign Optimization solution systematically exposed customers to products that were new to them but which they were likely to be receptive towards. It worked and revenue increased dramatically.
Email can be a great channel for cross-selling and upselling. In order to drive cross-sells and upsells via email, it’s best to use a personalized approach, informed by customer behavioral data such as transactional and email data. Getting a handle on your data can be technically and logistically difficult. Fortunately, there are many solutions out there that enable you to integrate lots of data from multiple sources and recommend or execute courses of action. Examples of these solutions include personalization systems, predictive analytics solutions and recommender engines. Customer journey optimization is a powerful form of personalization that enables retailers to effectively and reliably cross-sell and upsell.