Getting the most from cross-and up-sell programmes
Email as a marketing tool is quite possibly the most powerful one in the box, and used properly can generate a substantial increase in business. By Kara Trivunovic.
By By Kara Trivunovic
Marketers do not need an Oxbridge study to tell them that driving incremental sales from a current customer costs a lot less than acquiring new ones. But many are still squandering the opportunities afforded them by their own email lists. Email cross-sell and up-sell programmes allow marketers to drive more profitable behaviour from the customers and prospects they know best.
What is cross-sell and up-sell?
Cross-sell refers to the tactic of recommending additional purchases based on a previous purchase. Often, but not always, cross-sell involves selling items from categories other than the category of the initial purchase. For example, if a customer bought a jumper from a clothing retailer, both a matching shirt (from the clothing department) and a pendant (from the accessories department) might fall under the cross-sell banner.
Up-sell refers to the tactic of selling enhancement to the existing purchase. In the brick-and- mortar world, McDonalds practices up-selling every time they ask “would you like to go large?” Similarly, car dealers practice up-sell when they convince buyers to opt for a larger or more luxurious car than they initially intended to buy.
While email sometimes engages in up-sell before purchase, it more often happens after purchase. As a result, up-sell usually takes the form of product-specific add-ons, such as extended warranties, optional features or enhanced services.
Why is it a good idea?
In this life we are all looking at getting the best value for money and making what few pounds people have stretch as far as they will possibly go. Cross-sell and up-sell programmes offer opportunities for marketers to increase revenue at a relatively small cost.
Regardless of industry or channel, customer acquisition costs money – anywhere from pennies for simple search engine marketing (SEM) or banner campaigns, to hundreds of pounds for sophisticated multi-channel efforts in high-margin industries such as financial services and insurance. In contrast, cross-sell and up-sell programmes can be run at a fraction of those costs because they do not require the expense of sifting good prospects from a bunch of hand-raisers. By definition, cross-sell and up-sell programmes involve a cherry-picked audience – people who have already bought something from a marketer.
How easy is it to implement cross-sell up-sell?
It’s as easy as 1-2-3. Well, almost. But it’s important to note that these programmes can be devised no matter what data is available.
Making cross-sell and up-sell work in email requires nailing down three inputs: available customer data, available resources and available communications.
The main things to keep in mind when putting the email-marketing tool into practice are:
1. Start small – try simple applications of cross-sell and up-sell first
2. Add scale – roll out offers to other categories or products as resources allow
3. Add sophistication – assuming that cross-sell and up-sell offers perform well, improve performance by testing dynamic offer insertion and modelling to fine-tune the emails
Positioning is as important as placing, so marketers also need to think about where the cross-sell and up-sell offers should go. Some options include:
• Transactional messages - such as purchase confirmations and shipping notifications
• Triggered messages - including abandoned cart or web-analytics-driven emails
• Regularly-scheduled emails – use tools like newsletters or typical sales emails
• Ad-hoc emails - Single-purpose emails enjoy the advantage of focus
What technology is required?
The basic principle of cross-sell and up-sell is a simple and effective one. However, integrating this with your email channel does require a certain amount of ‘techie’ knowledge and tools to get it off the starting line.
Unlike traditional outbound batch-and-blast email marketing campaigns, cross-sell and up-sell email programmes are typically triggered by a purchase process, which requires real-time integration with e-commerce systems, web analytics, recommendation engines, customer databases and/or other external systems.
This entire process requires a triggered or transactional email solution that not only ties into your data warehouse and other systems, but also provides you with in-depth reporting to gauge deliverability and engagement. Cross- and up-sell email programmes are most effectively served by a lifecycle email marketing solution that allows you to easily set appropriate triggers.
How can success be measured?
Results. It’s always about results! Why else do we put time and effort in exploring these different avenues if we can’t see what we’ve achieved at the end of it?
Doing cross-sell and up-sell right requires significant expertise and technology resources. It also requires patience to see the task through to the end. However, marketers who employ cross-sell and up-sell tactics successfully enjoy substantial gains in sales. For example, an IBM study found a 13% lift for dynamic cross-sell offers and a 17% lift for dynamic up-sell offers with UK retailer Jessops.
Determining the success of cross-sell and up-sell depends on the data resources of the marketer. Sales, of course, represent the clearest indication of success. But marketers should also consider using control sample to determine lift. This entails creating two or more versions of an email—one or more with cross-sell up-sell tactics and one with static offers or no offers. Only by comparing the tactics against a control can a marketer determine the actual value of the offers.
While non-retailers do not ‘sell’ in the traditional sense, they can also benefit from cross-sell and up-sell tactics. A publisher, for instance, might use them to find content of interest to their readers. Manufacturers might use them to help customers find products that complement their past purchases or actions. The same tactics and measurements generally apply across the board.
Cross-sell and up-sell programmes represent untapped potential for many marketers. Incorporating these into dynamic emails creates clever, thought-provoking content that can expand customers’ perceptions of their brands and what they offer.
Email has proven itself as the highest bang-for-the-buck channel in all of marketing. No other channel comes close to the speed-to-market, mass-reach and timely impact of email. Therefore, the potential of cross and up-sell programmes in this channel sit very much within reach of every marketer. Isn’t it time for you to take your efforts to the next level?
About the author
Kara Trivunovic is Vice President of Agency Services, StrongMail. Kara is responsible for managing StrongMail's New York-based agency services and its full suite of multi-channel strategic, creative and implementation services.
Over the course of her 12-year tenure as a marketing professional, Kara has become a fixture at email marketing events and in industry publications. Working with a number of Fortune 500 and Fortune 1000 organisations, Kara has had the opportunity to conceptualise and implement new and innovative email programmes, optimise contact strategies and develop staffing and budget plans. Kara is actively involved in programmatic email development, execution and strategy, where she brings a unique industry perspective having worked on the client, agency and provider side.
StrongMail is at the forefront of enabling marketers to acquire new customers and foster deeper loyalty with existing ones through email marketing, social media marketing and the web. StrongMail empowers leading brands to boost the performance of their interactive marketing programmes exponentially by enabling them to deliver the right message to the right person at the right time.