Looking to increase your revenue? Finding new customers can be challenging and expensive. Luckily, there's a major source of potential new sales right under your nose: your current customers.
Growing revenue as a small business can be a cost-intensive process. You don't always have the visibility you need to easily draw new clients. But you can use data to better serve your existing customers, letting you build momentum by getting the most out of the relationships you already have.
By turning to upselling and cross-selling techniques, you can provide value for your existing clients and increase your revenues at the same time. This lets you build your top-line in a cost-efficient way. It also deepens your relationship with the people who already value your goods and services.
But how do you know what your current client base needs most? That's where data becomes crucial. In this article, you'll learn to leverage your data to help you upsell and cross-sell to your audience, giving your small business the platform it needs to accelerate growth.
What are upselling and cross-selling?
You are surrounded by upselling and cross-selling. In fact, you may have become so used to them that you don't even notice it anymore.
“Would you like fries with that?”
“Are you interested in the extended warranty?”
“Have you considered our bundled home and car insurance?”
Consumers hear these questions all the time. These tactics represent attempts to upsell and cross-sell clients, trying to add revenue to an already-sold individual. Here's the basic breakdown:
- Upselling: Getting a customer to purchase a larger order than they had originally intended. Think about giving a price break for bulk orders or a fast-food restaurant offering an extremely cheap upgrade from a medium drink to a large one.
- Cross-selling: Convincing a customer to purchase another item along with their initial purchase. Imagine a waiter attempting to push desserts at the end of a meal.
The advantages of selling to existing customers
When someone has already purchased from you, you've built a basis of trust. A good experience makes them more likely to turn to you for other needs. Upselling and cross-selling leverage this dynamic to increase revenues.
Your current clients are more receptive to your other products. Not only that, they are also more willing to open their wallets to you once they’ve already made an initial purchase.
Statistics back the value of this strategy. For instance, one data set indicated that existing clients show a 50% higher likelihood to try new products compared with newbies to your company. At the same time, your existing client base will likely spend, on average, 31% more than first-time buyers.
One data set indicated that existing clients show a 50% higher likelihood to try new products compared with newbies to your company.
How to use data to maximize your sales
Consumers have an initial skepticism every time they approach a potential new supplier. Meanwhile, even finding fresh browsers can be difficult and expensive. That's why the cost of acquiring a new customer can range anywhere from five to 25 times higher than retaining one that's already tried your offerings.
Once you find a customer and eliminate their early doubts, you have an advantage. Making future sales becomes that much easier. The key is to maximize this connection.
Leveraging data lets you accomplish this mission. With the right info, you discover the products and services your existing clients want most. You can easily steer them towards value-expanding upselling and cross-selling opportunities.
What data should you track and analyze?
The precise measures for improving your business will depend on your industry and the dynamics of your customer. However, there are some basic concepts you can use to choose the right metrics. Think about:
- Who's buying?
- What's working?
- What do customers need?
The key is not to think about upselling and cross-selling in a cynical "what can I get out of these customers" way. Rather, think of it from the consumer side.
Look at buying patterns and let those guide your suggestions. Also, review your approach and make sure you are presenting the best possible sales pitch. At the same time, consider the overall marketplace and anticipate needs.
How to leverage data to upsell/cross-sell
You see some form of it all the time on Amazon or Netflix: people who bought/watched this also bought/watched that.
It's the central data metric for upselling and cross-selling. You find preference patterns among your customers and you use that to refine recommendations for others. It helps you find a receptive audience for your add-on sales attempts.
Your use of data can go much further, however. For an example, look at Stitch Fix, the monthly clothes subscription service that promises to find the perfect wardrobe for your body shape and taste. It makes its money by guessing what its customers will want to wear.
The firm does this through data. As its customers make decisions, that information gets added to Stitch Fix's database. The company then crunches the numbers with its algorithms and uses these findings to fine-tune its selection process.
You can utilize data the same way. By collecting information about your customers and discovering the best way to process it, you can master your ability to predict their needs.
By collecting information about your customers and discovering the best way to process it, you can master your ability to predict their needs.
Tips to improve data analysis
How do you get the most out of your data? Here are a few tips to guide your analysis.
Have a Central Data Location
Scattered numbers can't help you. Data from one source should be used to complement figures from another. You'll get a more comprehensive analysis this way.
As a result, create a central database. Give your top minds access to the numbers. Guide them in terms of your overall goals but take a team approach to the number-crunching. You'll get some surprising (and surprisingly profitable) insights this way.
Define Your Question
What do you want to accomplish? Yes, we know: higher sales. But the more targeted your question, the more your data can show you.
As you jump into the statistics, create specific questions you want to be answered. From there, you can pick the exact numbers that suit your query and refine your analysis.
Turn Insight into Action
Analysis means applying the insights you learn. Once you discover a workable technique or an interesting consumer preference, decide how you want to take advantage of it. Craft an upselling/cross-selling strategy that leverages what the data are telling you.
Science moves forward through experimentation. Your website provides a great lab for these trials.
Try different pitches and strategies. Compare the data you get from these experiments. Over time, you'll hone the most effective approach possible.
Keep Looking for New Data
Don't be satisfied with your current level of information. You can always learn more. Find new ways to discover what your customers want most -- hopefully before they know themselves.
Get the most out of your sales efforts through data
Your existing customers provide an amazing resource for your small business. By providing them with additional value, you can accelerate your growth in a cost-effective way. The question becomes: what should you try to sell them?
Take the guesswork out of your sales efforts. Utilize your data to understand your customers and provide them with add-ons that suit their needs. Doing so can help you upsell and cross-sell them more effectively, delivering what they need most while improving your business at the same time.