The cross selling and upselling business model

This is the ninth part of the series on how companies can make money from high traffic websites. In this post we’ll discuss cross-selling and upselling. As we’ll demonstrate, cross selling doesn’t need high traffic to sell more products.

At Endava we work with companies who are capturing data about their visitors and attempting to personalise the experience, usually with a goal of providing superior service, or selling more goods.

It’s all about the customer (and CRM is key)

At the heart of this solution is a CRM (Customer Relationship Management) system. CRM has become synonymous with large, expensive and difficult IT programmes.

Two products in the last decade quickly changed this perception – Salesforce and Facebook. Both of these products, which are technically speaking – services, provide a single view of the customer (known in the industry as a single customer view) – i.e. who they are, what they’ve bought, and as much as possible in between – such as what they’ve looked at and who from this company they’ve spoken to.

See here for the data model for a Facebook user. Salesforce has a similar ‘Lead’ object. They are detailed yet relatively simple models.

CRM is the key to upselling other products and opportunities. There’s no point upselling a subscription to a subscriber. To show an advertisement for cheaper subscriptions to a paying customer will devalue the relationship. To provide the rules of what can and can’t be offered to customers, even a basic CRM system is mandatory.

We have worked with customers such as sports teams who have had breaking news articles about a player leaving the team, with a graphical link at the bottom of the article for that player’s shirt – and sold more of their shirts from that post than the previous months’ worth of sales. This is a demonstration of contextual and targeted upselling opportunities.

When I log into my bank account, I see the same advert every time for a product I already have. This is the worst type of upselling, because it devalues the promotional areas of the website. I probably subconsciously don’t even notice promotions once I log in because they have been devalued so much.

The future of cross-selling is further than you think

Credit: http://www.flickr.com/photos/45501032@N00/3726589535/in/photostream/
Heinz soup varieties
Credit: http://www.flickr.com/photos/45501032@N00/3726589535/in/photostream/

The web is still far away from the science of cross selling in physical shops. When a customer looks at a can of soup on the shelf in a supermarket, the cans are arranged in a way to cross sell other soups and products, placed in the peripheral vision, near the one the customer wants to buy (see the photos in this post on Real Money). And it works almost every time: customers walk into a supermarket and see an interesting product which they add to the basket and wasn’t on their original shopping list.

E-commerce sites are well behind this tactic. Widgets such as ‘other items you might be interested in’ and ‘best-selling items’ are too much of a hard sell.

Cross selling and upselling requires new user interface models and techniques, just to bring sites up to the same level as physical shops, let alone exceed them.

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