Upselling

Anyone who has already bought from you knows what you deliver and how you work. Carnaby helps companies use what they know about their customers to make offers that suit each customer’s situation, and to measure what their mailings contribute.

Let customer behaviour drive the offer

Direct marketing is advertising aimed directly at a specific recipient, by email, text message, letter or telephone. A mailing to the entire customer database takes no account of what each person has done. Instead, start from an event or a behaviour that says something about what the customer needs next.

Base the signals on data you already have in your customer database. With audience segmentation you divide customers by value and behaviour, and a channel matrix shows which channel suits each group.

Upselling, cross-selling and repeat purchases: how they differ

Upselling

the customer chooses a more expensive version of what they already buy.

Cross-selling

the customer buys something else that complements the first purchase.

Repeat purchase

the customer buys the same thing again, for example when the product has run out or the contract has expired.

Upselling works close to a purchase decision, cross-selling after the customer has benefited from the first purchase, and repeat purchases when the product is running out or the contract is about to expire.

Measure the uplift with a control group

Someone who buys after a mailing might have bought anyway. So put a randomly selected part of the audience in a control group that does not receive the mailing, and compare the groups afterwards. The figures in the table below are illustrative.

The mailing appears to generate 600 purchases. Since 2 per cent of customers would have bought anyway, the uplift is 200 purchases, and that is the figure to set against the cost. If you have few customers in the control group, the difference may be down to chance, so repeat the test before drawing conclusions.

Rotate the customers in the control group between campaigns, so that nobody is always left out. Also keep track of which other mailings customers received during the test, otherwise the effects cannot be told apart.

Calculate the uplift in Swedish kronor

A discount goes to everyone who buys, including those who would have bought without it. This example is also illustrative: with a contribution margin of SEK 300 per purchase and a SEK 50 discount, the calculation looks like this.

Without the discount the uplift might have been smaller, but a large part of the discount cost goes to purchases that would have happened anyway. Test the same offer with and without a discount.

Decide how often a customer may be contacted

Marketing, sales and customer service may all want to reach the same customer in the same week. Everyone needs to see the same contact history, and a shared contact policy should specify:

• the maximum number of mailings per customer per month
• which message goes first when several clash
• a pause when the customer has an open complaint or is waiting for a delivery
• a pause immediately after the customer has made a purchase that the mailing was meant to lead to

Track the unsubscribe rate per mailing. If it rises, it may be a sign that customers are getting too many mailings or the wrong offers.

What rules apply to direct marketing?

Under the Swedish Marketing Act (marknadsföringslagen), marketing by email or text message to private individuals requires prior consent. There is an exception for existing customers, which requires all of the following conditions to be met:

• the address was collected in connection with a purchase
• the customer has not objected to it being used for marketing
• the mailing concerns your own, similar products
• the customer can opt out easily and free of charge, both when the address is collected and in every mailing

Cross-selling something in a different product or service group from what the customer bought may require consent. Every marketing email must also include a valid address to which the customer can send a request for the mailings to stop. Document when and how each consent was given, so that you can show it afterwards. Somewhat different rules apply to mailings to business customers; see the page about B2B leads.

Under GDPR, everyone has the right to object to direct marketing, and the right is absolute. Make sure an objection stops the mailings in all systems. Telephone and letters may be used as long as the recipient has not clearly objected.

How to get started with upselling and cross-selling

We go through what customer data you have, how you contact customers today and what the mailings deliver. We then develop segments, offers and a plan for how the results will be measured.

Contact us about upselling and cross-selling