Maximizing Revenue: The Art of Cross-Selling and Upselling in D2C

The revenue derived from users need not stop with their first purchase.
You spend so much time, blood, sweat, and tears to convert visitors into customers. So, it is only prudent to build on that relationship and further the revenue inflow. But how?
Well, one of the most compelling ways to do this is by cross-selling and upselling.

Contrary to the popular notion of acquiring at all costs, the growth of D2C (Direct-to-Consumer) businesses is fueled by repeat revenue. As a matter of fact, India is witnessing a remarkable rise in the number of D2C brands, with over 600 of them making their mark as of 2023. This burgeoning industry has carved out a market with an estimated worth of over $66 billion this year. Using marketing strategies to cross-sell and upsell generates a steady stream of revenue and maximizes your customer’s lifetime value.

Decoding Cross-selling and Upselling

While the end goal of both tactics is to contribute to the top line, cross-selling is the practice of suggesting complementary products to boost bundled purchases across categories, whereas upselling recommends enhanced or premium product versions largely within a similar category to increase the order value.

Let’s take an example to differentiate these two concepts:

Say, a customer wants a laptop with basic config (4 GB RAM and 80 GB disk space). Upselling implies persuading the customer to buy a high-config laptop (16 GB RAM and 500 GB disk space). On the contrary, cross-selling involves pitching customers to buy a laptop cover, a mouse and its pad, or a pen drive to complement their initial purchase.

Roadmap to Deliver Successful Cross-Selling and Upselling Campaigns

Effective cross-selling and upselling rely on robust customer data analysis, enabling strategic product recommendations tailored to individual preferences and purchasing patterns. Here are some ways to master the art of cross-selling and upselling to fuel your D2C growth.

Unlock the Power of Segmentation

Without segmenting data, your marketing efforts will be carpet-bombed to anyone and everyone. Using segmentation, you can identify interested customers for (Product A) and extend that interest to other product affinity categories (Product B, C, D…). Segmenting users allows you to bucket your ideal customers into multiple groups based on their common characteristics, purchasing power, and past behavior.

WebEngage offers a 4-way approach to customer segmentation, which is as follows:

How does this help cross-sell and upselling?

Leveraging these segmentation methods allows your business to successfully identify your ideal customers and show the right product recommendations to cross-sell and upsell, ultimately boosting sales and repeat order value.

That’s exactly what Epigamia did!

The Mumbai-based greek yogurt brand struggled with inadequate segmentation options for email marketing and the restricted number of channels for omnichannel marketing and that’s how they picked WebEngage.

In addition to maintaining email hygiene and running omnichannel engagement, what really clicked for the brand was the ease of segmenting users. WebEngage enabled the brand to segment users by their preferences and behavior to engage them with contextual messages across their customers’ preferred channels.

The results?

The brand garnered a 25% QoQ boost in orders placed. This demonstrates the effectiveness of accurate segmentation.

Make Better Targeting Decisions with Cohorts

Another great way to boost your cross-sell and upsell endeavors is by doing a cohort analysis.

Cohorts and segments are often used interchangeably but they are not the same. Cohorts are a segment of users with a shared characteristic within a given timeframe. Analyzing these characteristics helps you obtain specific, actionable insights into particular user behavior like ‘Why did a customer suddenly stop buying a product?’ or ‘Which customers buy products every month?’ and so on to help you target effectively.

Here’s a quick differentiation of segments and cohorts:

Segment: All the teenage girls who like the color red.

Cohort: All teenage girls who like the color red and made a purchase on the 5th of February.

You can also build channel-wise cohorts to gain valuable insights like users who got acquired from a certain channel tend to retain better. This enables marketers to focus more on acquiring customers from those channels.

Here’s a glimpse of what a channel-wise cohort looks like:

How does this help in Cross-sell and Upsell?

Cohort analysis enables the organization to not only view who might buy more but also to understand what they might buy and when. This helps you curate tailored recommendations for cross-sell and upsell strategies.

Delivering Critical Messages with ‘Relay’

As the name suggests, a relay is a feature that helps businesses vocalize their brand messages via multi-channel engagement campaigns. Similar to how journey designer campaigns are triggered by user action, relays are triggered when a business starts an event. Relays enable you to auto-send critical business messages on the customer’s preferred channel, like email, SMS, WhatsApp, and more.

How does this help Cross-sell and Upsell?

Depending on your business’s goal, there are multiple ways to use relays to cross-sell and upsell.
Send a personalized price drop alert on sunglasses (cross-selling) to customers who previously purchased a watch.
Or announce a premium handbag collection (upselling) to customers who were browsing for handbags.
The possibilities are endless with Relays. And the best part is it’s a one-time setup. Once you have initiated the campaign, the automation system does the rest of the heavy lifting.

Meet Customers at their Preferred Channel

To nudge users effectively, you must be present where they are. To achieve this goal, a robust omnichannel strategy needs to be in place. Integrating multiple channels, including SMS, Email, Push Notifications, Social Media, In-store, and more, facilitates consistent user experiences while minimizing reliance on numerous tools. The omnichannel approach provides a comprehensive view of customer behavior, enabling tailored recommendations based on individual preferences. This seamless customer experience allows for effortless transitions between channels, ensuring timely engagement at various stages of the customer journey.

Here’s how an omnichannel vs siloed channel approach would look like:

How does this help Cross-sell and Upsell?

1. Seamless Experience: Omnichannel harmonizes the customer journey across diverse touchpoints. This ensures a cohesive and smooth experience for introducing complementary products or upgrades.
2. Customer Retention: Consistency across channels fosters loyalty, making customers more receptive to cross-selling and upselling.
3. Personalization: Holistic customer data enables tailored recommendations, enhancing upselling opportunities, such as suggesting matching accessories for frequent dress buyers.
4. Real-time Communication: Omnichannel enables real-time brand-customer communication. For instance, if a customer adds items to their cart and visits a physical store, the brand can promptly send a notification with a discount offer, driving cross-sell or upsell opportunities.

HomeLane, India’s furniture brand sought to increase revenue by preventing customer drop-offs in the user lifecycle through real-time engagement. The brand encountered issues managing user behavior data due to their growing user base, relying on multiple tools, causing data silos and integration challenges.
To tackle this, the home decor brand adopted a behavior-based omnichannel communication approach to nurture leads and deliver personalized experiences across platforms effectively. The HomeLane team utilized the WebEngage Journey Designer to craft user journeys that engage individuals at various lifecycle stages, ultimately minimizing drop-off rates. Thus maximizing their revenue by a whopping 148%.

In Conclusion to cross-sell and upselling campaigns…

Cross-selling and upselling is a win-win situation where customers enjoy a better shopping experience, while you make more money delivering them. It allows you to engage customers and retain them for a longer period of time with relevant experiences. By intelligently recommending complimentary products that meet their interest you can increase the revenue potential of your business without incurring significant operational costs.

Remember, it’s not just about acquiring customers; it’s about keeping them engaged, satisfied, and loyal. The key lies in understanding their needs and preferences and aligning your marketing efforts accordingly. We have helped over 800+ brands solve this puzzle and deliver 8M+ personalized shopping moments with a $12B additional revenue boost for our customers. Take a free demo to discover how we can help your revenue and repeat purchases soar to new heights.