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Why is SMS the perfect marketing tool for upsell and cross-selling? SMS provides the timeliness, personalization, and open rates needed to be truly effective for upselling and cross-selling.
Keeping customers, improving their lifetime value, and giving them a delightful experience is the name of the game. We’re not saying that frivolously, either. Let’s look at the stats. Research done by Bain & Company found that a five percent increase in customer retention can increase profits by 25% to 95%. Also, it’s anywhere from five to 25 times more expensive to gain a new customer than to retain an existing one.
With recent changes in the digital marketing ecosystem, such as the iOS 14 update, the costs of acquiring new customers are higher than ever. Many brands have mitigated these changes by developing brand loyalty and focusing on CLTV. So what exactly is CLTV, and what does it have to do with upselling and cross-selling products?
Customer lifetime value (CLTV) is a key marketing metric to track your customer experience and how your customers contribute to your company as a whole. This is the total amount spent by customers throughout the period of their relationship with your brand. It is more efficient to retain existing customers than to acquire new ones, so increasing the value of your current customers is important to the growth of your brand.
This is where upselling and cross-selling comes into play. By increasing your average order value (AOV), you will also increase your customer lifetime value. Upselling and cross-selling is a great thing for any brand, but especially for those brands that have a limited customer timeframe, such as baby products.
Why is SMS the perfect marketing tool for upsell and cross-selling? With messages arriving alongside texts from loved ones and 98% open rates, it’s no wonder that SMS is one of the most sacred and effective communication channels today. SMS provides the timeliness, personalization, and open rates needed to be truly effective for upselling and cross-selling.
Upselling is the process of selling a better or higher-end product than the one the customer was considering. While upselling will improve your AOV, it also can help the customer walk away with a product that will bring them more satisfaction.
The experts at Shopify put together the following upselling best practices:
Cross-selling, on the other hand, is selling complementary products alongside the original product. For example, a customer buying nail polish could be cross-sold on a nail filer or cuticle care serum.
Cross-selling helps expose customers to more of your catalog, increase AOV, and improve customer satisfaction.
A post-purchase follow up SMS that combines personalization and a discount is a great way to get customers to return, especially for first time customers. There are a couple of approaches you can take, and your imagination is the limit. Here are some SMS copy examples for inspiration:
The customer has already decided to purchase one product from you, so suggesting a complementary product or a bundle is a perfect way to cross-sell and increase CLTV. Again, the sky's the limit when it comes to suggesting products. For example, you could offer a limited time discount for another product. You could send a tutorial video that highlights the product that was purchased along with other products. Or you can utilize data to suggest a product the customer looked at but did not purchase to send a click-to-buy SMS. Click-to-buy links take customers directly to your checkout to create a frictionless buying experience.
Subscriptions keep your customers coming back month after month. After a purchase, you can send a gentle reminder text telling customers that they can save 10% on this product every time it ships by signing up for a subscription.
Another way to upsell if your customer is already signed up for a subscription is to send a reminder that they will be charged and their subscription will be shipping soon then offer a couple cross-sell products that they can add to their shipment. Sending these reminder texts also helps prevent chargebacks.
While converting abandoned checkouts may not technically be an upsell or cross-sell, the goal is still to increase CLTV and revenue. Brands have seen incredible success using SMS to recover revenue lost to cart abandonment. Brands recovering 30% of abandoned checkouts with SMS, we are looking at you 👀.
There are two approaches to using SMS to recover your abandoned checkouts: live agents and automation. Let’s start with live agents.
For example, LiveRecover by Voyage is an SMS platform that gives brands access to a team of highly-trained live agents (aka brand ambassadors) that will message every customer who provides their mobile phone number in the phone field at checkout.
LiveRecover’s agents will:
Brands that have implemented cart abandonment live agent recovery have seen:
The other method for using SMS to recover abandoned checkouts is to use automated messages. The key to creating a successful automated recovery campaign is to use segmentation and data to create personalized, non-spammy messages.
An abandoned checkout text could look like, “You left something amazing in your cart! Complete your order in the next hour and we’ll give you free shipping! Use code: FREESHIP at checkout”.
SMS is an incredibly powerful tool that allows your marketing messages to get into the literal hands of your customers. Using SMS to upsell or cross-sell your products is just the tip of the iceberg of what SMS can do for your brand.
Want to learn other ways to use SMS to improve your CLTV? Click here to read more!
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