By Chad Goldsmith, NetSuite
If you shop online, chances are you’ve had this experience: You are about to check out when the web store flashes you an additional product suggestion that is so spot-on, it is all but irresistible. Maybe it’s something that goes perfectly with what you are already buying, something you never would have thought to look for, or even something that you admired but didn’t buy previously. You put it in your cart, and though your cost has gone up, you feel like you’ve won.
Now think about the last time you ordered something over the phone or checked out in a retail store. Did the salesperson attempt to up-sell you on an additional product, or a grander one? How meaningful or welcome was that suggestion, if there was one?
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E-Commerce has led the way in targeted and personalized cross-selling and up-selling, using powerful automation and personalization tools that catalog a backlog of consumer purchasing data to make relevant product recommendations. If you are buying a lamp, you might be interested in the shade that most other customers who purchased the same one selected to go with it. If you are buying a flashlight, you would probably appreciate an offer of the right size batteries it requires. And if you are buying a corporate gift basket, you won’t object to at least looking at the more expensive version of the one you were leaning toward.
These kinds of cross-sells and up-sells may still be possible in small and attentive retail store environments, but in general, they are rare. What we more typically see are generic up-sell offers that have no relationship to the customer’s current or past purchases. Especially in the case of phone orders, it is usually the batteries being offered to the customer buying the lamp. Forced product recommendations are a long-standing tradition in call center sales — an offer of candied almonds to every customer, no matter what else was ordered — but these meaningless gestures result in disengaged sales agents, bewildered customers, and non-existent conversion rates. They are arguably worse than no attempt at all.
This is unfortunate, since industry studies consistently show that conversion rates for relevant product recommendations significantly overshadow overall conversion rates. After all, a customer who has decided to make one purchase has already converted — what’s one more item on the bill? The key is to take advantage of this window of opportunity. You have one shot to put that perfect item in front of the customer and make a seamless add-on sale. If you aren’t making that suggestion, you’re leaving money on the table.
When I ask the retailers I work with whether they have a cross-sell/up-sell strategy, the answer I usually get is a sheepish, “Well yes, but not a very good one.” Yet with the right technology, any multichannel retailer can leverage the necessary intelligence to make relevant product recommendations across all channels that translate into successful conversions. What it takes is a single commerce platform.
With a single commerce platform, you have the ability to manage the data and processes for all sales channels, using the same intelligence to feed suggestions to the e-Commerce site, customer service staff and the email marketing team. Imagine sales associates at the register, call center representatives on the phone, and live chat service personnel all using the same intelligence to suggest cross-sells and up-sells. Every communication with the customer can be synchronized, and all feedback to the central database, making it more intelligent.
Strong product recommendations use numerous metrics. They require collective purchasing data (customers who purchased X also purchased Y), as well as personal customer purchasing history to compare (perhaps customer A is more a Z fan than a Y fan). They also look at statistics on the success record of that same XY combination being adopted by other customers, both before and after the suggestion. This kind of intelligence can only become stronger with feedback from live customer-facing staff at the point of purchase.
With merchandising teams managing the databases, even anecdotal intelligence can be integrated. Perhaps staff members can offer insight as to why a certain recommendation wasn’t successful or relevant? Enter it in. As all channels begin to collaborate, you will build a more powerful sales experience with a unique advantage over wholly online businesses as well as more fragmented multichannel retailers. In a nutshell: Stronger cross-sells and up-sells, increased conversion rates and average order values, and more engaged customers in every channel of your business.
Chad Goldsmith is a Solution Consultant in NetSuite’s retail vertical, specializing in ecommerce and multichannel marketing. He has over 25 years of systems and operations management experience in the financial and retail industries. He served as a Director of E-commerce for an Internet Retailer 500 company, and, most recently, managed retail and ecommerce customer operations for Harry & David. He is also a successful entrepreneur who managed all aspects of his own multichannel retail home furnishings business.
