Expanding your services with existing customers by upselling or cross-selling is a strategy proven to increase revenue, and it is especially effective for companies in the utilities sector.
The Utilities and Energy industry is experiencing unprecedented changes: changes in regulation (including relaxed regulation or even de-regulation in some areas), the powerful impact of technology and digital transformation. Also, and importantly, customers who are no longer passive users, but increasingly demanding and informed users, who have new requirements for their interactions with companies: simplicity, transparency, and more effective ways of interacting and this includes being able to communicate directly, with services and options that are customized to their preferences.
Marketers who deal with customer care in the Utility sector cannot ignore these huge changes or be put off by them; in doing so a business would put loyalty, credibility, and revenues at risk.
Behind each of these changes that the Utility Industry is experiencing, there are enormous opportunities that may be captured by implementing innovative strategies that are personalized for the customer.
In utilities, the battle is no longer fought just on the basis of costs. Instead, how you present yourself to your users and on how you interact and communicate with them may be just as, if not more important than price. After all, utility services have a major impact on customers’ everyday lives and put simply, better customer service means increased revenue.
And that’s why upselling and cross-selling are an important part of the overall marketing strategy.
Cross-selling and up-selling defined
So, what does it actually mean to cross- or upsell to your customers?
One of the best examples of upselling is something we have probably all experienced. If you order just a sandwich at McDonald’s, the cashier will most likely ask you a simple question: Would like fries with that? This is probably the simplest and most well-known example of cross-selling, and it works. Another well-known example can be found in the Amazon shopping experience. Each time you log in to your Amazon account, its algorithms suggest products that you might want to buy based on your customer profile and on products you viewed in the past. That’s cross-selling. Or, when buying a single item, it will typically suggest a bundle of complementary items that are “frequently bought together.” That’s upselling. Consider that Amazon attributes 35% of its revenues to its cross-selling strategies.
In simple terms, cross-selling techniques are aimed at selling products related to those that the customer already owns, or is about to buy.
The two terms are often confused, but there are some key differences. The up-sell is used to sell a higher and more expensive version of a product (or of experience) that the customer already has or is about to buy.
JetBlue, the US low-cost airline, has made $140 million with its up-selling program called “Even More Space.” Lufthansa’s “Premium Economy” service (which even exploits the opportunities of virtual reality) has also been successful. According to Forrester Research, cross-selling and upselling represent 10% – 30% (on average) of e-commerce revenue.
From Spotify, Ryanair, language learning apps, to cloud services, there are lots of examples that make it clear: upselling and cross-selling offer advantages for increasing revenue, improving the customer experience, and positively influencing brand identity.
Both cross-selling and up-selling have one main objective: to offer more value to the customer.
And techniques must be handled with care. The key to success is knowing as much as possible about “who” your customers are. How they behave. What they want. What they are looking for. And – above all – what they could look for or want.
Here are five methods that marketers in the Utility and energy sector can apply up-selling and cross-selling in their strategy.
1. Pay attention to the customer journey
The first step to create – and seize – up-selling and cross-selling opportunities is to analyze your customer’s journey.
To do this, it is essential to have a multichannel approach. Finally, moving toward an omnichannel vision (we will focus on this in the next point) that considers a long period of time and different touchpoints.
How do users approach your company? Which tools do they use when they have problems? Do they pay their bills online, via mail, or at a branch office? If online do they use a computer or a mobile app? How do you communicate with customers? Do you use social channels?
It is not easy to track all of this information, but it is possible. And it’s the only way to have a complete overview of the interests and behaviours of the person you are addressing and how these are implemented on the different channels.
2. Employ omnichannel communication
For many of us, the common purchasing experience may take us across a number of different channels. Take a clothing brand for example. We may visit the brands’ page on Facebook or Instagram or watch videos on the brand website or YouTube channel before deciding to buy the item in a physical store or online. And this is just one of many possible examples.
Many of our purchases are conducted in an omnichannel way, and we expect, consciously or unconsciously, that brands and companies will support and facilitate us in this process.
The same also happens for the choice of the energy provider. Once this choice has been made, an experience that is both flexible and tailored to our needs will make our overall experience more effective and convenient.
This improves the quality of the customer experience and allows the company to better know customers’ habits, get behaviours and attitudes. It also makes it easier to propose cross-selling and upselling opportunities.
3. Segment your audience
While each customer is unique, there are common characteristics and behaviours that many customers share.
Dividing your audience into segments of customers who share the same characteristics has a positive impact on every marketing and customer service strategy, including up-selling and cross-selling. It’s what you call a data-driven approach.
Big companies, like Amazon, have been using machine learning algorithms to analyze a huge amount of data on users’ online behavior (purchase history, as well as personal, social, geographical, and other data). This huge “audience” is then divided into more and more specific and dynamic clusters (for this reason we prefer to talk about smart data, or deep data, rather than simple big data). In this way, purchasing advice, related products, and actions for cross-selling and up-selling become increasingly targeted and effective.
4. Embrace personalization
Communicating with each person differently, depending on their characteristics, is one of the most effective techniques that businesses can embrace, and it’s made possible by the most advanced technologies such as those offered by Doxee, which makes personalization and a customer-oriented approach the center of its business by enabling its customers to personalize messages for each user.
This new approach is becoming more and more vital for companies operating in the Utility sector: it is the most effective way to increase engagement, loyalty, and revenue with cross-selling and up-selling actions that are refined and well-targeted.
It is no wonder that companies such as Enel, Fastweb, A2A, and Engie have turned to Doxee to enhance their customer service and digitization processes. CIOReview recently included Doxee in the 2018 list of the 20 most promising technologies for the Utility sector.
5. An example – the video bill
The bill, until recently, was not seen as an opportunity for dialogue. Not by the end user, who received it in the mailbox, nor for the company, who used it as a simple tool for accounting and collection.
What was previously unimaginable is now possible. Bills can (and should, if you want to keep up) be transformed into multimedia, interactive tools that are opportunities for one-on-one dialogue with the customer, for retention, for and differentiation over competitors.
There is no more powerful medium for dialogue than video, and this is all the more so if it is personalized – as in the case of Doxee Pvideo® – and tailored in an omnichannel dimension.
In this way, the business can “explain” the bill, with the detail of each line item or expense, directly from the customer’s smartphone, where he can pay with a simple tap, view his history. The company can propose specific calls to action in the form of up-selling and cross-selling strategies that are customized for the customer’s profile, habits, and more.
Discover the value of video marketing, personalized customer care, and new digital revolution tools for the Energy & Utilities sector. Download the eBook: