Updated on 22/12/2022

Upsell and cross sell: two effective strategies

Upsell and cross sell are strategies of huge and proven effectiveness in all types of business. That’s why, today, they have also become fundamental for companies in the Utility sector.

The industrial sector of utilities and energy is undergoing an unprecedented phase of revolution. The liberalisation of the market, the changes in regulation, the powerful introduction of technology and digital transformation. And then – last but not least – customers who are no longer passive users, but increasingly demanding, informed people, who demand simplicity, transparency, rapid and effective interaction with companies: in short, they ask to be put at the center of the business, call for dialogue and personalization.

Those who deal with marketing and customer care within the Utilities can not ignore these huge changes (or, worse, be frightened). Penalty: stay one step behind. Losing customers, loyalty, positioning and credibility: therefore, losing revenue.

Behind each of these changes that the Utility Industry is experiencing there are huge opportunities all to be grasped: and you can do it by putting on track innovative strategies and as much as possible tailored to the customer. Of course you have to have your eyes open, and your gaze turned to the future: exactly the characteristics that a good marketer must have.

It is no longer a question of fighting over the very low price margins at which electricity, gas, water, the Internet or telephony are provided. Almost everything, today, is played on how you present yourself to your users, how you dialogue with them. We must never forget that we are talking about services that have a powerful impact on people’s daily lives.

To put it briefly: better customer service always translates into sales growth.

This is why, today, even in the Utility sector some strategies that until recently were the preserve of other industrial sectors, very different in constitution and objectives, come into play. These include upsell and cross sell. And they play a central role.

Cross-selling and up-selling defined

So, what does it actually mean to cross- or upsell to your customers?

Amazon, a giant that everyone looks at, attributes 35% of its revenue to its cross sell strategies. But what is it?

Of something very simple in reality, that exists – basically – since there is trade. This is what has been happening in McDonald’s restaurants for decades: order your sandwich and the salesman asks you if you want chips with a small surcharge. It is the best known example of cross selling; and it works. In simple words, cross sell techniques are aimed at selling products related to those that the customer already owns, or is about to buy.

Often the upsell is confused with the cross sell, but there are some decisive differences. The upsell, in fact, serves to sell a superior and more expensive version of a product (or an experience) of which the customer is already in possession; or – again – is going to buy. The famous “premium” versions.

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.

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5 Effective Methods for Utility Companies

And here, below, 5 concrete and effective methods, useful for those dealing with the Utility and Energy sector to develop sales through upsell and cross sell.

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.

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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.