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Opinion: What financial industry knows that small business should too

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Cross-selling is an incredibly effective sales and marketing strategy used by businesses to increase customer satisfaction while boosting revenue. But why is it that the financial industry seems to have mastered this tactic? The answer lies in the ability to understand customers – what they want and when they want it – and how to present further opportunities for them to get involved.

In the financial industry, the cost of acquiring a new customer is often 10 times the cost of retaining one, and the average spend of an existing customer is 50% more than a new one, according to an article by The Financial Brand. These numbers vary widely across industries, but no matter your business type or size, one of the most economical ways to invest your marketing funds is to market to customers you already have.

The power of cross-selling
Cross-selling is a sales and marketing technique that encourages customers to buy additional products or services related to those they have already purchased. This type of upselling can be incredibly effective because it allows businesses to capitalize on existing customer relationships and further increase their profits.

The financial industry has been particularly successful at this strategy because they are adept at understanding the needs of their customers and marketing additional products or services that may be beneficial for them. Banks use data analysis and insights into customer behavior to identify potential opportunities for cross-selling and strategically target those customers with relevant offers.

How to leverage
The key is leveraging data and insights into customer behavior in order to identify opportunities for cross-selling. By understanding your customer base – their wants, needs and behaviors – you will be better equipped to create targeted offers tailored to their interests. Additionally, you should strive to create a seamless shopping experience by integrating cross-selling strategies throughout your website or store, such as displaying related products alongside items already being browsed. Then, customers will be more likely to take advantage of any additional offerings presented during their purchase journey.

Developing a strategy
If you’re new to this concept, it may seem difficult to know where to start. However, by following these five steps, you can begin to develop a cross-selling strategy that’s effective and tailored to your business:

  1. Get to know your customers. Before you can cross-sell effectively, you need to know your customers inside and out. Take the time to understand their needs, preferences and purchasing habits, and use this information to identify products or services that would be a good fit for them.
  2. Train your employees. Your employees play a crucial role in the success of your cross-selling strategy. Make sure they understand the importance of cross-selling and are equipped with the skills and knowledge they need to sell additional products to your customers.
  3. Stay connected. By utilizing email, text and other communication mediums, there are opportunities to personalize your marketing message.
  4. Timing is key. You need to find the right moment to introduce additional products or services and ensure your customer feels comfortable making the purchase.
  5. Measure your success. Keep track of the number of additional products sold, the increase in revenue per customer and customer satisfaction levels. This information will help you refine your cross-selling strategy over time.

Finally, make sure you’re employing other strategies such as loyalty programs, special promotions and regular touch points with your customers through email and other mediums. Doing so will maximize customer engagement with your cross-sell offers while keeping costs low.

Cross-selling is an effective way to create a moat around your brand by providing customers with additional value beyond their initial purchase. By leveraging basic data and insights into consumer behavior as the financial industry does, small businesses can gain valuable insights into potential opportunities for upselling. Businesses can use this marketing strategy to create loyal customers who keep coming back for more purchases down the line – thus increasing sales over time while strengthening their overall brand image.

Chris Jarratt is chief creative officer and co-founder of Revel Advertising, specializing in the strategic development, design and stewardship of brands. He can be reached at chris@reveladvertising.com.

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