How to Use SMS to Upsell and Cross-sell

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. 

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Upsell vs Cross-sell 

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Upselling 

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: 

• Avoid recommending a product or service that is significantly more expensive than the product being purchased.  
• Don’t be too pushy or aggressive. Accept “no thank you” as a response. 
• Focus on the customer’s needs and how the value-added offer will help meet those needs. 
• Upsell when possible and appropriate, so no opportunity is missed.
• Offer side-by-side comparisons so the customer can see the value in the premium version. 
• Educate the customer as part of the upsell so the customer understands the risk of not taking advantage of the offer.
• Offer an in-the-moment-only discounted price to encourage the customer to make an immediate decision.   

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Cross-selling 

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. 

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How to Use SMS to Upsell and Cross-sell 

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Customized Discount Codes 

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: 

• "Thanks for shopping with us and getting your very first pair of our jeans! As a thank you, here’s a code for 25% off your next purchase.” 
• “Now that you have tried (and are hopefully loving) the tea you got, ready to try another flavor? We are giving you a limited-time 20% promo code for your next purchase.” 
• “You’ve got great taste! The Cozy Sweater is the perfect fall staple. Still searching for more fall pieces? Here’s 20% off to help you build the perfect wardrobe.” 

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Product Suggestions 

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. 

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Subscription Offerings 

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. 

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Convert Abandoned Checkouts 

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:

• Send tailored, personalized texts to customers 30 minutes after every cart is abandoned to understand why they didn’t buy.
• Answer all the common questions that make customers hesitate—such as shipping, fit or measurement, and other product-specific queries. 
• Offer a small discount, typically in the form of free shipping, to seal the deal.

Brands that have implemented cart abandonment live agent recovery have seen: 

• 6.4x more abandoned checkouts recovered — representing over $289,000 in revenue.
• $30k of lost revenue recouped in a matter of months.
• 117% increase in revenue from recovered checkouts.

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”. 

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The Power of SMS 

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. 

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Want to learn other ways to use SMS to improve your CLTV? Click here to read more!

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