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Increase Your Sales with Cross- and Up-Selling in Microsoft Dynamics 365

Increase Your Sales with Cross- and Up-Selling in Microsoft Dynamics 365

Most people are familiar with the terms cross-selling and upselling from online sales. Cross-selling and upselling are strategies that are used to increase sales through additional or higher-value offers. The references: "Customers who bought this product also bought" or "Similar items from the manufacturer" are now standard in many online stores. In 2015, Amazon generated Amazon generated 35% of its turnover with cross-selling. Although no current figures are available, it can be assumed that the strategy is similarly successful today. After all, Amazon is one of the most valuable companies in the world. Before we begin to explain how you can use the potential in Dynamics 365, it is important to differentiate between the terms cross-selling and upselling.

What is cross-selling?

Cross-selling is the technique of proposing additional products to the buyer that match or complete the product in the shopping basket. As a rule, these are products that complement the product in the shopping basket. For example, the matching laptop bag is offered with the laptop or the matching headset with the smartphone in the basket.

What is Up-selling?

Upselling is about offering a higher-value and therefore more expensive product in the same category. This can be the next better model for television with a smart TV or the well-known maxi-menu in a fast-food restaurant. However, it is important not to scare customers away with an overpriced upsell product. The rule of thumb is that the Upsell product should not be more than 30% more expensive than the product the customer is interested in.

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Up-selling, cross-selling

Creation of product relationships in Dynamics 365

The first step is to manually create the relationship between the products. So far, Dynamics 365 does not have an algorithm that automatically recognizes these product relationships, as is the case with Amazon, for example. Careful maintenance of the products on offer is therefore the basic prerequisite for cross-selling and upselling in Dynamics 365. However, we can assume that Microsoft will implement such an algorithm in Dynamics 365 sooner or later as part of its AI strategy. Until then, the products will have to be linked together manually.

To do this, you must open the desired product and add a product relationship.

Our product is the Dynamics 365 for Sales Professional license. We link this product to the Dynamics 365 for Sales Enterprise license. As this is a higher-value Dynamics 365 for Sales license with a higher price, the sales relationship type is Upselling.

There are two different options for the direction:

  • Unilateral
  • Bilateral

Uni-Directional means that the sale can only take place in one direction. It is possible to offer the Enterprise license as an alternative to the Professional license, but not vice versa.

Bi-Directional means that the sale can take place in both directions. If Bi-Directional is selected as the direction for an up-sell, the user receives an error message. After all, we try to sell a higher-value product with an up-sell and not the other way round.

Afterwards, we would like to extend our product by a cross-sell relationship. To do this, we select an Office 365 Business Premium license as the product to be linked. In this case, it is possible to select the direction Bi-Directional. Both products work independently, but are closely linked in the Microsoft world and complement each other with new functionalities.

Application of cross-selling and upselling in Dynamics 365

To be able to get the cross-selling or up-selling products in a quotation, they must be included in the price list stored in the quotation. The background to this is the possibility of offering the same products at different prices. The price list specifies how many products are available and at what price they are offered.

If this condition is met, the product can be marked and the previously created product relationships can be displayed.

If we add a cross-sell product, the quote is extended by another product.

Conclusion of Cross-Selling and Up-Selling in Microsoft Dynamics 365

The advantages of cross-selling and up-selling are obvious. Acquisition costs can be drastically reduced as the customer has already expressed interest and an important psychological barrier has been overcome. In the case of regular customers, cross-selling or up-selling can also maintain the customer relationship.

However, some customers find cross-selling or up-selling attempts annoying. A certain intuitive feeling should be therefore present if the two sales techniques are used.

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