The majority of people are familiar with the terms cross-selling and upselling from online shipping. Cross-selling or upselling are strategies that are used to increase sales through additional or higher-value offers. The notes: “Customers who bought this product also bought” or “Similar items from the manufacturer” are now standard in many online shops. In 2015, Amazon generated 35% of its revenue from 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 start explaining how to use the potential in Dynamics 365, it is important to distinguish the terms cross-selling and upselling from each other a little more precisely.
What is cross-selling?
Cross-selling (to German: cross-selling) is the technique of suggesting additional products to the buyer that match the product in the shopping cart. As a rule, these are products that complement the product in the shopping cart. For example, the right laptop bag is offered for the laptop or the matching headset for the smartphone.
What is upselling?
Upselling is about offering a higher-quality and therefore more expensive product in the same category. This can be the next better model with a smart TV for a TV, or the well-known maxi menu in a fast food restaurant. However, it is important not to scare off the customer with an upsell product that is too expensive. As a rule of thumb, the upsell product should be a maximum of 30% more expensive than the product the customer is interested in.
Create product relationships in Dynamics 365
First of all, the relationship between the products must be established manually. So far, there is no algorithm in Dynamics 365 that automatically recognizes these product relations, as is the case with Amazon, for example. That’s why careful care of the products offered is the basic prerequisite for cross-selling and upselling in Dynamics 365. However, we can assume that Microsoft, as part of its AI strategy, will sooner or later implement such an algorithm in Dynamics 365. Until then, the products have to be linked to each other manually.
To do this, you need to 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. Because this is a higher-value Dynamics 365 for Sales license with a higher price, the sales relationship type is Upsell.
There are two different choices for the direction:
- Unilateral
- Bilateral
Unilateral 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 the other way around.
Bilateral means that sales can take place in both directions. If Bilateral is selected as the direction for an upsell, the user will consequently receive an error message. After all, when we upsell, we try to sell a higher-quality product and not the other way around.
Afterwards, we would like to expand our product to include a cross-sell relationship. For this purpose, we select an Office 365 Business Premium license as the product to be linked. In this case, it is possible to select the Bilateral direction. Both products are independent, but are closely linked in the Microsoft world and complement each other with new functionalities.
Apply cross-selling and upselling in Dynamics 365
In order to retrieve the cross-selling or upselling products in an offer, they must be included in the price list that was stored in the offer. The background is the possibility of offering the same products at different prices. The price list specifies how many products are available to choose from and at what price they are offered.
If this prerequisite is met, the product can be marked and the previously created product relationships can be displayed.
If we add a cross-sell product, the offer is expanded by another product.
Conclusion of cross-selling and upselling in Microsoft Dynamics 365
The advantages of cross-selling and upselling are obvious. The acquisition costs can be drastically reduced because the customer has already expressed interest and an important psychological hurdle has been overcome. In the case of regular customers, cross-selling or upselling can also maintain the customer relationship.
However, some customers find cross-selling or upselling attempts annoying. A certain amount of tact should therefore be present when using the two sales techniques.
