How to Use Personalized Upselling and Cross-selling to Increase Member Retention?
Acquition Growth Retention
As soon as the word “upselling” and “cross-selling” surface in a conversation, you might begin to imagine a pesky salesperson trying to thrust extra stuff onto you that you don’t need. Quite a spoiler, isn’t it? Unfortunately, it sometimes happens too.
But most often, successful upselling and cross-selling are indicators of happier, more satisfied and loyal gym members/subscribers. In fact, upselling and cross-selling, if done right, can give your fitness brand an edge in today’s competitive marketplace. It can help you build deeper relationships with members thereby improving revenues, reducing churn and increasing retention rates for your fitness brand.
Don’t believe us? The numbers speak for themselves.
According to Marketing Metrics, the success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customer is only 5-20%.
It’s a win-win!
Now let’s think like members. Wouldn’t we much rather stick around longer with a fitness brand that we already trust than one we’ve never engaged with earlier?
All you need to make your member understand is that “upselling” or “cross-selling” an offering will help accomplish their goals faster or avoid their toughest challenges, and if they win, so will your brand. They get better stuff, you get more cash. And, here’s the kicker: It’s not a sales tactic, but a member happiness tactic. Simply put, it’s a win-win for you both!
Fitness brands can expedite time and path to profit by upgrading current members or upselling to them. It’s a magic formula to increase the lifetime value (LTV) of your members and grow your bottom line exponentially.
Use creative fitness product bundling techniques
Your members are fitness enthusiasts, craving to see faster fitness results. For that, they’re even willing to pay a little extra. Let’s assume you’re able to devise an excellent long-term fitness program tailored to your client’s requirements. As a part of your upselling strategy, you can offer them add-ons (like extra weekly sessions in the first two months, nutrition coaching, supplements, etc., that can expedite their fitness results.
Recommend premium and complimentary fitness products
This is a good upselling tactic.
You can leverage a good customer intelligence platform that will help you recommend premium offerings to gym members. But more importantly, you need to make them understand the difference between your premium offering and your regular products. Additionally, there are complementary products that can be used alongside main fitness products
The key here is to convince them to spend extra money to enjoy added value from premium products. And, the perfect time to do this is right after your members have made a purchase. Future upselling opportunities are also available on special occasions such as holidays, fitness milestones, membership retention offers and when you have a new service/offering to introduce.
Remember – Aim is to add value to the purchases made by your members. So, put your members’ needs first and then upsell or cross-sell.
Improved LTV, Retention, Revenue and Growth
Let’s say an average LTV for a fitness club is $50. And, the cost to win a new customer (CAC) using online marketing channels is $60. This fitness studio would be losing money. Why? It’s not making enough on its current members to acquire new ones.
To succeed in this competitive space, you need to have better LTV as it would result in better retention and growth of your fitness brand.
As a mantra to increase your LTV through upselling and cross-selling, you need to:
- Learn to actively listen to your members’ feedback and experiences in the phygital world. Any customer service gap would result in member churn, which obviously you wouldn’t want. This would also help you identify the opportunities, where you can slip in your offerings to upsell and cross-sell.
- Construct a response model: Train your system to respond dynamically, not linearly, to members’ feedback and segment them on select variables, which would determine your upselling or cross-selling approach.
- Stack up recommendations: Your recommendation repository must have the right balance of options, personalized to each members’ specific needs and preferences as too many would cause decision paralysis, while too few would confine choices.
- Make it financially reasonable: You need to ensure that upsell must not increase the cost by 25% and cross-sells not by 60%. Hence, we recommend you optimize the costs accordingly.
Delivering Personalized Upselling at Scale
Since your member pool comprises Gen Z, millennials, baby boomers, etc – all with a different set of behavioural patterns, your upselling and cross-selling strategy should be personalized. But, is personalization possible for each of your gym members, especially if you’ve hundreds or thousands of them?
You need a member engagement platform, like CIPIO, that understands your members and their behaviours in detail. Based on this contextual intelligence gathered, such a platform can provide specific predictions and recommendations to cross-sell and upsell your fitness brand’s products and services to the right members at the right time.
Interestingly, these recommendations are not simply parked within the platform. But with one click of a button, you can export them to your engagement systems like Marketing Automation, In-App notifications, OTT platform, etc. Such a platform would also measure the impact of this strategy on your bottom line.
We hope that the tips shared above will help you craft a compelling upselling and cross-selling strategy that would improve your LTV, profit margins, revenue and growth while keeping your existing members happy and satisfied over the years.