Customer expansion is a process of generating maximum value for current customers and encouraging them to purchase more. It enables brands to retain customers and save costs on customer acquisition.

In this article, we’ll cover the importance and 3 types of customer expansion. We’ll also review how to use customer expansion to increase sales.

Why is customer expansion important?

Companies spend a lot of money to acquire new customers and boost their revenues. Yet if you have an established company, many cost-effective strategies will help you get most of your existing customers. As a result, your sales volume and profits will increase. Customer expansion focuses on creating more value for current consumers and encouraging them to perform more purchases and use a product or service regularly. If you succeed with your customer expansion strategies, you’ll retain existing customers and avoid spending costs to acquire new consumers.

To increase revenues, you need to ensure a seamless customer experience, improve customer satisfaction, and provide additional value to your clients. You can hook your users’ attention with an upgraded version of your product, complementary products, or additional features for subscription-based services.

Now that you know the importance, let’s dive into the 3 types of customer expansion.

3 Types of Customer Expansion

We can distinguish three main types of customer expansion:

  • add-ons (a company offers additional features to improve product customers already use);
  • upselling (a company encourages customers to buy a more expensive premium version of the chosen product or service);
  • cross-selling (a company offers complementary products to a chosen item).

Let’s take a look at each of them in more detail.

Add-ons

It’s a great idea to use add-ons if customers already use your product. You can provide users with the opportunity to upgrade a product by purchasing add-on plans.

Below you can see Zoom’s optional add-on plans.

Zoom

Source: Userpilot

Upselling

Upselling is an excellent sales technique that helps you find out more about your clients’ needs to provide them with the best solution to reach their goals. After exploring consumers’ preferences and desires, a salesperson contacts customers and offers an upgrade or premium version of a product or service. If you succeed in providing the solution people are looking for, you can establish strong relationships with customers and boost sales.

For example, Tesla allows clients to make custom orders. For an additional cost, you can choose wheels and autopilot features.

Tesla

Cross-selling

Cross-selling implies offering products related to an item customers want to purchase. When current clients see complementary products, especially with a discount, they consider buying them together.

For instance, Amazon encourages customers to purchase complementary items, which users can see under the main product card.

Amazon

Let’s explore some effective customer expansion techniques to increase sales.

How to use customer expansion to boost sales?

To increase your sales volume and profits, you need to select productive approaches to reach customers and make them engage. We’ve prepared several techniques for you to consider.

  • Drive fear of missing out. Marketers use different FOMO techniques to signal customers to shop for limited offers as soon as possible. You can set time limits, offer product bundles, use several channels to push consumers towards purchasing. These methods appeal to customers’ desires and evoke the feeling of regret if they don’t buy something. This way, you can boost sales in a short period of time. If you succeed in creating a proper message and offer, consumers will make impulse purchases.
  • Provide customers with trials of premium features. Sometimes the most effective way to make users upgrade a product or service is to offer a free trial of these premium plans. Once your clients try, they can know the value the plan brings and the benefits they obtain. After the free trial expires, they can purchase your premium plan to reach their goals.
  • Update customers on your new products and premium plans. If you have some new products or plans, you should inform your customers. When they explore your new products, they can purchase or upgrade their plans to more expensive ones with more features. Use social media networks, send email campaigns, implement web push notifications, and chatbots to reach your audience.
  • Send email campaigns to upsell. If you want to upsell, consider email marketing. Research consumer needs before sending email campaigns. Once you do it, you can notify customers about your offers. With SendPulse, you can create professional email campaigns and send them to customers on your list. You can choose one of the available email templates or create one from scratch in our drag-and-drop editor.

Congrats, now you know a cost-effective way to boost sales. Make use of the techniques above to increase your company’s profits.

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