Mastering Cross-Selling Metrics #10

About Jugal Bakers, Ghaziabad!

Jugal Bakers, located in Ghaziabad, is one of the prominent bakery players in the NCR region. They have been in food processing industry since 1975 and major products are rusk, breads, muffins, cakes, cookies and namkeen to a growing number of bakeries, supermarkets and food service customers.

What is Cross-Selling metrics? 📊

Cross-selling is the practice of selling complementary or related products to existing customers. It helps you to sell additional products to existing customers that helps you to enhance their primary purchase and increasing your sales.

How Jugal Bakers got the inspiration?

Jatin Sachdeva, owner of Jugal Bakers, observed that companies like Amazon and Apple are very effective in using cross-selling techniques. They were highlighting “Frequently Bought Together”. But the question was how to use in his business to take advantage of this technique.

They started defining this metric and created a system to measure the same. First, they prepared the list of all combo products like muffins & cakes, cookies & namkeen. They started preparing a list of customers who were frequently buying combo products and a list of customers who were not buying combo products.

After preparing this list, they sent their sales team to a few customers with the focus of cross-selling and identifying other brands that their customers were purchasing. They were surprised to learn that within existing customers there was so much gap and competitors were taking advantage as they were not focusing on this metric.

Using Data Analytics, they were able to identify their customer’s trends and preferences. They also trained their sales team to suggest relevant complementary products. Segmenting their customers helped them to understand the needs of each segment and use this technique effectively.

With this insight, they started measuring this metric weekly to understand the effectiveness.

The 3 elements that they covered in cross-selling metrics were:

1. Increase in Average Order Value of each customer.
2. Monitor the conversion ratio of the recommended products.
3. Cross-Sell Ratio to refine the combo products definition.
   

What is the impact on Sales without increasing cost?

1. Cost-Effective Revenue Growth - Selling to existing customers is often more cost-effective than acquiring new ones. This helped in both Top Line and Bottom Line.
2. Increase in Customer Loyalty – Selling relevant products that address customers' needs and contribute to their sales helps keep customers loyal for longer periods of time.
3. Improves Inventory Turnaround – Cross-Selling helps you manage your stock more effectively. It frees the capital locked in unsold stock.
4. Enhancing Average Order Value - By recommending related products, you can increase the total value of each transaction. For example, a customer buying a laptop might also purchase accessories like a mouse, keyboard or software.

Whenever You are Ready! 🔑  

Your metrics don't just reflect the past; they lead the future.

At Magenta, we specialize in turning these metrics into actionable steps.

Our Business Intelligence software seamlessly integrates with ERPs like Tally, Busy, SAP, Align Books, and can help you cross-sell your combo products by providing you ready list of all customers who have purchased X product but not Y. If you haven't already signed up for Magenta Insights, now is the time!  

Stay tuned for next week's edition of "One Metric for Growth" as we delve into another crucial aspect of business. Until then, seize the opportunities that lie within your data!