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What is Cross-Selling?
The cross-selling technique is a way for sales reps to sell additional related or complimentary products, solutions, or services to a customer. It’s an extremely effective sales and marketing method, as it bypasses the need to attract and acquire new customers, instead, focusing efforts on encouraging an existing and happy customer to purchase another product or service.
While there are no direct synonyms for the term cross-selling, ‘aftermarket sales’ loosely denotes a similar technique, but instead, it focuses on cross-selling after a customer’s initial purchase, rather than something that happens at the time of purchase, which is slightly different.
Cross-Selling vs. Upselling
If cross-selling is the technique sales reps use to motivate customers to buy related or comparable products, then the upselling method is where the rep encourages the customer to buy a comparable product with a higher price tag attached to it. For example, if a customer at a coffee shop asks for a regular-sized coffee, and the barrister suggests they buy a large one for an additional dollar.
While these terms and techniques may appear very similar, they both offer their own set of benefits and can ultimately be used successfully and in tandem. Upselling and cross-selling are both highly effective when done correctly. Proper execution provides maximum value to customers while simultaneously increasing revenue – and this is without the recurring cost and resources that managing multiple marketing channels and attracting new customers can incur.
Benefits of Cross-Selling
There are many benefits associated with cross-selling:
Increase Revenue and Reduce Sales Costs
By motivating their existing customer base to purchase more products or services, businesses can create more efficiency within the sales cycle itself. Sales reps can increase order volume without the added hassle and cost associated with acquiring new customers.
Whatsmore, as businesses spend less on attracting new customers, they’re reducing their overall sales expenditure and marketing costs as a direct result.
Build Customer Loyalty
Customers who feel a stronger connection with a brand or business are more likely to purchase again and even recommend that brand to others, such as family, friends, and colleagues. When a business offers not just one, but several products the customer loves, they’ll become devoted to that business, saving the company money by reducing churn rates. Tactics such as ‘If you like this, you’ll love this’ are a great way for businesses to cross-sell and encourage customer loyalty.
Successfully securing a sale with an existing customer is 60-70% more likely to happen than if a company was to target a new customer altogether. This is why it makes more business sense to target existing customers to increase sales revenue. Providing familiar products to customers can increase the order value in the short term and the lifetime value of a customer in the long run.
In order to benefit from the results of cross-selling as outlined above, businesses can try out and utilize a variety of techniques to see what works best for them.
Some customers may not fully understand the value of a business’s product portfolio. They might realize that certain products are essential, but the advantages of these products may require more education to be understood fully. By providing information on related and complementary products, businesses can ensure the customer has the full picture before making a purchase.
By educating clients, businesses can illustrate the benefits of each product or solution and how they might apply to the client, this also helps to reduce cart abandonment and returns.
Sell Additional Products and Services
As previously mentioned, cross-selling is largely about offering clients complementary services or products. For example, when a customer is buying a mobile phone, additional products or services might be offered, such as wireless chargers, protective casing, or insurance.
Offering product bundles, add-ons, or ancillary products is another great way to cross-sell. For example, if a customer is looking at buying X product, and that product can be bundled with and complements products Y and Z if the business then offers a bundle to the customer that includes X, Y, and Z at a discounted price compared to purchasing all three separately, then a customer is more likely to complete the purchase as they got a better deal.
Much like the bundles and add-ons mentioned above, offering promotions is another effective cross-selling technique.
A company that is running a promotion has an ideal opportunity for cross-selling. This is because the promotion presents an opportunity to highlight a sale, rather than pushing a direct sale to a specific client. It is a low-risk, yet successful method.
This is a technique that takes care of cross-selling for a company. While the initial work is needed to set up which products complement which and so on, businesses can put a system in place whereby if a customer is looking at a particular product or solution, they are then shown other similar products via automated suggestions, without sales reps needing to intervene.
Cross-selling to a B2B audience can be a great way to retain customers and increase sales volumes, but like the B2C sector, businesses should approach B2B cross-selling with caution.
Here are some simple rules that companies should follow to ensure B2B cross-selling success:
- Don’t just focus on new business
The idea of B2B cross-sell is to increase order and sales volumes, and while many businesses focus their efforts on cross-selling to new business, sales reps should ensure they utilize their already-loyal customer base.
- Don’t expect that customers already know everything about the products and services
It’s better – and often much safer – to assume that a business’s current customers only know about the product that they have purchased, and not the ones they haven’t. Why? If a piece of middle or bottom-of-funnel content is shared with a customer as part of a cross-selling tactic – assuming that that customer already knows about the other products that are referenced within that content – and they have never heard of or even recognize the solution referenced, businesses are likely to get shut down immediately or simply ignored.
- Do leverage conversational messaging
Many B2B customers don’t appreciate the hard sell, especially when it comes to cross-selling. Even in the B2B space, businesses need to remember that it’s still a human being they’re trying to sell to.
One way to alleviate this is to speak conversationally with customers. Find out what their pain points are and how they are currently combatting those issues. Then, discuss other clients that have faced and resolved a similar issue with the help of another product in the businesses portfolio, and how the customer can do the same.
While there are numerous benefits associated with cross-selling, the sales technique doesn’t come without its challenges.
Businesses need to ensure they have access to accurate, real-time customer and product data in order to cross-sell efficiently and effectively. If data is incorrect, and a sales rep offers the wrong product at the wrong moment of the customer sales cycle, it can result in customer churn and ultimately, lost revenue.
Automation is key to leveraging cross-selling effectively. Not having the right technical systems in place to facilitate automation makes cross-selling an especially manual and repetitive task, that’s often prone to human error.
Most of the time, a customer needs to trust a company before making a purchase. While cross-selling targets existing customers, therefore customers have usually already made a purchase and inherently trust a company more, businesses still need to evoke a sense of trust and build a relationship with the customer. Getting the cross-sell wrong can – and often does – result in a lack of trust from customers toward a business.
Customer Product Knowledge
If a customer doesn’t have access to all of the relevant information regarding a product during a cross-sell, it can result in that product being returned and the customer having a negative experience with the brand. If a customer is making a purchase based on a business’ suggestion, that suggestion must be the right one to facilitate improved customer satisfaction.
Infographics, 1-pagers, case studies, and blogs are all ideal materials to make available and share with customers during a cross-sell, to ensure they have everything they need to make a well-informed purchase decision.
Knowing When to Cross-Sell in the Customer Journey
When done at the right stage of the customer journey, cross-selling can provide immense value to both the business and the customer it’s selling to. When done wrong, cross-selling can result in lost clients and lost revenue.
Knowing when is the right time to cross-sell is an art in itself. All historical customer data needs to be taken into consideration to ensure a sales rep is targeting the right customer, at the right time and in the right way, in order to ensure the highest level of success.
People Also Ask
What are the Types of Cross-Selling?
There are a few different types and ways to cross-sell, including:
1. Complementary items – where a product/ solution/ service complements another, such as offering training to a customer who is purchasing a new software or platform
2. Seasonal – for example, a back-to-school campaign may suggest buying a calculator to a customer purchasing school shoes
3. Data – using historical customer and purchase data better informs what a business should cross-sell and when based on previous purchase patterns and page visits
4. Promotions – this is where a company pitches products that are on sale
5. Campaigns – businesses can push specific products and services to cross-sell to customers, for example a telecoms company may pitch entertainment packages to its network customers
6. Popular products – promoting best sellers and popular products are ideal to evoke a fear of missing out feeling to target customers
7. Releases – promoting new products and solutions and including urgency factors such as ‘while stocks last’ and ‘limited stock’ can help to encourage customers to buy
8. Experimenting – businesses won’t know which cross-selling technique works for them unless they experiment, they should try out cross-selling different products with other products to see which garners the best results
What are Examples of Cross-Selling?
Below, are a few real-world examples of cross-selling in action:
1. When a fast food restaurant asks a customer: “Would you like fries with that?”
2. When an eCommerce website shows “customers also bought” and ‘frequently bought together’ messaging
3. When a mobile phone retailer suggests that a customer buys a new case for the new phone they are purchasing
4. When an electronics retailer offers gadget insurance with a new laptop purchase
When During the Sales Process should one Cross-Sell?
Good timing is crucial when it comes to successful cross-selling. Attempting to sell to a client at the wrong time can damage the future relationship with the client, or the original sale can be lost entirely.
However, there are no strict rules regarding the best time to cross-sell. It largely comes down to knowledge and experience.
By understanding the main goal of cross-selling, which is to persuade a customer to purchase a complementary product or service, businesses will be able to gauge where in the original purchase process the cross-sell makes the most sense.
Benefits to Cross-Selling through CPQ Software
Over and above the most obvious benefit of cross-selling – increased profit – cross-selling also helps businesses and their sales team build and sustain better working relationships with the customer. In the case that a customer genuinely sees the cross-sell as an opportunity to help them grow their business, they’re more likely to trust the service provider in the future.
Further, there’s a far higher chance of a business cross-selling to an existing customer than there is selling to a brand-new customer. With a CPQ system in place, tracking and cross-selling to a customer you have history with becomes almost effortless, as you’ll be able to monitor past purchases, needs and possible gaps in their business before they even notice them.
One of the most beneficial ways in which to focus on cross-selling is to invest in a CPQ solution that enables your team to set up opportunities for promoting additional sales or upgrading an existing order effortlessly. Another benefit to these solutions is that they allow you to present the customer with the price upfront which delivers a layer of transparency and trust between the two parties.
Customers are looking for partners who are one step ahead of them, looking for ways to make their lives easier and help them grow their bottom-line where possible. A robust CPQ solution allows service providers insight into their clients in order to pre-empt what they want before they ask for it.