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Glossary » Cross-Selling

Cross-Selling

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. 

Synonyms

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 effectively and in tandem.

Upselling and cross-selling are mutually beneficial when done properly, providing maximum value to customers and increasing revenue without the recurring cost and resources associated with populating and maintaining many marketing channels and attracting new customers. 

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. 

Optimize Value

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. 

Cross-Selling Techniques

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.

Educate Customers 

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 mentioned earlier, one way to cross-sell to clients is by offering additional products and services. For instance, if a business sells software, it may consider selling a complementary service or vice-versa. 

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. 

Offer Promotions

Much like the bundles and add-ons mentioned above, offering promotions is another effective cross-selling technique. 

If a company has a promotion for one of its services, then that is the ideal time to cross-sell to a client. This approach comes across as an attempt to highlight a sale rather than specifically targeting a client, so there is less inherent risk attached.

Automated Suggestions

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 Challenges

While there are numerous benefits associated with cross-selling, the sales technique doesn’t come without its challenges. 

Data

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

Technology 

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.

Customer Trust 

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. Campaignsbusinesses can push specific products and services to cross-sell to customers, for example a telecoms company may pitch entertainment packages to its network customer

6. Popular products – promoting best sellers and popular products are ideal to evoke a fear of missing out feeling to target customer

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. Experimentingbusinesses 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 is the Best Time to Cross-Sell?

In order to cross-sell successfully, it’s important to know when is the best time. If a company tries to sell to a client at the wrong time, it can damage the relationship with the customer moving forward or nullify the original sale entirely.

However, there’s no single approach, rule, or one-size-fits-all method that dictates the best time to cross-sell.

Only by remembering the central goal of cross-selling – to encourage a customer to purchase a product, solution, or service that complements the original purchase – businesses can time the sale just right and further support success. Simply put, the best time to cross-sell is when the sale makes sense.