Cross-Selling

Chapter 01: Cross-Selling

What Is Cross-Selling?

Have you ever started shopping, only to find yourself buying items completely unrelated to what you originally intended to purchase? Whether you were tempted by a clever salesperson or a carefully placed ad, there is a good chance that you were influenced by cross-selling.

Cross-selling is a sales technique used to get customers to spend more by purchasing a product that’s related to what is already being bought. For example, if a customer is buying a bookshelf, you could suggest she also buys a lamp. Or, someone is buying a new basketball could be influenced to also buy an air pump.

Benefits of Cross-Selling

With big companies like Amazon attributing 35 percent of its revenue to cross-selling, it is no secret that this technique can dramatically increase your bottom line.

The benefits of cross-selling include:

  1. Customer retention: The best way to guarantee that your business stays profitable is to retain past customers. Cross-selling is highly personalized and actually provides value to customers, helping to strengthen that relationship.
  2. More profitability: When you sell more, you make more. With cross-selling, even if the second item is added on by the customer at a discounted rate, you are increasing your sales and your overall profitability as a company.
  3. Improved customer experience: Cross-selling is all about convenience and flexibility. Customers don’t want to search and scroll for hours to find the items they’re looking for. If you can present curated products based on their past shopping behavior, you can create an irresistible customer experience.

Upsell vs Cross-Sell

While upselling and cross-selling are related, they are two completely different sales techniques. Here’s the difference between these two strategies:

  • Upselling: Upselling is about “upgrading” a customer’s original purchase to a newer, higher-ticket product. For example, if a customer was planning to purchase a 16GB smartphone, but thanks to discounts or effective merchandising, instead buys the 32GB version.

  • Cross-selling: Like upselling, cross-selling results in a higher purchase amount. But, cross-selling focuses more on accessorizing or complementing a purchase rather than replacing it. Using the same 16GB smartphone scenario, an example of cross-selling would be motivating the customer to also buy a case for the new phone. Cross-selling is more often accepted by customers, as they can see the value of the purchase suggestion and how the additional item(s) can directly benefit them.

How Does Cross-Selling Increase Revenue?

At a high level, it’s easy to understand how cross-selling can increase revenue (after all, more items in the cart equals more money). But, motivating customers to make extra, unplanned purchases is easier said than done.

How can you ensure that your cross-selling efforts are successful? Here are three tips:

  1. Targeted audience: With cross-selling, you are able to reach a very segmented portion of your audience. This customer segmentation helps you better communicate the products you are trying to sell, resulting in a higher conversion rate.
  2. Product relevance: You should only cross-sell products that make absolute sense to your customer’s needs. This relevancy leads to more trust and increased sales.
  3. Peak timing: Since cross-selling only occurs when customers are already prepared to make a purchase, you reach them at a time they are most willing to “add on” an item.

How to Improve Cross-Selling

Just like any other sales strategy, your cross-selling plan should be monitored, analyzed, and tweaked. When working to improve your cross-selling technique, keep these three best practices in mind:

  1. Get to know your customer: Cross-selling works the best when you truly know your customer and can do the thinking for them. Make the time to understand your customers through surveys or individual outreach so you can better serve them when the opportunity arises.
  2. Offer discounts: If customers aren’t reacting to your cross-selling efforts, try bundling the suggested items with a sales promotion. Over time, once customers know they can trust you to recommend additional items, the discounts won’t be as necessary.
  3. Use email automation: Automated emails that suggest items related to a customer’s cart or that follow up after an abandoned browse can help you scale your cross-selling.

Final Thoughts

Cross-selling is a powerful way for you to become the go-to expert in your industry. When you offer smart additions to your customer’s cart, your cross-selling strategy becomes a helpful, beneficial tool, rather than just another way for your business to make a quick dollar.

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