In this tutorial, we'll explain cross-selling, a popular sales and marketing strategy, and show you precisely how to apply it in your company to enhance sales, which may raise customer lifetime value.
There are several strategies to increase your company's income. You can launch new products, provide more services, or even boost pricing. But how you market your products to current and existing clients is one of the best methods to boost income.
What is cross-selling?
Cross-selling is a sales and marketing strategy used to encourage customers to spend more by recommending products that are connected to or supplemental to the ones they are already buying. A relatively low-lift strategy for raising revenue per order is cross-selling.
Cross-selling is frequently seen when someone buys a suit. Suits are famously pricey and rarely bought daily. The stakes are often high whether someone is purchasing a suit for a wedding, burial, or a crucial work presentation.
Cross-selling in this case would mean suggesting an additional purchase of a tie to go with the outfit. An extra purchase that raises the outfit's worth is a fine tie that matches the suit. Both the business and the person benefit from it.
Another example would be going to buy a new automobile. By recommending appropriate add-ons to your initial purchase, dealerships get a sizable amount of additional cash. For instance, the dealer may advise installing a new sound system or upgrading the material of the driver's seat when you buy a car.
When the extra purchases are modest in proportion to the first purchase, cross-selling is more beneficial. Spending a few hundred dollars more on extra functionality or perks, for instance, won't likely be resisted because a car is a substantial investment. A vendor of electronics will frequently advise getting an extended warranty to cover a new phone or computer, for instance.
It's crucial to remember that cross-selling doesn't always entail recommending cheap add-ons or products to earn a fast profit. When done well, cross-selling should raise both new and existing clients' satisfaction levels while also increasing revenue.
Examples of cross-selling promotions
According to reports, cross-selling through Amazon's “Customers who purchased this item also bought” and “Frequently bought together” choices on each product page account for up to 35% of its sales. With that strategy, a store may encourage a current consumer to purchase a complementary—or essential—item.
How then can you implement a such cross-selling strategy? Here are some examples.
Examples of cross-selling include:
- An electronics store salesperson advises a customer buying a digital camera to also get a memory card.
- Would you like fries with that, the cashier at a fast-food restaurant asks a client.
- An ecommerce site's checkout form invites customers to add a popular related product or a necessary component that is not included in the product they are purchasing as they approach the purchase phase of the customer journey.
- When buying a new vehicle, a new car salesperson may advise the customer to install a cargo liner or other aftermarket product.
- A whole outfit is displayed by a clothing store so that customers may see how the parts go together and purchase the entire outfit rather than just one piece.
A common cross-selling strategy in the world of ecommerce is to have a pop-up window appear after a purchase is placed, typically offering an extra relevant item at a slight discount. Again, cross-selling initiatives don't have to come across as forced or excessive. You don't want to compromise cross-selling to have a negative impact on the customer journey.
Cross-selling initiatives and best strategies
Keep in mind that cross-selling should increase rather than decrease consumer pleasure. The following are the top cross-selling strategies:
- Provide the component needed for the purchased product to function properly or be used, such as a power cable for a computer printer that doesn’t include one in the box.
- Combine related products so that the consumer won't have to search for missing parts or accessories.
- Offer reduced pricing on a package of products to stimulate quick purchases with a short-term price reduction.
- Show how the supplementary products integrate with the purchased product.
- By addressing any consumer concerns throughout the cross-sell interaction, you may make it simple for the client to respond “yes“. For instance, by recommending that guests split a dessert after displaying the dessert tray, the server can get beyond the phrase “I shouldn't“.
Cross-selling in an ecommerce setting entails locating relevant products and developing pertinent offers, but cross-selling in person may need training on efficient strategies. However, the objective is the same in both situations—to make more money for the company while fostering client satisfaction.
Cross-selling is an efficient technique to increase sales and maximize profits.
It's not every day that a marketing and sales strategy can be applied to almost any organization. However, when it comes to cross-selling, most organizations may reap significant benefits when they implement it into their marketing plan. If boosting income is a primary aim for your company, it's worth a shot. Use the examples of cross-selling provided above as a starting point for implementing cross-selling in your own business—you'll be glad you did.
There are various strategies you may use to increase the effectiveness of cross-selling. First, don't cross-sell right away.
Consider employing an email drip campaign to present related products and services regularly and keep customers engaged.
Second, wait until you have established a relationship with the consumer and demonstrated success. Once trust is formed, the buyer is more inclined to purchase your products in the future and is poised to buy other ones.
Finally, ensure that your products and services are in line with the customer's objectives and aspirations. Offering something that serves no use is inefficient and can reduce consumer satisfaction.
Cross-selling has numerous successful examples. Here are a few examples: a fast food establishment would inquire when a customer ordered a hamburger, “Do you want fries with that?” a salesman advising customers to purchase a tie along with a suit. a business selling gadgets asking if you want to buy an extra warranty for your computer or phone.
Cross-selling strategies can be used in many different contexts, but they virtually always take place after the customer has made a purchase. A pop-up suggesting a supplemental product after your original purchase is rather typical in ecommerce. Another strategy is to send an email to a consumer after they've made a transaction enticing them to buy an additional connected product or service.