What is Cross-Selling? How to Build Cross-Selling strategy?
Have you ever started shopping, only find yourself buying items totally unrelated to what you originally intended to purchase? Whether you are tempted by a clever salesperson or a carefully placed advertising, there is a good chance that you are under the influence of cross-selling.
Cross-selling is a sales tactic used to maximize the value of a purchase as well as improve the customer’s buying experience by creating additional value.
Needless to say, that excellent strategy has proved its effectiveness for years, even in traditional sales channels. But, in the world of eCommerce, what we can get from cross-selling perhaps is more than expected.
In today’s post, I am about to break down general concepts, from the very first definition to useful cross-selling techniques that you can flexibly adapt. Now, stay tuned with my post to refresh your knowledge about this topic and be prepared to experience the dramatic increase in your sales.
Table of content
- What is cross-selling?
- The benefits and drawbacks of cross-selling
- Benefits of cross-selling
- Drawbacks of cross-selling
- 5 popular cross-selling methods
- Steps for cross-selling to customers
- Cross-selling techniques
What is cross-selling?
As I mentioned above, cross-selling involves selling supplementary products or services related to what is being bought already. More than an idea to make the customer buy more than he thought he could, cross-selling helps shoppers discover other products they might need and provide a pleasant shopping experience.
Although cross-selling looks different across business sectors, one thing all cross sales should have in common is this profit-increasing tool helps to enhance value for the customers.
We have experienced what is cross-selling in our real life. For example, an electronics retailer may recommend a computer case, mouse, screen cleaning wipes to a customer who already purchased a new laptop. Or a clothing retailer displays a complete outfit so the shoppers can see how pieces fit together and buy all the items instead of just one.
The benefits and drawbacks of cross-selling
With the original idea to boost sales by exploring customer’s wants and needs to purchase more items, cross-selling undoubtedly result in both positive and potential negative consequences.
Benefits of cross-selling
When it works correctly, cross-selling is undoubtedly great for both business and customers. That is the reason why many retailers and e-commerce stores rely heavily on this sale tactic.
Cross-selling adds more to the revenue
Because cross-selling increases sales by making customers buy more than they thought they would, it also increases the lifetime value of the customers for the online stores.
Lower selling cost
Selling cost accounts for a large proportion of the business expense. Every business spends more to attract new customers as well as boost their sales revenue.
Thanks to cross-selling, such an investment cost, especially marketing cost, is reduced significantly to a large extent. Because this technique aims to make existing customers purchase more and different products of stores, less effort and money are necessary to introduce products to familiar customers or acquire and attract new clients from outside.
Enhance customer loyalty
Customer loyalty is one of the keys to business growth in the long run. Through this technique, the business tries to convince its existing clients to use more of its products or services.
Cross-selling helps to introduce all related products and complimentary to customers at the ideal point when they are not aware of a product or service that would improve their shopping experience. Consequently, such a right time suggestion level up customer’s satisfaction and develop a sense of loyalty in them.
Develop a better comprehension of customer
Cross-selling plays a vital role in establishing a better relationship with customers. Through cross-selling, businesses can see customer’s purchasing behaviors in their stores as well as acquire all relevant and required information from them.
After analyzing these collected data, which truly reflects the customer’s needs and wants, businesses can adjust their policies to serve them better. We may say that this useful practice will effectively assist online merchants in building a long-standing relationship with customers.
The increase in referrals is one of the beneficial results of cross-selling that is merely noticed. In fact, when customers purchase and use more products from a firm for a long time, they tend to develop confidence and start promoting these products by referring to their friends, relatives, etc. This is the way that businesses increase their referrals and customer base via cross-selling.
Help customers shop with convenience and flexibility
In these days and ages, making customers happy and comfortable with the service is always at the top of any business’s priority. With cross-selling, all products of one brand are well introduced to customers. Therefore, they do not need to search for somewhere else for fulfilling their demands while enjoying sweet discounts coming along when buying several items at a go.
Drawbacks of Cross Selling
While cross-selling is practically useful for generating more sales, it does have disadvantages and risks which need to be eliminated by well-thought strategies.
Cross-selling is an approach that involves walking the fine line between helping a customer and being pushy. If used correctly, it enhances the customer’s experience because he benefits from added value delivered from the bigger buy. But if the sales rep does not approach customers in a proper way like being too aggressive and not asking questions before trying to push unnecessary products, he definitely comes across as pushy. This practice perhaps ruins all efforts to retain customers and establish loyalty.
For example, promoting winter clothing to a customer who has just bought a bathing suit is not a proper sale practice. When the product makes no sense, the recommendation will drive customers away because they fell annoyed and unpleasant with too much advertisement.
Pressure on employee
From the employee’s perspective, cross-selling is not always appreciated. That is because some customer types can put stress on service staff, whether by returning or canceling a large number of goods and services or withholding spending in other areas to spend on your cross-selling promotions.
In a nutshell, these potential drawbacks can not outweigh the benefits of cross-selling. It is crucial to analyze associated customer data and metrics before deploying any cross-selling campaign.
Building a successful cross-selling strategy is not simple; it is complicated. However, do not skip my post at this point. I am about to give you the information that is really necessary for building a successful cross-selling campaign.
5 Popular Cross-selling methods
There are so many ways to cross-sell. The following are typical approaches that any business can take advantage of
Suggest additional services
Offering additional service is one way to cross-sell. For instance, if you sell software, you may consider selling a complementary service or vice-versa.
Provide complementary items (bundle sales)
In the Frequently Bought Together section, you can recommend customers products that come in a group or have the best discount value.
Make data-driven suggestions
By looking at the client’s previous interaction with your website and purchase that they have made, you can attract buyers in further purchasing, or makes it easy for shoppers to find other products.
Promotion is an ideal time for cross-selling, and customers regularly buy more when it comes to have a discount on-site. Rather than specifically targeting clients, this approach comes as an attempt to highlight the sales across a wide range of products. By encouraging customer’s consumption, online stores, and sell more and gain more benefits.
Have you ever thought that educating customers will be useful for your cross-selling strategy? In fact, some clients may not fully understand the function or the value of your product or service. By providing more information such as ebooks, related blog posts,etc., you can illustrate the benefits of each product or service and how they might apply to your customers. One they can see how each service can benefit their business; they are likely to come ahead with more additional work.
Steps for cross-selling to customers
A cross-selling plan can not be possible without following specific steps. Now, I am going to analyzing these steps one by one.
For the first start, you need to identify what is suitable for cross-selling.
Before you can convince your customers to respond to cross-selling efforts, you need to figure out which products and services go together. Let’s answer these questions:
- What do customers usually buy as add-ons to their shopping?
- What items are usually purchased together?
- What items have been successful in previous cross-selling campaigns?
Solid data makes all the difference!
The answers for such questions can be found from in-person and digital communication that your company has had with customers, their purchasing, or browsing histories.
I would say that identifying products for a cross-selling campaign might decide more than 50 % of its success. Bring what is meaning to your customers, or you will end up with a mess.
Secondly, you should identify who is ready for a cross-selling
Actually, not everyone is ready to buy an add-on. Remember that introducing a list of products to a customer who does not show any interest in them is no more than annoying them. Therefore, categorizing customer’ s data and their interaction on your store will reveal who is the best candidate for a cross-selling campaign.
I believe that sales and marketing software with effective tools, such as CRM integration or AI-assisted sales analytics, will help you to approach the right customers.
Lastly, it is time to develop a cross-selling campaign and customer journey.
Once you have defined your target customers and suitable products, you are about to convert them. Then, you need to figure out how to present the potential cross-sales to get as many customers as possible. Cross-selling ads appearing in the checkout page or email campaigns targeting those who recently purchased your item is the typical solution for you to think about.
At this stage, you may look for the support of recommendation tools, which can help you to display related products that have been seen or purchased recently with ease.
Now, you have followed all three essential steps to build your cross-selling plan. However, that is not enough! You still need to have fantastic techniques to make the whole plan completed.
Here are some advice and technique that is helpful for you:
Provide customers with additional products that genuinely offer them the added value. Remember that a well-placed offer is much more valuable than a range of offers that are meaningless to the relationship between your business and your customer.
Offer a discount on the bundled items to encourage immediate purchase. The promotion program always attracts customers, and then any discount will bring a sense that they are getting more benefits while saving their budget.
Keep track and find customer’s touchpoints on their shopping journey. Depending on how customers shop for goods by using cross-selling emails or visiting a store in person, you can approach to market your additional product accordingly.
Take advantage of your existing inbound marketing to promote supplementary products and services. For instance, if you have content targeting an audience who buy high-end clothing, you can include ads for jewelry on your blog posts and product description to cross-sell.
Make use of your customer’s data effectively. The customer’s data can be used flexibly throughout the cross-selling process.
Demonstrate the benefits of additional products or how it works with the being purchased product. The customer will not buy something that they have no idea. The more customers understand about your product, the quicker they come up with the buying decision.
Encourage cross-sales by creating interaction between clients. If you are having a certain number of customers, you can establish an online community, in which they can exchange and recommend your products for each other. With this technique, you save a great deal of time and effort for marketing.
Apply social selling techniques, such as social media influencers. By offering incentives for an influencer who has a high profile and lots of followers on social network channels., your supplementary products can be widely promoted.
With the right approach, cross-selling will be a crazily effective tool to boost your sales revenue. We hope that you can adapt suggested cross-selling tips and make your own formula.
While you should take advantage of potential cross-sales, it is also essential to use tools for product recommendation in a way that benefits your business and your customers.
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