- Cross-selling encourages customers to purchase additional products and services, increasing their average spend
- Upselling and cross-selling techniques can both improve your sales revenue, but cross-selling always involves buying two or more products or services
- Make your cross-selling efforts count by recommending products or services at carefully selected times in the customer journey
Customers may visit your store to purchase one specific item, but that doesn’t mean they won’t be open to buying more. A simple suggestion can get your customers to say yes to an additional product or service—and with a strong cross-selling strategy, you can make your recommendations all the more powerful.
So what is cross-selling? Learn the definition, get real-life examples, and understand the strategies you can use to implement cross-selling in your business.
What is cross-selling?
Cross-selling is a common sales strategy that involves getting shoppers to buy related products or services. It encourages customers to increase the total value of their purchases by adding additional items to their carts.
Cross-selling vs. upselling
Cross-selling is different from upselling, which involves getting customers to buy upgrades for their chosen products or services. When a salesperson successfully upsells a client, they usually get them to buy a more expensive version instead of the product or service they initially picked out.
On the other hand, when a salesperson cross-sells a client, they get them to buy at least one additional product or service on top of what they chose. Upsells replace items while cross-sells add on items.
As an example, if a sporting goods retailer recommends a higher-end golf club to someone who chose a generic option, this would be considered upselling. If the retailer recommends complementary items like golf balls and golf gloves to the shopper instead, this would be considered cross-selling.
Add-ons can fall into a gray area between cross-selling and upselling. They’re often considered cross-selling if they’re completely separate products or services, like an SD card for a camera. However, add-ons can be considered upselling if a shopper buys the item to enhance the product or service they chose, like a more high-powered camera lens than what comes standard with a camera purchase.
Add-ons are always an upsell if they don’t stand alone, such as when clients buy extended warranties for cars at a dealership.
Examples of cross-selling
To further illustrate the answer to our initial question—what is cross-selling?—here are a couple of real-life examples of this sales technique.
Home, auto, and life insurance are three products most people can benefit from. However, people often select different providers based on the type of insurance they need. To encourage their customer base to buy complementary products together, Nationwide offers multi-policy discounts when you buy home, auto, and life insurance together—or even just home and auto insurance or auto and renters insurance.
Chase is a banking company that often cross-sells a number of financial services like credit cards, checking accounts, and home loans to their customers. Since most of Chase’s services are ongoing, and their customer relationships are long-term, they often do their cross-selling over time—for example, sending mortgage offers when clients will likely qualify for one. While clients might not sign up for more than one service at a time, this can still be considered a cross-sell because clients are opening new accounts while still paying fees or interest for another.
Why is cross-selling useful?
Cross-selling is an effective strategy for improving your bottom line. In one McKinsey study, cross-selling helped an online store boost sales by 20% and increase profits by 30%.
You don’t have to spend a lot to effectively use this sales tactic. Cross-selling works well because it’s cost-effective. While you can invest in social media ads or even direct mail to get customers to buy more products or services, cross-selling can be as simple as recommending related items at a checkout counter or online product page. You can cross-sell to clients without spending any extra money.
4 effective cross-selling strategies
Great cross-selling techniques can enhance the customer experience while helping your business earn more. These four strategies can help you cross-sell more products or services.
1. Cross-sell products and services that add value
When your cross-selling efforts promote irrelevant items, like dog food for someone buying cat toys, it can come across as profit-driven and overly salesy. However, choosing items that add value for your customers, like socks for someone buying sneakers, can increase customer satisfaction by making their experience with your product or service as well-rounded as possible.
Using a customer relationship management tool (CRM), like Zoho CRM or Pipedrive, can help you provide quality recommendations to all your clients. With a CRM, you can keep record of past purchases, interests, and other data that can help your sales team take client perspectives into account when making sales.
2. Focus on cross-selling to existing customers
Existing customers who already trust your brand are likely to spend 25% more than new customers who may not trust (or know) your brand enough to buy more than they originally planned. As a result, cross-selling can feel pushy to new shoppers.
To make cross-selling a positive experience, focus on building strong customer relationships before using this sales tactic. Not only is it easier to cross-sell to shoppers who are already inclined to spend more, but you’ll also have more data to guide your recommendations once you get to know your clients better.
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3. Identify the right cross-selling opportunities
Have you ever had a pop-up appear on an ecommerce website while you’re trying to read product information or learn about a brand? Cross-selling can be interruptive if it isn’t carefully timed. Cross-sells are often most effective after a customer decides to buy an item and before they start checking out.
Map out your customer journey—which includes all the interactions a client has with your brand before they buy—to find the ideal time and place for your cross-selling efforts, whether that’s in-store or online.
4. Give customers incentive to spend more
Additional products or services aren’t always exciting enough to get an instant “yes” from customers, even if they do add value to their lives. Offering a sales promotion like a discount, freebie, or another reward when shoppers spend a specific amount can encourage them to put your recommended items into their carts. For example, a clothing boutique can offer a free tote bag for shoppers who spend $50 or more in-store and free shipping for those who spend $50 or more online.
This cross-selling strategy has the added benefit of helping you increase your average order value, which is the average amount that customers spend in every transaction. It can also improve customer loyalty by showing your appreciation for your biggest spenders.
Boost your bottom line by cross-selling
So what is cross-selling? It’s the practice of encouraging clients to buy more products or services in a transaction. This sales technique helps businesses improve their bottom line by raising purchase values while keeping marketing costs low.
To make your cross-selling efforts as effective as possible, make sure your recommendations actually add value and are provided at the right times. Plus, consider offering a discount or reward for customers who spend more to give them more reason to add more items to their shopping carts.
Looking for more ways to drive sales? Check out these tips for sales prospecting—a process that focuses on high-quality leads—that will help you slow down early in the sales cycle so you can sell more efficiently in the long run.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.