Increasing sales and revenue streams is becoming increasingly important to businesses in today’s competitive environment. Cross selling is an effective strategy that many businesses have adopted to sell more. But what exactly is cross-selling, and how can it help you increase your sales? We will discuss it in this article, explain how it works, and provide practical tips on how to use it to boost your bottom line. Whether you are a small business owner or a marketing professional, read on to discover how cross-selling can take your sales to the next level.
Cross selling meaning
According to Forbes, Cross selling is a technique that entices a customer to supplement his or her initial purchase with products that complement it.
In cross selling, you sell the same product the customer requested, while at the same time persuading them to purchase other products that are usually related to the main product. For example, if you are selling a regular hamburger that the customer requested, you can suggest that they also buy some French fries and a drink to enjoy with their burger.
This is a case of cross selling. Cross-selling is a powerful sales technique that offers several benefits to both customers and businesses. It helps businesses increase their revenue by promoting additional products to customers who are already interested in a particular item. Cross sell can also help customers discover new products they may not have otherwise known about, leading to a better overall shopping experience.
While cross selling techniques have the potential to be effective, they can also have some risks. For example, if a customer feels pressured to purchase additional items, they may become frustrated and choose to shop elsewhere. It’s important to strike a balance between promoting additional products and respecting the customer’s preferences.
Meaning of upsell
Upselling means that instead of selling the product that the customer has requested, you sell them a better and usually more expensive product.
Using the hamburger example, let’s say a customer comes in and orders a basic hamburger for lunch. However, you offer them a more delicious and satisfying double burger at a reasonable price compared to their original order. The customer agrees and decides to purchase the double burger. This is a simple example of successfully implementing the upselling technique. It’s important to note that upselling and cross selling are two separate marketing strategies that serve different functions and goals.
To give you another example in E-commerce, Wayfair, an online home goods retailer, uses upselling techniques on their product pages. When a customer is browsing a specific item, they show a section titled “People Also Viewed” or “Similar Items” which displays more expensive products that are similar or complementary to the item being viewed.
The section encourages customers to consider purchasing a higher-priced item that may better suit their needs, resulting in increased revenue for the business through the use of upselling. In this particular scenario, Wayfair is employing both upselling and cross selling techniques simultaneously, which has the potential to be an advantageous approach to benefit from both strategies.
Cross sell vs upsell
Upselling and cross selling are two common marketing and sales terms that every salesperson should be familiar with. However, sometimes it is difficult for businesses to distinguish between these two concepts, and they may mistakenly perform up-selling while intending to do cross-selling or vice versa.
In this section of the article on E-commerce nation, we compare these two concepts. Before moving any further, please take a look at the following image. You should be able to see how these two concepts differ from each other after this.
As you can understand from the picture, upselling is the act of proposing an improved version of the product or service the customer wants and modifying the original order to a more advanced, higher quality, and typically more expensive alternative.
On the other hand, cross selling refers to recommending associated products or services that could enhance the customer’s current purchase.
Cross selling example
One example of cross selling in e-commerce is Amazon’s recommendation engine, which uses data analysis to suggest complementary products to customers.
When a customer views a particular item, they are presented with options such as “Frequently Bought Together” and “Customers Who Bought This Item Also Bought.” By presenting these options in a non-intrusive way, Amazon can increase its revenue while also providing customers with a better shopping experience.
Benefits of Cross Selling
Cross selling to existing clients is one of the primary methods of generating new revenue for many businesses. This is perhaps one of the easiest ways to grow their business, as they have already established a relationship with the client and are familiar with their needs and objectives. Here are some of the “POTENTIAL” benefits of a successful cross selling. Pay attention to the word potential.
It is important to be aware that there are certain risks associated with cross selling. For instance, if a customer feels compelled to buy more products, they may experience frustration.
Increase revenue
Cross selling allows businesses to increase their revenue by selling additional products to customers who are already interested in a particular item. Up to 35% of Amazon’s revenue is generated through cross-selling, which is facilitated through features such as the “Frequently Bought Together” and “Customers Who Bought This Item Also Bought” sections on the site.
These sections suggest products that are related to the item that the customer is currently viewing. Another well-known example of cross-selling is McDonald’s offering: “Would you like fries with that?”
Improve customer satisfaction
It can help customers find complementary products that enhance their experience and improve their satisfaction with the initial purchase.
Decrease sales costs
It can reduce marketing and advertising costs by targeting existing customers who are already familiar with the business and its products.
Insights into customer behavior
It can provide valuable insights into customer behavior and preferences, which can help businesses refine their marketing and sales strategies.
Cross-selling: 6 steps to follow
Cross-selling can be an effective strategy for companies to increase sales and customer satisfaction. Here are the steps that you should take to successfully establish your system:
1. Analyze customer behavior
Study customer behavior to identify patterns and preferences. Identify products that customers often buy together, or suggest services that could enhance the overall experience. Analyzing and gathering business data is one of the most important trends in today’s business world.
You need to read the Integrating Data-driven Strategies Into Decision-making to learn about how your small business can compete with giant companies with the help of data. We strongly advise you to read the 5 Tips on Customer Data Management article to get a better view of how to manage your customers’ data.
2. Develop cross-selling offers
Create compelling offers that suggest additional products or services customers might be interested in. These offers should be relevant to the customer’s current purchase and add value to their overall experience.
3. Utilize bundling to increase the likelihood of success
Bundling can be used in combination with cross-selling to offer customers a more comprehensive solution to their needs while increasing sales. For instance, a tech company that sells laptops could bundle a laptop with a set of accessories, such as a laptop bag, a wireless mouse, and a headset.
By bundling these items together, the company can offer a discounted price compared to buying each item separately, making the offer more appealing to the customer. Additionally, the company can use this bundle to cross-sell other related products, such as laptop sleeves, external hard drives, or antivirus software, by including them as optional add-ons to the bundle at a discounted price.
This way, the company not only increases the value of the initial purchase for the customer but also increases the chances of selling additional products to them through cross-selling.
4. Train your sales staff
Train sales staff to identify cross selling opportunities and teach them how to communicate the benefits of additional products or services. Provide them with product knowledge and effective sales techniques to increase cross-selling success. You can also offer incentives and rewards to motivate sales staff to promote cross-selling. Then you should track sales staff performance to identify areas of improvement and provide feedback and training to improve their cross-selling skills.
5. Use technology
This is a complementary step to maximize cross selling benefits. You can use technology to automate the cross-selling process, such as by recommending products or services during the online checkout process or sending personalized recommendations via email based on previous purchases.
6. Measure success
Continuously monitor the success of cross-selling efforts to evaluate the effectiveness of the strategy and make adjustments as necessary. Try to find out the bottlenecks of your cross-selling process and increase your performance by improving them.
Follow these steps to establish a successful cross-selling system that will increase your revenue and customer satisfaction.
Cross selling cheat codes
Cross-selling is a popular technique, but not everyone knows how to use it effectively. In this article, we’ll discuss three cheat codes to help you cross sell like a pro.
Select the right product for cross selling
The first step in cross-selling is to select the right product to offer. It’s important to categorize your related products and propose something that adds real value to the customer. (Relates to value proposition)
Propose and let the customer decide
When offering a cross-sell, it’s important to propose the product without being pushy. The customer should feel like they have a choice in the matter, rather than feeling pressured to make a purchase. By giving the customer the option to add a related product, you’re more likely to get a positive response.
Use suggestions during and/or after buying in online sales
One of the easiest ways to cross-sell is to use suggestions during and/or after the buying process. For example, when a customer adds a product to their online shopping cart, you can suggest related products that they might be interested in. This can increase the chances of the customer making additional purchases
Key Insights
- Cross-selling is a sales technique that suggests complementary products to customers who are already interested in a particular item.
- Upselling is when a business suggests a more expensive or better product to a customer instead of the one they requested.
- Cross-selling and upselling have different goals and functions and should not be confused.
- Examples of cross-selling in E-commerce include Amazon’s recommendation engine and Wayfair’s “People Also Viewed” section.
- The potential benefits of cross-selling include increased revenue, improved customer satisfaction, decreased sales costs, and insights into customer behavior.
- To establish a successful cross-selling system, businesses should analyze customer behavior, train their employees, personalize their approach, and monitor their results.
