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Cross-selling provides you with new potentials for more sales. Did you know that the chance of selling to an existing customer is about 60-70%. To new customers you will only sell about 5-20%. In this article we explain what cross-selling is and share 6 tips on how your company can optimize cross-selling.

To begin with, let’s look at the definition; what actually is cross-selling? The idea is to present similar offers to a customer who is interested in your product or has already purchased it. These product suggestions can be extensions or additions to the product the customer was originally interested in. In addition, other products can be offered, such as those that are often purchased with the original product. An example of a typical cross-sale would be if you actually only go to McDonalds for a cheeseburger, but then order a Coke or fries as well.

You may have also heard of up-selling in this context. Although the words are often used as synonyms, there are differences. Up-selling is about selling the customer a higher quality and more expensive version of the product they were originally targeting. To stick with the example above, up-selling would be when McDonalds can persuade you away from your desire for a simple cheeseburger and convince you to buy a double cheeseburger. By the way, up-selling works about 20 times better than cross-selling.

Cross vs UpSelling
During Cross-Selling a similar product is offered.

In the following article, we summarize the benefits of cross-selling and provide impetus for a successful cross-selling strategy. If you are more interested in up-selling, also read our article Up-selling: Up-Selling: 5 underrated tips.

Table of Contents

What benefits will my company gain from cross-selling?

With cross-selling, you have the advantage that the customer has already said “yes” to your company and at least one of your offers. The hurdle of gaining the customer’s trust for additional products is no longer as high as with a new customer. Of course, your goal in cross-selling is to increase sales. At the same time, and just as importantly, it is also important to achieve added value for the customer through your cross-selling activities in the long term.

A customer to whom you have offered a suitable and value-creating product will, of course, be more satisfied in retrospect. Perhaps you have even made the customer aware of a need of which he or she was previously unaware. Successful cross-selling will therefore also have a positive effect on customer relations and customer loyalty to your brand.

By successfully cross-selling, you generate more revenue per customer with the same number of customers. You increase your average order value (AOV). Overall, you have to spend less time and effort on acquiring new customers. This reduces your acquisition costs and allows you to capture more of the total sales potential of your customers.

Tips for successful Cross-Selling

Cross-selling is nothing new. It is established in all industries, whether online or offline. McDonalds has been asking customers “Would you like fries with that?” since its inception, and even Amazon earns 35% of its revenue from cross-selling. Follow these 6 underrated tips to optimize your cross-selling activities as well:

The right timing

Here, tact is needed; most of the time, cross-selling takes place only at the end of the purchase process. At this point, the customer has already committed or even already purchased. Sometimes it is even advisable to send the customer new offers only months or weeks after the purchase. Then the customer has already had time to get to know the product better and ideally trusts your brand even more.

Depending on the situation, it may also be appropriate to suggest extensions or opt-ins throughout the customer journey. Think, for example, of the many extras offered when buying an airline ticket all the way to the shopping cart.

Keep it simple, natural and honest

Don’t appear too “salesy.” The point of cross-selling is not to manipulate the customer or to talk people into buying things that are of no value to them. If the customers feel that you are selling them something useless, they may even reconsider the purchase of the main item and bail out.

Too many different offers are also distracting. If you have too much choice, you often end up paralyzed and stressed. Check out the so-called “Paradox of Choice” for this. Two or three additional options are ideal, not more.

Data-based and automated work

Customers buying a product on your website should find fields like “people who bought this product often also bought product XY” or “are often bought together”. So study and evaluate your databases and find out which products go best together. Ideally, you then use CRM systems to automate which offers show up in these fields. In offline sales, it makes sense to create a kind of mind map for the sales team that shows which products are often bought together. It’s also best to automate the follow-up and thank you emails you send after the purchase.

Amazon Cross Selling
Amazon operates cross-selling with the fields "frequently bought togehter" and "products related to this item".

Offer packages

Surround your main product with a bundle of secondary products. Examples would be, if there is a ball in addition to the soccer shoes or the expensive designer perfume with the matching shampoo and deodorant. Often, themes or experiences also sell well. For example, an insurance company could offer a whole package of different insurances and little things on the subject of “vacations abroad”.

One trick here is also to offer the product that customers were interested in from the start in three differently priced options. Once the price you are aiming for and additionally a cheaper and more expensive option. Most customers will choose the middle option.

When making packages, opt outs are also a good option. This is when the marginal assortment is there from the beginning and the customer has to decline it to prevent cross selling. Opt Outs have a better success rate than Opt Ins, where the customer must actively add the additional purchase to the cart.

Creative purchase incentives and loyalty bonuses

Give customers small bonuses for accepting the additional purchase. Like, for example, that a certain portion of the total price is waived with the purchase of the by-product. Another idea would be to eliminate the cost of delivery on a successful cross-sale.

Customers may be convinced by the main product, but not quite yet by the ancillary product. Here you could work with free trial licenses or free trials. For example, offer the customer software that you want to cross-sell for one month for free.

Once the purchase is complete, you should reward customer loyalty. Your pricing and bonuses should be designed so that customers who buy more and more often from you also get something out of it. Thank them with future discounts or small free gifts.

Personalize

Make your offers as personal as possible. In this way, you also strengthen the customer relationship. Lack of identification with the company and the brand is one of the main drivers of customer churn.  Personalized communication starts with addressing the customer directly as “you” or “you” in all messages. 

Over the whole customer journey ask a lot of questions and collect data. Ask customers not what products they are interested in, but what needs they have to fulfill or what problems they have to solve. Having this in mind, you can make much more detailed product suggestions. The more customers feel that the offers meet their individual needs, the more likely they are to come back.

Conclusion

Successful cross-selling allows you to achieve higher profit margins with the same number of customers. In addition, you strengthen customer relationships and loyalty. If this is to happen, your sales strategy must always focus on the added value for the customer. Work data-driven to find out which products might really interest the customer. Be creative with loyalty bonuses and discounts and personalize your communication.

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André Wehr

André Wehr

About Me

As a founder and entrepreneur, I witness the importance of customer centricity for companies on a daily basis.

Incorporate the essential perspective of the customer into your product genesis and marketing processes. That is what puts horsepower on the road.

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