Cross-selling is a widely used technique across various industries. It involves recommending products that complement the customer's initial purchase and fulfill additional needs. When recommended at the right time, cross-selling nudges customers to buy extra items that they likely would have purchased anyway.
As a popular sales tactic, over 40% of companies see 11–30% of their revenue coming from cross-selling! If you haven't already, it's time to start cross-selling. First, you’ve got to make sure you understand the process.
Cross-selling is a sales technique that encourages customers to purchase complementary products or related products to their initial purchase. It's a great way to increase revenue per order without too much cost or effort. When done correctly, cross-selling can alert existing customers to discover additional products that they may have missed and can increase customer confidence in your brand.
A salesperson with a good cross-selling strategy will pitch items that complement and enhance the primary product, enhancing the value of the overall purchase. In SaaS, cross-selling is frequently used during the checkout process and on product pages. By effective cross-selling of related products, companies can increase the likelihood of repeat purchases and introduce the customer base to new products and offerings they might not have been aware of before. Even if it doesn’t lead to additional sales immediately, cross-selling increases the chances of future purchases by increasing brand exposure.
Cross-selling is a smart sales and marketing strategy that can benefit both businesses and their customers. By suggesting complementary or supplementary products to customers, your business can:
· Increase sales revenue
· Improve customer satisfaction
· Increase Customer Lifetime Value (CLV) through deeper integration in a customer’s business
· Increase customer loyalty
· Ensure customers don’t go to a competitor to have an additional need fulfilled
Offering additional products that a customer might need can make the buying process more convenient and demonstrate that your business truly understands the customer's needs. By identifying opportunities to cross-sell and promoting relevant items, you can encourage customers to make additional purchases and boost their revenue. This can be a more efficient sales strategy than focusing on acquiring new customers. Overall, cross-selling is an effective way to generate repeat business, increase brand exposure, and enhance customer satisfaction.
The primary difference between upselling and cross-selling is in their sales approach. Upselling involves promoting an upgraded and more expensive version of the original product. Cross-selling, on the other hand, complements a sale by offering additional products that are related to the initial or original purchase. It doesn’t involve persuading customers to replace their current choices with more expensive versions.
Even though the terms are often used interchangeably, cross-selling and upselling are distinct practices that should be applied appropriately to drive growth. Both tactics aim to add value to the customer’s purchase and enhance their buying experience. While cross-selling promotes the entire catalog by recommending related products from similar categories, upselling provides incentives to customers to buy higher-end versions of the same product or to purchase upgrades, like a warranty that offer greater functionality.
Let’s look at a few examples of cross-selling.
Most successful eCommerce retailers and online stores use cross-selling techniques to increase sales revenue. Amazon is a prime example, showcasing a "Customers also bought" section on their product pages and analyzing customers' purchase histories to automate segmentation and offer personalized, complementary product suggestions. According to HubSpot Research, bundling products together is one of the most popular strategies among cross-selling efforts.
Some more examples of cross-selling opportunities across the customer journey are:
· Offering additional products or services at a discounted rate on product pages or in the shopping cart
· Suggesting complementary items during the checkout process
· Introducing product add-ons during customer relationship management (or CRM) – such as advanced features or long-term support and training
· Email follow-ups from the sales team suggesting related products that might be of value to the customer
Cross-selling is a powerful sales strategy that can help businesses increase revenue and customer satisfaction. By encouraging customers to purchase related or supplementary products alongside their initial purchase, companies can not only boost their average order value but also improve the overall customer experience. While cross-selling can be highly effective, it's important to avoid pressuring customers or suggesting products that don't truly complement their initial purchase. When done correctly, cross-selling can be a win-win for businesses and customers, driving revenue growth while providing customers additional value and convenience.