Cross-selling is an extremely valuable strategy for a range of industries – from fast food, to beauty products, to software, to insurance. Not only does it increase revenue, but it leads to greater customer satisfaction and better long-term relationships – when it’s done right.
Here we take you through the art of cross-selling. We start with the basics, move on to cross-selling strategies and best practices, and end with how data, eCommerce platforms and software can support your cross-selling strategy.
What is cross-selling?
Before we dive into cross-selling as a strategy, it’s important to understand exactly what it is – and what it isn’t.
Cross-selling is the strategy of suggesting – and selling – related products to a customer who is engaged in the purchasing journey. By promoting more products to the customer, the business ‘cross-sells’ another item, increasing the overall purchase value.
Cross-selling can be done in a number of ways – for example, promoting an item under promotional banners like ‘often bought with’ or ‘special price’. Promoting items this way creates an incentive for the customer to explore the offer further, and often results in the sale of another product.
Cross-selling also creates greater value for the customer. Suggesting another product to the customer can be very well-received and create a more personalised customer experience and ongoing goodwill toward your brand.
Cross-selling vs upselling: what’s the difference?
Cross-selling and upselling are often confused, but they are different strategies.
As the name suggests, upselling is the practice of offering a customer goods that are similar but at a higher price point, such as a larger version of the product being considered for purchase.
Cross-selling is the strategy of suggesting a product that works well with the product being considered, such as complementary skincare, clothing or food.
“Would you like fries with that?” is probably the most famous cross-selling phrase in marketing. On the other hand, “Would you like to upsize your combo?” is an upselling tactic.
Why is cross-selling such an important selling strategy?
Both cross-selling and upselling are regarded as extremely valuable for marketing and increasing your Average Order Value (AOV) – and, of course, your profits. Such selling strategies can be found on major sites such as Amazon, with data from customers’ buying habits, searches and carts used to promote complementary products.
Beyond the financial benefits, cross-selling is beneficial for increasing customer satisfaction. Customers experience a positive cross-selling experience when a product is suggested to them that they were previously unaware of, but is helpful to them. Ideally the product will fit their needs and they purchase it. In doing so, the business increases its sales and the customer leaves the purchasing experience feeling more satisfied.
What are best practices for cross-selling?
To ensure your cross-selling strategy is as effective as possible, it’s important to follow some cross-selling best practice guidelines. Firstly – and this may seem simple – just start. As soon as you do so, you’ll be able to collect data and information to help refine and improve your cross-selling strategy.
Once you have started, you will be able to ascertain the pockets of opportunity that exist within your current database. It’s far more effective to increase sales to your existing customer base than find new customers to sell to.
1. Identify key customer profiles
To maximise growth potential, at least in the early stages, it will be valuable to identify which customer profiles are most likely to respond to cross-selling of your products. This could be, for example, customers who have high spending habits but low loyalty to brands. By focusing on the high-potential customer groups, you will be able to utilise your internal capacity in the most effective way.
2. Build customer profiles
It’s also important to build dynamic customer profiles. Information on customer preferences is now accessible from multiple sources, both internally and externally. Staying across trends and changes in customer behaviour will support effective cross-selling.
3. Offer the right goods to the right customer
Further, when you drill down into the detail of the products that can be offered, you’ll want to ensure you’re suggesting the right goods to the right customer. Getting this right is vital for the success of the strategy.
For example a skincare business might offer toner or moisturiser to someone who has purchased a cleanser. Or a clothing business might offer a top to match a skirt.
4. Provide an easy and enjoyable user experience
When the extra product is offered, ensure the user experience is easy and transparent by providing further information and clear pricing. Also, it’s good to avoid being too pushy or confusing in your offering. Offer another product at the appropriate time through the purchasing journey, and keep the cross-selling offering simple and relevant.
When is the best time to cross-sell to customers?
Cross-selling can be done at different times in the purchasing journey – prior to sale, at the point of sale, or after the point of sale:
1. Cross-selling prior to a sale
Once the potential customer is on your site and browsing products, other related or complementary products can be surfaced as ‘pop-ups’ or in boxes around the initial product page. This allows the consumer to become aware of products that work well together or may fit their customer profile.
In skincare, for example, the customer profile may be that they have a particular beauty concern. This opens the potential to surface products related to that concern – and these might be on special or bundled with other products with a discount.
2. Cross-selling at the point of sale
Once the customer is at the point of sale, there is another opportunity for cross-selling. At this point in the user journey, the customer is fully in the purchasing mindset and could be influenced to buy another product if it appeared suited to what was in the cart already.
For example, a pop-up offer when the consumer clicks into the cart could convert another purchase, as could the ‘often bought with’ suggestion of complementary products.
3. Cross-selling post point of sale
Once the customer has completed the purchase, there is another opportunity to cross-sell. At this point a product could be suggested that matches an individual or group of items purchased.
This can be done through the thank you page, which is often under-utilised as a selling opportunity. The thank you page is important as it is seen when consumers have made a purchase, and are therefore highly likely – according to research – to repeat their behaviour and buy again.
What strategies can you use to cross-sell effectively?
1. Recommending related items/services
Recommending related items or services is one of the most frequently used forms of cross-selling. This strategy involves, for example, offering a bundle discount on complementary items, or a pop-up window recommending an item. It could also mean the resurfacing of recently viewed items, items that customers with similar profiles had ‘also bought’, and suggestions to ’complete the look’.
2. Offering free shipping for purchases over a certain amount
Another cross-selling strategy is the offer of free shipping for customers who reach a certain price point in their cart – for example over $150. This is a type of point-of-sale cross-sell, as customers are about to check out when the cross-sell is offered. It can be extremely effective as it can save the customer shipping costs while also enabling the ‘stocking up’ of certain products.
3. Suggesting products after the sale
Cross-selling can also occur after a sale, when the customer is on the confirmation or ‘thank you’ page. The importance of this page can be easily forgotten, but it’s actually a valuable few seconds in the consumer journey.
At the point a ‘thank you’ is displayed to the customer, there is recognition and gratitude from the business toward the consumer. This creates goodwill, particularly given the customer is likely feeling satisfied from having made a purchase. As such, the timing is good to cross-sell a similar product or one which the customer’s behaviour suggests would be welcomed.
4. Cross-sell beyond the point of sale
There are also opportunities for cross-selling after the customer has left your site. The customer at this stage would have progressed through the site’s online shopping system and input various valuable pieces of information including contact details. Their email can be added to a mailing database, with regular correspondence providing further opportunities to cross-sell products.
For example, if the consumer purchased a certain hair product, it can be followed up with offers for hair treatments or other complementary items.
It’s important to gauge a customer’s interest in receiving emails and how regularly, and also to offer an ‘opt-out’ option, or potentially offer options for how often emails are received. And you’ll want to track conversions, alongside the number of people unsubscribing and why. Doing so will help inform your strategy going forward.
What’s best practice for B2B cross-selling?
B2B is quite different from B2C cross-selling. B2B cross-selling is a more logic-driven exchange, with each business considering the pros and cons for their bottom line of engaging in any purchase, including a cross-sell offered by the seller. B2B relationships are also likely to be more limited in scope.
B2C cross-selling, by contrast, is driven primarily by emotion or a purchasing mindset, with the seller capturing a point in time that the buyer is more likely to take up an offer for further products. There is also likely to be a vastly more broad array of customer profiles available for B2C cross-selling opportunities.
Therefore, B2B cross-selling lends itself to particular practices.
With B2B it’s important to ensure any pitch for a cross-sell includes detailed information as to why that particular product will benefit the buyer. The more data gathered on this – including around customers and trends – the better. Having an in-depth knowledge of your buyers’ needs will be hugely beneficial.
It’s also important to have an absolute understanding of the product you are selling, and its uses in different contexts. You’ll need to provide this information to the seller so they have a clear picture as to how the product will support their business.
If it’s something like software, for example, the potential buyer will likely have specific questions about information, such as:
- How the product fits with their existing product
- How long it would take to integrate
- Any extra costs involved
- What the likely Return On Investment (ROI) will be over a period of time
The seller should be ready with answers to such questions.
Finally, beyond the bottom-line analysis that will drive much of the purchasing decision, the buyer will likely be swayed by the professionalism of the seller. And this is especially important if the relationship is likely to continue beyond the one sale.
What are examples of successful cross-selling?
You don’t have to look far to find examples of successful cross-selling.
Amazon is particularly skilled at cross-selling, with more than a third of its business coming from this tactic. Amazon is able to draw on its customers’ website behaviour, buying habits and opportunities in the buyer’s journey. It suggests products under by indicating those that are often ‘bought together’, or that similar customers like.
Smaller businesses can also be successful cross-sellers. Think about your local corner shop or supermarket and the sweets that are placed just by the counter. This is cross-selling in its most basic form – locating edible, cheap treats right by the counter for impulse buying.
What features do eCommerce platforms offer to assist with cross-selling?
Ecommerce platforms offer a variety of supporting features for businesses wishing to cross-sell. For example, Shopify offers features and plug-ins that support several cross-selling strategies, such as recommendations, bundling, in-cart cross-sells and after-sales promotions.
Shopify’s offerings are extensive, but other platforms such as Magento, BigCommerce and WooCommerce also offer features and plug-ins to support cross-selling strategies.
How can data drive a more effective cross-selling strategy?
As with all eCommerce strategies, data plays a key role in successful cross-selling. One of the most important elements for any business with an online presence is the user experience – or the customer journey – as they click through the website.
Where each customer goes, what they click on next, how long they spend considering an item – these all contribute to a data-set which provides invaluable information for cross-selling, future opportunities with that customer, and segmentation analysis.
This is the sort of data that informs the likes of the Amazon machine-learning algorithm, which cross-sells or upsells to a particular segment of its customer base that demonstrates similar behaviours.
These data sets also inform you who not to bother promoting to – such as those who gravitate towards high-discount purchases, those who demand personal service for their issues, and those who have a fixed budget beyond which they won’t budge.
How can you use inventory management software for cross-selling?
Data from inventory management software is also helpful for cross-selling. The data you can extract from using this software helps identify products that are often bought at the same time. This can inform the cross-selling strategy of offering items ‘often bought with’ others.
This sort of product bundling is a simple but highly effective strategy that has been used with great success for decades. It creates the ideal scenario – one where your business gains more revenue and your customer leaves more satisfied.