Cross-selling refers to the sale of related, additional products or services on the basis that the customer is interested in, or willing to buy, a product from your company.
Cross-selling is a great way to build customer loyalty and strengthen customer relationships, which can lead to higher customer lifetime value (CLV) and retention rates. This is why cross-selling is such an effective growth strategy.
Cross-selling is the process of selling related, additional products or services to customers based on their interest in or purchase of one of your company’s products. This is a great way to build customer loyalty and build deeper customer relationships, which in turn can increase customer lifetime value and customer retention. This is why cross-selling is a great growth strategy.
Benefits of Cross-Selling
The primary advantages of cross-selling are increased sales revenue, improved customer satisfaction and, in the case of B2B companies, an increase in Customer lifetime value (CLV) due to deeper integration into the business of the customer. When cross-selling works, it works well for both you and your customers. Ideally, your existing customer is unaware of a new product or service that improves their experience. You present it to them on their journey at the right time, via their preferred channel, and they respond positively and purchase the suggested product. Your sales go up, and their satisfaction goes up because the product better suits their needs.
Potential Drawbacks of Cross-Selling
When cross-selling fails, it’s because it’s uncomfortable for customers and it’s not effective at generating sales, which is almost always due to poor planning or poor data. For example, if you suggest a product that’s not relevant to your customer’s needs (e.g., promoting winter clothing when they’ve just purchased a bathing suit), you may drive them away. Similarly, if you’re trying to make contact with a customer who would normally place an order via email but would like to speak to you by phone, you may be unable to do so. Even when cross-selling works, it isn’t always a good idea. Harvard Business Review’s 2012 study found that certain types of problematic customers can turn cross-selling into a “profit-losing” strategy. Specifically, the study found that: Some types of customers put stress on customer service staff. For example, they may return or cancel a large quantity of goods and/or services or withhold spending elsewhere to spend on cross-selling.
It’s important to look at customer data and metrics associated with your marketing cross-selling campaigns to determine which cross-sales efforts are effective without impacting overall profitability and which ones should be excluded from cross-selling efforts or approached differently, such as by upselling. Generally speaking, cross-selling to too many customers is a losing proposition unless you have a well-thought-out cross-selling strategy.
Steps for Cross-Selling to Customers
1.Identify related products and services suitable for cross-selling
2. Identify suitable customers ready for a cross-selling
3.Develop a cross-selling campaign and customer journey
Before you can persuade your customers to engage in cross-selling, you must know what products and services work together. What do customers usually buy as an add-on? What products do they usually buy together? What products have worked well in cross-selling past campaigns? Data is everything. Let’s say you’re a fitness center. Do some of your members buy drinks at the front desk? Would they be interested in an add-on beverage program? A flat monthly fee? Or let’s say your online electronics store carries wireless headphones that you could market to your recent smartphone buyers. Some of those customers may have looked at the headphones but didn’t buy them.
1. Identify related products and services suitable for cross-selling
The next step is to target the right people. How do you determine who is a “good” or “great” cross-sell customer? The first step is to collect data about your customers at each stage of their buying cycle. Your company’s in-store and online communication with your customers, their buying and browsing history, whether they have repeatedly returned products or cancelled services, can all be used to determine who is a good candidate for your cross-sell campaign. The second step is to target people who are “like” to your customers.
2. Identify suitable customers ready for a cross-selling
Organizing the data you collect from your customer purchase history and interactions is exponentially more efficient when combined with powerful tools for CRM and even more so when combined with AI-powered sales analytics. Artificial Intelligence tools can automatically reach out to customers who show interest in specific products without your sales team having to manually schedule a new campaign every time. This allows your marketing and sales team to focus on the more in-person interactions that machines cannot handle.
3. Develop a cross-selling campaign and customer journey
Once you have identified your ideal cross-sell customers, you must convert them. After that, you need to create a cross-sell presentation strategy. If you sell online, cross-sells can be done through checkout ads or email campaigns that target those who recently bought a product. To increase your cross-sell conversion rates, experiment with different ways to contact customers and adjust your cross-sell presentation based on analytics.
Now that you have identified the customers you would like to reach out to and the products you would like to sell cross-sells to, here are some cross-selling techniques and cross-selling tips you should be aware of: Offer complementary products and services that truly add value to the customer: Think from your customer’s perspective, not just from the perspective of the revenue you expect to generate. If you’re using a CRM system, fewer well-positioned offers are much more valuable than a large number of offers that do not add value to your customer relationship. Identify effective touch points on your customer journey: If your customers have placed orders on your website, then email or targeted ads may be the best way to cross-sell. If your customers are more likely to visit your store in person, then a salesperson will be more likely to sell additional products and services in person or over the phone.
Inbound marketing campaigns can be used to promote complementary products and services. For example, if you have content aimed at an audience that purchases luxury cars, you can add ads for automotive accessories to your blog posts or product descriptions to promote cross-selling. Take advantage of your customers’ data Today’s consumers expect personalized service – even when it’s upselling or cross-selling – and there are tools available to provide this through solid data. Create spaces for customers to interact If you have an online community of skateboard buyers, they can be just as effective at promoting additional wheels and parts as you are in direct marketing. Utilize social selling techniques Social media influencers can be a great way to reach the widest audience possible in today’s largely digital sales landscape. Offer incentives to influencers who are already promoting your products on their channels to mention complementary products on their channels.
When used correctly, cross-selling can be a powerful tool to boost sales revenue for your business. While you should leverage cross-sales opportunities, you also need tools to collect and analyze data to leverage cross-selling in ways that benefit your business and customers. Using Salesforce to manage marketing and sales data in an intelligent way gives you a competitive advantage in cross-selling efforts with sales AI. Learn more about Salesforce’s cloud software, Einstein Analytics, and more with our deep dive into AI.
That’s a lot of info!
Here’s what you should take away from this article:
Cross-selling is a process of selling products or services to customers that match the ones they’re buying. It’s different from upselling, which is selling a higher price to a customer. Cross-selling involves offering supplementary products to customers, such as a computer case for a laptop. Cross-selling has many benefits, such as increased sales, better customer experience, and higher CLV. However, when cross-selling doesn’t work, it’s usually because the products or services are incompatible or inappropriate. What steps do you need to take to cross-sell to customers? The first step to cross-sell is to identify which products or services are compatible with each other. The second step is to identify which customers are likely to benefit from cross-selling. Types of Cross-selling techniques.