Cross-selling is a marketing/sales strategy wherein a customer is suggested items related to the product purchased or about to be purchased. For instance, when a customer buys a shaving cream online, he invariably sees related product suggestions on the screen, such as shaving razors or after-shave lotions. This is a kind of online cross-selling.
Cross-selling is among the oldest and most effective types of marketing. It’s done both offline and online. A typical offline cross-selling practice is a server trying to sell starters and desserts to customers who’ve only ordered the main course. Also cross-selling is extremely widespread in banks, investment firms and other financial services companies. If done right, cross-selling can lead to more sales and increased profits.
Cross-Selling the Right Way
Offer value: To cross-sell, the store must have something relevant and value-adding to offer. Moreover, the customer must be suggested familiar and popular products, so that the suggestions seem genuine, such as displaying products other customers have frequently bought together. Recommending new or non-branded goods will go down as blatant product promotion. Also, most buyers despise cross-selling when interacting with the customer service department, especially when they’re calling in frustrated about something.
Cross-sell inexpensive items: As a thumb rule, cross-selling works best when a higher value purchase is supplemented by a lower cost service or accessory. For instance, if the primary purchase item is a smartphone, the cross-sell products should ideally be micro SD cards, screen protectors, car chargers, etc. and not another smartphone or tablet PC.
Targeted cross-selling: Cross-selling to every customer is not the right ploy. Some buyers can turn out unprofitable. In other words, they may make excessive use of all customer service channels, from web to phone to in-person interactions, thereby inflating costs for the company. Such customers’ curiosity and lack of knowledge goes up with their increasing cross-purchases. In other words, the cost of marketing and goods for a particular buyer exceeds the total value of the sales realized.
Cross-sell limited items: It’s also important to not cross-sell too many items. A couple of recommendations are usually ideal. The focus must never be consumer manipulation. For a rewarding cross-selling experience, the emphasis should be on enhancing customer purchase experience or problem-solving and not increasing total cart value. At times, cross-selling may remind consumers the products or services they originally intended to buy, but forgot while shopping. In other words, cross-selling can serve as a wonderful reminder if done right.