Cross selling means selling related or complementary products to your existing customers. It is one of the most effective methods of the marketing world. for example, in the financial world cross selling mean different types of products to investors or investments or tax services to clients who are planning retirement.
When a bank client gets a loan that means the sales team of the bank is trying to cross sell a personal line of credit. Many businesses use cross selling techniques to sell products and services to existing customers to generate more revenue.
Cross selling is one of the easiest ways to grow your business because you have already established a healthy relationship with your clients and you are aware of their demands and needs.
Are you cross selling?
Think about your own business. There are chances that you have multiple products to sell and your customers are also aware of this. However, do you think how many of those customers want to repurchase from you?
Customers usually like to shop for things that they want and hence it is an opportunity for a business owner to sell more to one customer and get more business from him. In other words, cross selling is a way of selling supplementary or complementary products to existing customers.
for example, when you sell a car charger to a customer who has just bought a new mobile phone. There are always a few products on the shelves of our stores that do not get sold easily. Cross selling is the best way for you to sell those products to existing customers and increase your revenue and also increase your customer base.
In this way, you gain their loyalty and make them come back to you more often. You might be selling after-sales services, extended warranties, and annual maintenance contracts to your customers. if you are doing this you are unintentionally cross selling to your customers. the concept of cross selling also makes more sense economically.
You are making more business from the customers who are already at your doorstep and you are not spending anything extra to get more customers to your business to generate more revenue. Your marketing and selling costs are already recovered as the customer has already bought something from you.
if you are able to sell more to your existing customers then that product can improve the value, usability, and reliability of the previously sold product.
Cross selling strategies and techniques
Cross selling techniques can be used at almost every stage of the marketing funnel. Therefore, cross selling strategies can be divided into three stages:
1) Before Sale
in before sales strategy, you make look two or more products related to one another at customer touch point either by product recommendation or product bundling. You must have noticed that on e-commerce websites you usually see suggestions and recommendations while buying a product in the form of “best offer”, “frequently bought together”, “Customers also viewed”, “Most popular deals”, and “just for your offer”, etc.
These strategies are used to increase the likeability of cross sales.
2) During Sales
In during sales strategy, recommendations and suggestions are given to customers by the salesperson in retail stores or on e-commerce websites.
3) After Sales
in after sales cross selling techniques, recommendations and suggestions are given to customers through personalized emails, SMS or calls to persuade customers to choose related products.
Examples of cross selling
1) Smart Phone + Smart Phone Insurance
In past demand for smartphones has increased tremendously, therefore, for the need for insurance has also increased for expensive smart phones. You will always find one or other kind of insurance being sold to you at retail stores or at e-commerce websites like Amazon with an additional price along with the smart phone.
Smart phones insurances are appreciated by both companies as well as customers. The benefits of insurance companies have increased by selling extra product and customers find it easy and convenient as they don’t have to go finding insurance at other places.
2) Fast food restaurants
you must have asked for fries while buying a burger at a fast food outlet like McDonalds or KFC or you are asked to buy related products such as cookies with your coffee at Starbucks. The cross selling strategy is quite common at fast food restaurants to sell additional products and make more business from one customer.
3) Credit Card + Instant Insurance
Credit card companies usually sell instant loans to their credit card clients. Salesmen in banking industry use credit card data and use that data to recommend instant loans to customers who are likely to get loans.
Benefits of Cross selling
- Cross selling helps in increasing revenue generation without additional efforts.
- Customer’s satisfaction level improves.
- In B2B businesses, Customer Lifetime Value (CLV) increases with untold amalgamation in a customer’s business.
- Cross selling is beneficial for both businesses as well as for customers.
- Customers come to know about additional products to improve their experience with the products they bought.
Drawbacks of Cross-selling
- Cross selling sometimes can be annoying for customers and fails to generate sales.
- There is always a chance of a lack of planning or use appropriate data.
- Recommending useless products like trying to sell winter clothes to customers who just bought a swimming costume can drive away customers forever.
- using the wrong method to contact customers may lead to zero output. For example, trying to sell something to a customer who is comfortable communicating via emails.
- there is a customer segment who don’t like cross selling to them and end up returning or canceling products they bought.
3 Steps for cross selling to customers
It is important to identify which products are related to each other and go together before trying to sell it to your customers. therefore, answers to following questions might help such as
- What do customers usually buy additional products?
- What products are mostly purchased together?
- What products were sold together successfully in previous cross selling campaigns?
Having realistic answers to the above questions can help you to generate profit through cross selling. Follow the following steps to cross selling successfully to your customers.
Targeting the right audience is important for creating an effective cross selling strategy. Gather data for cross selling at every stage of the journey of customers. This information can be used for both in-person as well as digital communication with customers.
The information of customers like their browsing and purchasing histories, their records whether they have repeatedly returned products or canceled orders can be used to identify suitable candidates for the cross selling campaign. In addition to this, “look-a-like” (customers with similar characteristics and behaviors) candidates can also be added to the list of suitable customers for the cross selling campaign.
2) List out customers who are open for cross selling
Organize the information gathered through the customer’s purchase history and interactions. Use this information with marketing software such as CRM and it will be more effective when used with AI-assisted sales analytics.
Artificial intelligence can reach your customers automatically when customers show interest in certain products with the interference of staff every time. In this way, your marketing team will get extra time to interact with your customers personally that a machine can’t do.
3) Prepare a cross selling campaign and journey of customers
after identifying the customers suitable for the cross selling campaign, the next step you should take is to convert them. You should establish strategies for potential cross-sales. Cross selling through advertisements on social media is as effective as selling through emails to the customers who have just purchased something from an e-commerce website.
Try various techniques to reach customers for a high rate of success of cross selling and enhance your approach on the basis of analytical results.