What Is Cross-Selling & How to Make Every Customer More Valuable

New customers aren’t the only individuals who can keep your monthly revenue on an upward trend. In fact, if you want to maintain a steady line of growth, your current customer base should always be included in your game plan. In fact, returning shoppers are not only cost-effective to maintain, but they also spend 67% more than first-time buyers. With cross-selling, you can activate the power of existing customers—the strategy encourages repeat buying behavior and helps you decrease churn.

What is cross-selling?

Cross-selling is a sales technique that helps your local business increase revenue by encouraging shoppers to invest in products that are related to their current selections. The tactic can be put into action as soon as a buyer adds an original item to their shopping cart, whether in-store or online. Then, a team member or an automated system can narrow down and suggest additional items based on their selections. Successful cross-selling occurs when your customer gains interest in a suggested product, adds it to their cart, and checks out.

For example, cross-selling happens when your internet provider suggests bundling your WiFi with cable, or when a McDonald’s employee suggests adding fries or a drink to your order. The companies that are best at cross-selling suggest additional products based on rich data including past purchase histories, buyer personas, and customer challenges.

Cross-selling has the power to improve your average customer lifetime value and customer retention rates. As Steve Jobs once said, people often don’t know what they want until you show them. And once they already plan to spend, they’re often willing to purchase a suggested add-on if it’s going to be of value to them. You’ll likely find that many of your current customers are open to (and even appreciate) personalized and helpful sales and service support like this throughout their customer journey.

Benefits and Importance of Cross-Selling

When you work so hard executing a successful marketing strategy, you don’t want customers to make one purchase and then disappear. You want to create a long-term relationship with them. That’s what cross-selling can do for your business. How? Well, cross-selling:

1. Improves customer satisfaction. 

Cross-selling doesn’t just benefit your business—it benefits your customer too. The more you can help your customers find the right solutions to their challenges and offer stellar support throughout the customer journey, the better your customer satisfaction score. 

2. Increases customer lifetime value.

The more products a customer buys, the higher their lifetime value. This happens by suggesting complementary items before they check out or encouraging current customers to return to make a follow-up purchase.

3. Boosts referrals.

If your customers don’t know about a new product you have, they can’t buy it or recommend it to other people. So the more products and features customers try out themselves, the more opportunities they have to refer to and vouch for your business. 

Cross-selling vs. Upselling: Key Differences

Though cross-selling and upselling have similar functions—upping the value of a purchase—there’s a distinct difference between the two strategies. While the goal of cross-selling is to get shoppers to buy related or complementary products, the goal of upselling is to get them to upgrade the original purchase that was desired.

As an example, let’s look at how Amazon cross-sells. On almost every product page, the ecommerce website displays items that are frequently purchased with the product that you view, as well as sponsored products that are related to the item being purchased. These suggestions are for completely different products that a customer would buy in addition to the item they were initially interested in.

On the other hand, when you look at an official product page for Amazon smart speakers, you’ll instead see a “Compare Echo devices” section. This is upselling. Instead of encouraging shoppers to buy add-ons, it shows you alternatives for the same product. The company doesn’t expect you to purchase multiple smart speakers, but it tries to persuade you to buy a more expensive speaker with additional features.

Cross-selling and upselling are effective when you want to increase a current customer’s spending. Knowing which one is best for your situation can help you better form a sales strategy for your product or service.

How to Create a Successful Cross-Selling Strategy: Tips and Best Practices

It’s one thing to understand what cross-selling is, but learning how to put it into action is another. Whether you own an online store or a brick-and-mortar location, you can soon increase your average order value. That is, as long as you put effort into creating a great plan. To help, here are four examples of how you can guarantee results with your strategy.

1. Help consumers solve a problem.

When your cross-selling doesn’t benefit your customer in any way, the buyer can see it as a bothersome (and obvious) money-making tactic. Think about it: If you choose to buy a bag of dog food online, you don’t want an unsolicited suggestion to add cat litter to your cart. In order to boost or maintain your current levels of customer satisfaction, you need to make cross-selling a natural part of a seamless experience.

For instance, when someone purchases a smartphone case, it’s a great idea to suggest a screen protector. This is a complementary item that can complete their solution for protecting their phone. With a quick suggestion from your team member or your website before checkout, you additionally save your customer the time they would have spent browsing through your shelves or catalog.

When you cross-sell products that are meant to be used together, don’t forget to make sure they function properly as a unit. You don’t want to lose trust by suggesting a Google Pixel screen protector for someone who added a Samsung Galaxy case to their cart.

2. Create bundles for your customers.

Many companies choose to build bundles that help customers save money. It’s common for sellers to offer a discount for choosing the full package over buying each item individually. This not only ups the perceived value of a cross-sell, but it also can convince customers to add a few extra dollars to receive items they didn’t necessarily need.

Bundling related items is a great way to sell more products while saving customers time. For shoppers who already plan to purchase multiple items, this strategy pushes them to checkout faster. For the rest, bundling can show the value of getting more than one item and indicate a bundle is in demand by other buyers.

3. Limit your suggestions.

While it can be tempting to list a large number of related products in hopes one catches your buyer’s eye, you don’t want to overwhelm a customer with suggestions. This can confuse customers, make their decisions harder, and make it less likely for them to listen to your suggestions.

A better alternative is to list out a small amount of carefully selected items—no more than five is a good benchmark. By reducing your suggestions, your cross-selling strategy will feel more personalized and tailored to the current customer. In addition, cross-selling increases the likelihood that a buyer will choose all the add-ons by making them more approachable.

4. Take advantage of data. 

Your cross-selling strategy should leverage the data you have about your customers. Businesses all around the world are using customer relationship management (CRM) software, automated feedback tools, surveys, and other strategies to learn more about their customers, the products and services they purchase, and what persuades them to buy more.

A few questions you may want your data to answer include:

• What products have sold together in the past?
• What types of products do specific segments of my customer base prefer?
• When do customers respond to your marketing or sales tactics the most?
• How much are customers willing to add on to their carts on average?

Track your success and refine as needed to fully take advantage of data collection and interpretation.

5. Consider behavioral segmentation.

To maximize your cross-selling efforts, your complementary product recommendations need to meet customers’ needs. Increase the chance of achieving that by introducing an element of personalization through behavioral segmentation. By tracking the web pages customers are browsing (i.e., their online behavior), you develop an understanding of their wants and needs, goals and problems, and motivations—all of which make it easier to suggest relevant products.

6. Implement thresholds.

While it’s not a traditional cross-selling strategy, retailers have had a lot of success encouraging customers to buy more products through thresholds. This is when a certain level of spending needs to be met to unlock a benefit like a discount. An example of this in action is when online stores offer free delivery for orders over a certain monetary value.

The 4 Best Cross-Selling Techniques and Strategies With Examples

1. Offer additional services.

If your customer is buying one product or service, what else do you offer that they could they benefit from? For example, Amazon often offers warranties when customers order a tech product.

2. Pitch promotions.

An item being on sale is the perfect opportunity to promote it as an additional product for a customer to purchase, particularly if it’s a product of higher value than the original order. For example, Amazon promotes its top deal of the day on its homepage. 

3. Provide complementary items.

Another product may go hand-in-hand with the item your customer is already considering purchasing. In fact, it may be necessary to purchase another product like in the example below—batteries are required for this wireless mouse to work. 

4. Offer rewards

Incentives make encouraging customers to add to their orders easier. Offer a benefit following through with purchasing additional items such as a discount or a bonus like free shipping. 

3 Solutions to Increase Your Sales

Here are some tools to help your business get the most out of your cross-selling strategy and simultaneously improve the customer experience. 

1. Collect customer reviews. 

Positive customer reviews help your business attract new customers who you can cross-sell to. Customer reviews also help your brand gain authority on search engines like Google. To increase the number of reviews your local business collects, use a free link generator.

2. Use text marketing.

An effective communication channel for cross-selling is  text marketing. The convenience, simplicity, and ease of texting your customers make for high conversion rates. If you’re unsure what to include in your text marketing cross-selling campaigns, check out our free text templates.

3. Implement web chat on your website.

Meet customer’s needs in a timely and convenient manner by adding a web chat to your website. By providing your customers with access to one of your reps through web chat is an effective avenue for a cross-selling conversation. Not sure web chat makes sense for your business? Try it out on your website.