Cross-Selling Simplified!!! Best Practices & Strategies in 2022

Cross Selling
MarketBridge

What Exactly Is a Cross-Sell?

The process of selling a separate product or service to a customer in order to raise the value of a sale is known as cross-selling. It is oftentimes mistaken with upselling, which is defined as anything that raises the price and functionality of the original purchase.

In simple terms, cross-selling is the practice of selling similar or complementary products to a consumer. Cross-selling is one of the most effective marketing strategies. It is a sales tactic used to persuade a consumer to spend more money by purchasing a product that is linked to what is already being purchased. Some instances of cross-selling in the financial services business involve selling different kinds of investments or goods to investors or tax preparation services to retirement planning clients. For example, if a bank client has a mortgage, the sales team may try to cross-sell a personal line of credit or a savings product such as a CD to that client.

In a more basic form, consider the following scenario: a fast-food employee asks if you want fries with your burger. The fries are a “product” that complements the burger. An upsell could be an upgrade, an additional pricey item, or an add-on to a previous purchase.

Examples of Agency Cross-Selling

If a customer hired you to design ad visuals in an agency setting, you could cross-sell them on post-click landing page design services. If a client hired your firm to create a website, you could provide copywriting for each page’s content. Both instances show how a company tries to promote a more expensive product.

How Does Cross-Selling Work?

Cross-selling to existing clients is one of the most common ways for many organizations, including financial advisors, to generate additional revenue. This is one of the simplest ways for them to expand their business because they already have a relationship with the client and are familiar with their desires and aspirations.

However, advisors must exercise caution when employing this strategy—a money manager who cross-sells a mutual fund that invests in a different industry can be a beneficial approach for a client’s portfolio to diversify. An advisor who tries to offer a client a mortgage or other product that is outside the domain of the advisor’s understanding might cause problems in most cases.

Cross-selling can result in substantial earnings for stockbrokers, insurance agents, and financial advisors if done rightly. Insurance and investment products can be sold to tax clients by licensed income tax preparers; this is one of the simplest sales to make. Effective cross-selling is both a solid company practice and a useful financial planning technique.

Examples of Cross-Selling

According to reports, Amazon credits up to 35% of their sales to cross-selling via its “customers who bought this item also bought” and “often bought together” options on every product page. This method enables a retailer to persuade a customer to purchase a complementary – or necessary – product.

Cross-selling examples include:

  • A salesperson at an electronics store proposes that a customer purchasing a digital camera also purchase a memory card.
  • An eCommerce site’s check-out form prompts the consumer to add a popular related product or a required item that is not included in the product being purchased.
  • When purchasing a new vehicle, a new car salesperson may recommend that the buyer add a cargo liner or other aftermarket goods.
  • A clothes retailer displays an entire outfit so that the shopper can see how the pieces go together and buys the entire outfit rather than just one piece.

What Is the Significance of Cross-Selling?

Assume you own a company whose best-selling product costs $10 and earns $10,000 each month. You’ve been tasked with improving overall income, so you launch an expensive optimization campaign focused on acquiring new customers.

After a lengthy effort, you were able to obtain a 10% increase in overall revenues or an extra $1000 per month. That’s not too shabby.

A company with the same sales record, on the other hand, decides to focus on a cross-selling strategy. They recommended a $5 supplementary product for every $10 item added to a cart. The campaign is almost free to implement and can be up and running in a fraction of the time that your optimization campaign takes.

However, cross-selling effectiveness varies, but if we assume this campaign has a 35% success rate (the same as Amazon), monthly income increases by $1,750. That’s an extra $750 each month for a fraction of the work and cost and in a much shorter amount of time.

Cross-selling is one of the most successful methods for increasing overall revenue. However, don’t think that simply giving more products to your prospects will be enough.

Upselling vs. Cross-Selling

While cross-selling and upselling are sales techniques used to get clients to buy more, there are certain distinctions to be made.

Upselling, often known as suggested selling, is the process of convincing customers to buy a more expensive or upgraded version of a product or service. The goal is to increase earnings while providing a better client experience. This can lead to a rise in the customer’s perceived value as well as an increase in Customer Lifetime Value (CLV)—the total contribution a customer commits to a firm.

Companies are 60-70 percent more likely to sell to an existing client than to a new customer, but the possibility of selling to a new consumer is 5-20 percent.

In other words, upselling to an existing customer base is easier for businesses than upselling to a new consumer. Existing customers believe in the brand and value the products and/or services. The success of upselling is driven by this trust. For example, if a customer trusts a brand, they will generally trust the brand when it gives what appears to be a superior option.

Cross-selling, on the other hand, is a sales technique in which clients are tempted to buy things that are related or complementary to what they want to buy. Cross-selling strategies include promoting, discounting, and combining related products. By addressing and satisfying consumer requirements, the corporation hopes to generate more money per client and boost perceived value.

The Benefits and Drawbacks of Cross-Selling

Like we earlier mentioned, cross-selling is one of the most effective sales methods used by businesses to enhance revenue. Cross-selling entails more than just suggesting other products to customers; it also necessitates ability. The company must comprehend consumer habits and demands, as well as how complementary products meet those needs and offer value.

Customers buy from brands they know and have had good experiences with. As a result, selling to an established customer is easier than selling to a new one. Plus existing consumers are more inclined to buy things that are related to or complement what they are already planning to buy. Consumers become more devoted to a brand as they use more of its items.

Cross-selling, on the other hand, can have a negative impact on client loyalty. When done incorrectly, it might come across as a forceful, self-serving sales strategy. This is visible when a salesperson aggressively tries to offer a related product or tries to sell without first knowing the customer’s need for it. Not only does this have an impact on sales, but it also has a negative impact on the brand’s reputation.

Furthermore, cross-selling to the wrong type of customer could be detrimental.

Some clients have high service expectations, and the more products they purchase, the more service they want. As the demand for their services grows, so do the costs of providing those services.

Finally, some customers return or swap things on a regular basis. Profits are not realized when cross-selling to this category. Their purchases initially create significant sales; nevertheless, they frequently return or default on payments, costing the organization more than the customer-generated revenues.

Below are listicles of these benefits and drawbacks.

Pros

  • Increased earnings
  • Enhanced brand loyalty
  • Customer requirements were met.

Cons

  • Rise in service-related costs.
  • Perception of pushiness and aggression
  • Deterioration of reputation

Real World Examples of Cross-Selling

In 2013, a number of Wells Fargo employees in Southern California opened new bank and credit card accounts for unsuspecting consumers without their knowledge.

This was to satisfy cross-selling quotas. More than 30 employees were fired as a result of an internal probe.

To determine the extent of the problem, Wells Fargo commissioned an independent consulting firm to evaluate new accounts opened since 2011. They also developed new procedures for authenticating new accounts and put in place new training programs and security protocols.

Over a 5-year period, the consulting firm discovered that over 2 million accounts (the number climbed to 3.5 million accounts in 2017) were fraudulently opened, with 115,000 of those accounts incurring costs. Wells Fargo refunded more than $2.8 million to affected consumers, and over 5,300 employees were let go. Former CEO John Stumpf resigned without warning or explanation.

Wells Fargo was fined $185 million for this scam in 2016. As a result, FINRA, the independent regulatory body for U.S. securities firms, has launched an investigation into cross-selling practices at 14 broker-dealers, with a spokeswoman recently stating,

“In light of recent issues related to cross-selling, FINRA is focused on the nature and scope of broker-dealers’ cross-selling activities and whether they are adequately supervising these activities by their registered employees to protect investors.”

3 Effective Cross-Selling Strategies

Whatever services you provide, the key to success is in your approach.

Cross-selling requires a certain amount of talent and flair to pull off effectively. Your approach must be subtle; otherwise, the customer will be turned off. Here are a few pointers to help you improve the success of your cross-selling strategy:

#1. Make Use of Drip Emails

Rather than attempting to make an additional sale at the beginning of a new relationship, it may be advisable to wait a few days or weeks before selling a client on any service. In light of this, you can set up a drip campaign to automatically follow up instead of manually reaching out via email.

Consider a client who purchases one of your firm’s web design packages. You might add them to a drip campaign that introduces them to the value of copywriting in one email, outcomes that some of your clients have gotten from your copywriting services in another, and then send them an offer in the third email.

This is a better alternative to immediately trying to sell a client an additional service. You can explain the benefits without coming across as forceful by sending a series of emails first.

#2. Wait Until You Can Provide a “Win”

Another strategy is to spend some time working on a client’s project. Clients will be more ready to invest in your additional services if you can demonstrate measurable results.

During this period, you will also be able to build a stronger relationship with them and create a more specific plan for them. That’s because you’ll have firsthand knowledge of the client’s marketing strategies prior to hiring your firm, as well as what works and what doesn’t.

#3. Align Services With Client Objectives

Just because you provide web design services, for example, does not mean your client requires a completely new website. As a result, you must analyze a client’s objectives and how your additional services relate to them.

If a higher traffic is their goal, you may offer PPC advertising, SEO, or content marketing. Web design can play a role in a ton of services (e.g., building post-click landing pages, posting blog entries, etc. ), but you should include them into your overall offering and illustrate how each service will assist the client reach their objectives.

This way, you’re delivering value rather than trying to sell the client something they don’t need in order to make a profit.

Common Cross-Selling Best Practices

With so many options for cross-selling, here are a few of the most frequent tactics that digital marketing agencies can use:

#1. Offer Additional Services

Offering additional services is one hell of a strategy to cross-sell clients. For example, if you sell software, you might think about selling a complimentary service, or vice versa. So, if your company sells SEO software, you may offer link-building services.

Screaming Frog is a web crawling program and SEO agency that does exactly that. They offer SEM, SEO, and Social Media Marketing services in addition to their web crawler tool (SEO Spider)

#2. Provide Complementary Items (Bundle Sales)

Another typical approach to execute a cross-sell is to bundle sales. This strategy is frequently used by Amazon in their “Frequently bought together” section:

In an agency, you might combine SEO and SEM services to achieve both short-term and long-term ranking objectives. Another example is combining the content and design of an ebook.

#3. Make Data-Driven Suggestions

You can sell more products or services by reviewing a client’s previous interactions with your website and transactions.

If you notice a client exploring your website, reading blog posts on digital advertising strategies, and downloading advertising-related ebooks, you can contact them directly and introduce them your PPC services.

Many CRMs, such as HubSpot and Agile CRM, allow you to assign website activity to any contacts you have.

#4. Pitch Promotions

If you are currently running a promotion for one of your services, this is an excellent opportunity to cross-sell a client. This method appears to be an attempt to promote a transaction rather than directly targeting a client, therefore there is a less inherent risk associated with it.

For example, if you are offering a Black Friday discount on your social media marketing services, you may notify your content marketing clients of the promotion. They might be interested in the service as a method to market their material even more.

#5. Educate Your Customers

Finally, some clients may be unaware of the value of your range of services. They may recognize the need of SEO, but the benefits of specific SEO services (link building, content marketing, and mobile-friendly web design) may necessitate more education.

You can demonstrate the benefits of each service and how they may apply to your client by educating them. Sending them ebooks, related blog entries, or enrolling them in an email course are all tried and true ways to demonstrate your knowledge and educate them.

They will be more likely to consent to further work after they realize how each service may benefit their firm.

When Is the Most Effective Time to Cross-Sell?

Knowing when to cross-sell is as vital as, if not more important than, making the first sale. If you try to sell to a client at the wrong time you run the risk of ruining your connection in the future or completely invalidating the initial transaction.

There is no single strategy or criteria that determine the optimal moment to cross-sell.

However, by remembering the main purpose of cross-selling – persuading a consumer to buy a service that complements their original purchase — you can plan the transaction perfectly.

How Can You Develop a Successful Cross-Selling Strategy?

With a cross-selling effort, your major priority should be ensuring that your offer is relevant. You want to provide greater value to the customer rather than generate hesitation and extra friction.

If a prospect adds a fitness DVD to their shopping cart, you’d be hard-pressed to sell them smoking paraphernalia or a double chocolate gateau. These items may have a negative impact on overall conversions. It’s not always easy to find the ideal supplemental product. Fortunately, there are five excellent cross-selling tactics that should also assist you in determining the best things to offer.

#1. Employ Behavioral Segmentation

In a word, behavioral segmentation allows you to establish customer cohorts and send customized offers based on their internet behavior.

This means that you may segment your website visitors or existing customers based on the sites they visit and the products they view (their behavior), allowing you to better understand their goals and concerns. You may then serve your product recommendations in real-time, making them relevant straight away.

#2. Create a Map of Your Client Journeys

Even the most relevant offer can fail if it is served at the wrong moment. Customer path mapping allows you to find the optimum touchpoints for repeat contact and cross-sell.

Assume you’re Nike, and you already have a consumer who has purchased a pair of cross-training sneakers from you. They’ve also installed the Nike Training Club app. After a week, they’ve returned to your web store multiple times to look at other cross-training products. They’re clearly intrigued, so now is a good opportunity to follow up.

Knowing their previous purchases and online behavior advises you what auxiliary items to offer and when to offer them.

#3. Offer Supplemental – But Not Essential – Products

In some businesses, a few tiny extras can dramatically increase the usability of a product. Consider the IT industry. Because of the numerous add-ons and enhancements available, it is a great business for cross-selling supplemental products.

For example, a customer purchasing a television is likely to be satisfied with little more than the television itself. Their satisfaction with the goods, on the other hand, can be enhanced by a wall mount, HDMI connections, or a fresh new sound system.

Offering add-ons rather than must-haves improves the consumer experience. Cross-selling will not be effective if the client is angry that they would be unable to fully utilize the original product without purchasing ancillaries.

#4. Use a Social Approach

Every other way of cross-selling differs slightly from the social approach. It’s most famously employed by Amazon, which has an “often bought together” feature on every product page. Furthermore, it’s unique in that it doesn’t rely on pre-programmed algorithms, product sets, or “expert” suggestions. It offers dynamic product couplings by leveraging the browsing and purchase habits of a larger client base.

It’s an exceptionally effective strategy since the product combination choices aren’t always connections you’d make or suggested by industry experts, yet they nevertheless function incredibly well together.

#5. Order thresholds

This is one of the most common cross-selling strategies, and it can be seen at all levels of product sales. Because you are not actively offering a supplementary product to your prospects, it is technically not cross-selling. You are, however, encouraging customers to spend more by informing them of an order discount threshold.

Although it is not a traditional way of cross-selling, it is extremely effective in improving AOV and overall income. It was the cornerstone of a campaign we conducted for M&S France that resulted in a 13:1 ROI and over 3,000 new leads.

By offering this deal, you are creating a win-win situation for all parties involved. You, as a company, are boosting your AOV, while the consumer, despite spending a little more money, is receiving a lot more bang for their buck. When combined with the usual cross-selling strategy of proposing other products, this can have a significant impact on your overall AOV and income.

Final Thoughts

Whether you choose the traditional route and promote individual goods for your cross-selling campaign, or you rely on a bundle or offer to sell more products and raise AOV, remember the golden rule of cross-selling:

It’s all about adding value to the customer’s experience by promoting similar products.

Instead of focusing on what will create the highest lift for your company, consider what will deliver the most value. You may end up promoting products that result in a lesser AOV gain, but you will construct a lot better campaign that will withstand the test of time and continue to generate a solid return for months or years to come.

Cross Selling FAQs

What is cross-selling example?

Cross-selling examples include fast food establishments asking, “Do you want fries with that?” eCommerce websites that display “customers who also bought” A mobile phone retailer suggests to a customer that they get a new case for their new phone.

What is cross-selling and up selling examples?

For example, encouraging a consumer who has just purchased a new phone to purchase a protective case at the same time is a cross-selling success. Upselling is when you increase a customer’s value by encouraging them to purchase additional services or a more expensive model.

Why is cross-selling bad?

Cross-selling, on the other hand, can have a negative impact on client loyalty. When done incorrectly, it might come across as a forceful, self-serving sales strategy. This is visible when a salesperson aggressively tries to offer a related product or tries to sell without first knowing the customer’s need for it. Not only does this have an impact on sales, but it also has a negative impact on the brand’s reputation.

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