What is Cross-Selling?

Some examples of cross-selling include an electronics retailer offering a deal on a computer case, mouse, and screen cleaning wipes to a customer who purchases a new laptop, or an insurance provider offering renters’ insurance to its car policyholders.

The main benefits of cross-selling include increased sales revenue, improve customer satisfaction and in B2B businesses, increased Customer Lifetime Value (CLV) through deeper integration in a customer’s business.

When it works, cross-selling is great for both you and for your customers. The ideal situation is one where your existing customer is not aware of a product or service that would improve their customer experience. You find them on their customer journey at the ideal point, via their preferred contact method, and they react positively and go on to purchase the recommended product. Your sales increase, and their customer satisfaction increases because the product better fits their needs.

When it doesn’t work, cross-selling can be annoying for customers and ineffective at generating sales. This is almost always down to a lack of planning or appropriate data. If you recommend a product that makes no sense - for instance, promoting winter clothing to a customer who just bought a bathing suit - you may drive that customer away. If you approach a customer by phone who would typically place orders via email, you may not be able to make contact.

And strangely enough, cross-selling is not always a great idea, even when it works. According to a Harvard Business Review study published in 2012, certain types of problem customers can actually make cross-selling a profit-losing strategy. According to Denish Shah and V. Kumar, some customer types can put stress on your customer service staff, whether by returning or cancelling a large number of goods and services or withholding spending in other areas to spend on your cross-selling promotions.

It’s crucial to analyze customer data and metrics related to your cross-selling marketing campaigns to evaluate which efforts produce cross-sales without reducing overall profitability, and which customers should be left out of cross-selling or approached with different methods, such as upselling. In general, cross-selling too many options to too many customers can be a losing endeavour if you don’t have a well thought out strategy in place.

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 convince your customers to respond to cross-selling efforts, you need to identify which products and services go together: What do customers typically buy as add-ons to their purchases? What products are usually purchased together? Or even, what products have been successful in previous cross-selling campaigns? Solid data makes all the difference.

Say your company is a fitness centre: Do some of the members often buy drinks at your front desk? They might be interested in a supplementary beverage program for a flat monthly fee. Or maybe your online electronics shop has wireless headphones that could be marketed to recent smartphone buyers - these customers may even have browsed for headphones, but left them in their shopping carts without purchasing.

The next step in creating effective cross-selling campaigns is targeting the right audience. Identifying cross-sell customers starts with the data you gather from your customers at every stage of their customer journey.

You can use information about in-person and digital communication your company has had with customers, their purchasing and browsing histories, whether they’ve repeatedly returned merchandise or cancelled services. All of this information can help you identify the best candidates for a cross-selling campaign. You can also target “look-a-likes” who demonstrate similar behaviours or characteristics to these customers.

Organising the information you receive through customer purchase histories and interactions is infinitely more effective when you use sales and marketing software with effective tools for CRM, and even better when coupled with AI-assisted sales analytics. Artificial Intelligence tools can automatically contact customers who display interest in certain products without the need for your staff to set up a new campaign each time. This frees up your marketing and sales staff for the more personal interactions that machines can’t perform.

Once you’ve identified customers who are ideal candidates for cross-selling, you’ve got to convert them. You then need to develop a strategy for presenting the potential cross-sales. If you have an online store, cross-selling through ads that appear during the checkout process can be effective, as can email campaigns targeting those who recently purchased a product. For higher cross-selling conversion rates, test out different approaches to making contact with customers, and adjust your approach based on analytics-based results.

Now that you’ve identified the customers you’d like to approach and the products you’d like to cross-sell, here’s some advice about techniques and some cross-selling tips to keep in mind:

• Offer the customer additional products and services that will genuinely provide them with added value: Think about cross-sales from your a customer’s point of view, not just in terms of how much revenue you think you can generate. If you're utilising a CRM, fewer well-placed offers are far more valuable than a greater range of offers that don’t benefit your customer relationships.
• Find your customers at effective touch points on their customer journey: If they’ve used your website to place orders, email or targeted ads might be the best method for cross-selling. If they’re more likely to visit a store in person, a salesperson is more likely to cross-sell additional products and services to them in person or on the phone.
• Use your existing inbound marketing campaigns to promote supplementary products and services: If you have content targeting an audience that buys luxury cars, for instance, you can include ads for car accessories on your blog posts and product descriptions to encourage cross-sales.
• Make effective use of the data your customers provide: The new generation of consumers expects personalised service, even when it comes to upselling and cross-selling, and the tools for providing that through solid data are out there.
• Encourage cross-sales by creating spaces for interaction between customers: An online community for skateboard buyers may be as effective at encouraging sales of additional wheels and other parts as your direct marketing efforts.
• Make use of social selling techniques: For example, social media influencers are a valuable tool for reaching the widest possible audience in the current, predominantly digital sales environment. Offer incentives for influencers who already promote your products to mention supplementary products on their social media channels.

When handled with care, Cross-selling can be an effective way to increase sales revenue for your company. While you should take advantage of potential cross-sales, you need tools for gathering and analysing data to use cross-selling in a way that benefits your business and your customers.

Managing your marketing and sales data intelligently gives you a competitive edge on your cross-selling efforts, thanks to sales AI. Find out more about Salesforce’s cloud software and Tableau CRM with a deep dive into AI.

• What is cross-selling? Cross-selling is the process of offering a customer products that are compatible with the ones they’re purchasing.
• What’s the difference between cross-selling and upselling? Upselling is the practice of selling a more expensive product to a customer, while cross-selling is offering supplementary products.
• What’s an example of cross-selling? An example of cross-selling would be offering a deal on a computer case to a customer who purchases a laptop.
• What are the benefits of cross-selling? Benefits of cross-selling include increased sales revenue, improved customer satisfaction and increased Customer Lifetime Value (CLV).
• Are there drawbacks to cross-selling? When it doesn’t work, cross-selling can be annoying and ineffective. This is usually down to offering incompatible or inappropriate products.
• What are some steps for cross-selling to customers? The most important part of any cross-selling strategy is identifying products or services that are compatible with one another. After that, it’s identifying which customers are most likely to benefit.
• What are some cross-selling techniques? When cross-selling, it’s important to always try to add value to the customer experience. You’ll also want to make sure that you’re offering the appropriate products at the appropriate touchpoints.