Cross-selling is a practice and art of selling additional products and services to the customers who have already purchased something from your store. Cross-selling simply means additional or complementary product offering to your existing customers and to get additional spend out of them.
For example, when you buy shoes, the salesperson asks you if you would also like to buy socks.
Cross-selling is an effective sales tool to sell products to your existing customers where selling to existing customers is way much easier and beneficial than selling to new prospects. Like upselling cross-selling increases revenue, yes, that’s the first and foremost reason why every ecommerce business should use this marketing method.
Cross-selling is the best practice for selling non-expensive products like clothes, home accessories, daily products, and perishable products. The method is simple; offer relative or suggestive or complementary products to your customer after they purchased something from you. For example, if you sale baby products then offer your customers to buy baby wipes after they buy baby diapers from you.
The best example of cross-selling is Macdonald’s fries offering to their customers “Would you like fries with that…” or Amazon’s cross-sell product recommendation “…people who bought that also bought this….”.So the both are offering additional products and services to their customers after their first purchase.
Differences between Cross-selling and Upselling
People often confuse cross-selling with upselling. But these two concepts are different though both are sales technique to earn more revenue.
While upselling refers selling of a more expensive version of a particular product and service, cross-selling is selling recommended products as a complementary to customer’s first purchase.
For example, when you want to buy Toyota but end up with buying Ferrari, that’s an upsell method where salesman convince you to buy luxurious Ferrari instead of minimalistic Toyota. On the other hand, a cross-sell example is when you buy a smart phone and salesman shows you other gadgets and accessories related to your recent bought smartphone. Such as smart phone’s cover, screen protector or memory card.
Who do you need to cross-sell your products?
Cross-selling is an effective way to sell more to customers, especially to existing one. Most of the successful e-retailers efficiently use this method to increase their sales and conversion. You should cross-sell not only for gaining more money, but also for keep going your whole sales cycle. Cross-selling is kind of free advertisement of your products and it enhances your transformation level.
Various leading ecommerce company have gained more revenue from cross-selling. Cross-sell increases averages 4% of total revenue which is totally groundbreaking. Amazon the largest market place attributes up to 35% of its revenue from cross-selling.
Let’s have a look on how cross-selling helps you to gain extra money-
While selling products to customer in ecommerce is hard, cross-selling make this process easy by allowing e-retailers to sell more products to their existing customers. Everytime you cross-sell a related product to your customers when they purchase a products from you, you undoubtedly market your products to your customers. Thus you open a new sales funnel and could sell your second sale.
The point is that, you should target your existing customers as you already have known their taste, what they like to buy and how much they can spend to buy your products.
Your customer trusts you and that’s why they will buy products from you again and again. After the first payment you almost gain your customer’s trust and there a second chance to make them your loyal customers and that is cross-selling.
Cross-selling helps you to build a customer base and thus you can recover your costs. When you gain customers’ trust through offering them personalized related product list through cross-selling, there will be higher chance of successful sales. Cross-selling is the best technique to recover the cost when you fail to capture new prospects.
Customers generally prefer purchasing products from the same retailers from whom they get the most satisfaction and customer’s satisfaction largely depends on their first purchase. So you know customer’s purchasing history and when you cross-sell you would have retain your most of old customers. This is amazing right? When done right and effectively cross-selling drives the increased rate of customer retention.
How to cross-sell products for increased revenue
That is what cross-sell can do to your store. But you need to be the master or else you could hurt your business. Many ecommerce owners use cross-selling without understanding the rule and caused a great lose to their business. I pretty much sure you are not one of them. So here the best practices for cross-selling method to increase the both sales and revenue of your ecommerce store.
The first step is to understand your customers. It is so important because when you cross-sell any related products you have to understand whether you can make your customers happy or not. Customers’ demography helps to categorize products according to your customers’ needs and desire. If you offer any products that your customer does not need, you ultimately lose a potential customers and worst case scenario is that you could make them annoyed. So find out who are your customers, what they like and what are they searching in web. You can define your customers according to their age, sex, location, culture and religion.
Once you get these information, segment your customers into group and relate them with respective traits and criteria such as location, geographic or cultural traits and norms. Learning about their attitudes and beliefs will help you to understand why they are purchasing from you and how you can enhance the satisfaction level.
The most important part of practicing cross-selling is to make them relevant to your customers. Otherwise you will lose customer’s trust and loyalty.
List your products and their related products which you want to cross-sell. Establishing of relevancy helps you too define why your customers need to purchase you small complements after their big purchases. You don’t want to offer a vegan customer to buy steak with their salad! That is embarrassing.
In ecommerce you do not have the chance of saying “sorry” or “oh! my mistake”. Every mistake you do will cost you. Tie your comparatively low priced accessory products with expensive and luxurious products. For example, if you sell women jewelry then offer earrings when your customer buys a necklace from you.
Complementary products are products that are purchased with the main products. That means complementary products are additional products or services that you buy with your main purchase. These types of products are offered to maximize the value that is actually bought. For example, many coffee shop offer complementary donuts with their coffee which is not actually free but together with the cup of coffee and donuts you will have a great time.
In ecommerce complementary product offering is the best way to cross-sell your products. When your customers want to buy something from you, encourage their purchase by offering related complementary products with their desired products to get the best out of the product. It is not that you are offering something free; rather you are convincing them to buy the both products to get the maximum value.
Cross-selling product related service is great way to retain customers. Do not always cross-sell products instead offer complementary services for purchased products. This strategy works well with products that require technical installation. Many products like software for smartphone or laptop, shower doors, and furniture need to be installed which customers may not be able to do it. So if you sell these types of products offer installation services by yourself or via hiring a third party contractor.
The best time to sell another product to the same customer is the post purchase phase. Post-purchase product recommendation is regarded the most crucial sales tactic to sell more to the existing customers.
Most often time customers get annoyed by cross-sell promotions and recommendations during their browsing session or just before complete the checkout. This may make them buy the cross-sell products only or worse leave your site.
Just set a popup message contains products that might go perfectly with purchased items. You can include discount on these products or can promote your new products.
Another great strategy of cross-selling products is to sell products separately. In this way you offer a series of products to your customers which they would like to buy to complete their purchase. For example, if you sell mopping brush than tell your customer they also need to buy a floor cleaning detergent which is sold separately.
Do not pressurize customers otherwise they can be misguided and will think you set a trap for their extra cost. Make a clear product description and state where you are convincing them to by your products. Just give them a reason such as they can save their time of searching related products or this would be perfect mach if they by this second or even third product with their first products.
Sending cross-sell emails is great to retain your customers. When a customer buy product from you they need to sign up to your newsletter, so you have his/ her address. Now you know what your existing customer’s taste is and how to retain him/ her.
Send these registered customers a cross-sell email with related and new product recommendation that they may like to buy. You can set up automated email series where you can persuade them to buy your products.
Make sure your emails are well crafted and can draw customers’ attention. Start with simple reminder of their previous purchase and offer them your bestseller and new arrival products and end the email with a lucrative come-back offers or discounts.
Cross selling accessories is better than cross-selling real products. Tie your accessories with their respective products and show them to your customers after the payment. You also can showcase related accessories in your homepage or products page or even in cart.
For example, phone covers for smartphones, socks for shoes, camera bag for camera or others.
The most effective way to cross sell anything is to show customers what other people are buying. The point of this strategy is to use social proof to cross-sell your products. Amazon is the best example, they use the phrase “other people who bought this also bought…” to cross-sell their related products.
You may not want a customer who eventually makes you lose revenue. Yes, you would find that type of customers when you out there to sell your products. When cross-selling you need to determine whether your customer will help you to increase your revenue or not.
Where you only have 5-20% chance of making profit with new prospects, you will probably not to intend to offer cross-sell to them. Again you have to avoid customers who are service demanders and revenue reversers. Once you find these two types of customers immediately tag them and remove them from your cross-sell funnel.
The ultimate success of cross-selling depends on how you segment your customers, what are you offering them, if you are in time and off course if your cross-sells are relevant to your customers. Before get started, find out your customers’ taste, desire, and needs following them on social media channels and plan how to implement your findings. Once you have implemented your cross-selling techniques, track down its result and evaluate if necessary.