Mastering cross-selling

Many people get confused between up-selling and cross-selling, and in this article, Colin Sinclair McDermott, aka The Online Print Coach, will aim to help you better understand the difference.

Cross-selling is essentially selling an additional product or service to a customer.

I’m sure many of you have fallen into the Apple Ecosystem over the years. Apple clients typically stick with them for various products. Phones, tablets, laptops, watches, and earphones, to name a few. Consider this in your case: selling a beanie hat alongside a hoodie or a jacket. Cross-selling works for companies like Apple because trust is built with one product, leading to the increased likelihood of additional purchases, and this can work for your business, too.

There are some key differences between up-selling and cross-selling. Upselling is selling a more expensive or upgraded version of the original product, e.g. 20 beanie hats instead of 10. Cross-selling is selling a complementary product as suggested above, and typically, it generates more incremental revenue than up-selling.

Cross-selling offers more cost-effective growth. Acquiring new customers is more expensive than selling to existing ones. It allows you to increase your Average Transaction Value and also strengthens your customer’s loyalty.

Cross-selling formula

There’s a cross-selling formula I recommend to the clients I work with:

• Step 1 – Identify complementary products for your core offerings.
• Step 2 – Educate your customers on the value of these additional purchases.
• Step 3 – Bundle products to create more compelling offers.

There are some common pitfalls you should try and avoid though. Firstly, you want to make sure you’re not pushing irrelevant products. Always make sure they align with your customers’ needs, and try not to overload them with too many options. Keep it simple! Ensure you don’t focus on sales over solutions. Position these additional products as a value add, not just a sale. If you have a team responsible for liaising with your customers, make sure they understand the strategy.

Timing is key

Timing is key in the event of cross-selling and you need to introduce your cross-sell products at the right moment. Use your CRM/MIS insights to tailor recommendations that fit, and as suggested, use bundling to package complementary products together for better perceived value. Another tactic that works well is to reward those clients who are already loyal to you. Offer them exclusive deals that are not open to anyone else.

Having successful case studies from other similar customers can also go a long way when building your cross-selling strategy. If you can show them how a company just like theirs increased its revenue through purchasing one of your bundled packages, it will build trust and show that you understand their business’s requirements.

An exercise you might find useful is to create a T-Chart. Ultimately, take an A4 sheet of paper and draw a straight line right down the middle. At the top of the page, write down one of your core products. On the left-hand side, list potential up-sell options, and on the right-hand side, list the cross-sell option. This will help you identify your best cross-sell strategy.

To ensure this is working for you, set some potential goals and track your progress. Use KPI’s to measure your cross-selling success. The key metrics you want to look at are Average Order Value, Attach Rate (how many people take you up on it), and Customer Lifetime Value. Collect feedback from your customers on the bundles you have created for them and if need be, you can refine the process with real data.

Good luck with it!