Cross-selling is a way to sell more products and drive revenue without acquiring new customers. It’s related to, but different from, upselling.
In addition to driving revenue, cross-selling can demonstrate your commitment to a client’s needs and drive customer success. On this page, we go over the concept in detail.
What is Cross-Selling?
Cross-selling is selling complementary products or services to a converted customer.
For example, let’s say you’re selling customer relationship management software. As a cross-sell, you might sell payroll outsourcing services. These are not exactly an extension of your core product, but still potentially valuable to your audience.
Cross-sell products should align with the current product a customer bought from you. They should also offer additional value.
In a perfect world, cross-selling creates win-win situations. When done right, it creates value for your customer base while also driving revenue. This can increase your own core product’s perceived value and strengthen relationships.
Key Benefits of Cross-Selling for Businesses
There are several reasons a business should consider a cross-selling strategy:
- Increased Revenue. Offering complementary products can encourage customers to make additional purchases. This, in turn, increases customer lifetime value and grows profit margins.
- Improved Customer Retention. A satisfied customer is more likely to buy from your business again. They’re also more willing to sign longer contracts if they deem your cross-sell to be beneficial. Cross-selling can drive down churn rates in this way.
- Enhanced Product Visibility. When you cross-sell products, you can place new or unpopular products in the spotlight. Cross-selling is a good way to jumpstart sales for products customers may be unfamiliar with.
- Stronger Customer Relationships. Offering relevant add-on products or services creates value for your customers. It shows you are working to deliver the very best experience and maximum benefits.
The Difference Between Cross-Selling vs. Upselling
The main goal of both cross-selling and upselling is to increase the value of a transaction. But, there are some key differences.
Cross-selling aims to add related products or services to an existing purchase. These products or services would add more value to what a customer is already purchasing. An example would be suggesting a screen protector to a customer who is about to buy a smartphone.
Upselling encourages customers to purchase an upgraded version of a product or service. This is generally the same product with better features or extra functionality. An example would be offering a customer a premium software package instead of their minimal subscription.
How Cross-Selling Enhances Customer Value
An increase in customer value is one of the main reasons why cross-selling is so popular. Here’s how it boosts the customer experience:
- Personalization. Customers always respond more positively to a personalized experience. When offered products and services that align with needs, customers feel seen and heard.
- Convenience. Cross-selling saves customers time and effort by anticipating their needs. Offering complementary products now means customers don’t need to seek them out later.
- Increased Satisfaction. When a customer feels valued and taken care of, they’re more likely to stay loyal to a brand.
Best Practices for Cross-Selling
There is little room for pushy sales tactics in cross-selling. Customers are already buying from you. They are likeliest to buy more from a partner that understands their needs and challenges.
Here are a few cross-selling best practices to follow:
Leveraging data and analytics is a strong way to incorporate cross-selling into sales. For example, do customers often ask about complementary products of a specific type? Look at support conversation data to find specific instances. Once you do, come up with a cross-sell based on that data.
Building trust and transparency is also key for cross-selling. Prioritizing long-term partnerships helps identify cross-sell opportunities and time them well. Gradually learning customer needs is the best way to get good at cross-sales.
Sales enablement is another cross-selling best practice. Sales teams that know how and when to cross-sell have a greater chance of success. Making sure your team is one of these with timely training works wonders.
