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What is meant by cross-selling?

Cross-selling is a marketing and sales technique that is all about selling an additional (usually complementary) product to the customer along with the main product that they intended to purchase. It’s basically where you’re saying “If you’re buying that product, you would probably want to use this one along with that, and you can buy that right here, right now, instead of realizing later and having to find another store that sells this”.

Here’s an example of cross-selling. Let’s say you reach out to a digital marketing agency to get them to handle your social media marketing activities. They’re ready to take the gig on, but they even pitch their performance marketing services to run ads for you on Google. 

Here’s another one for the eCommerce folks. You’re looking for a specific product. You land on the product page and there’s a couple of sections titled ‘Customers who bought this also bought’ or ‘You might also be interested in’. 

Even if you go to a fast-food outlet and order a burger, you’re being cross-sold when they ask ‘Would you like a side of fries with that?’

Source: Marketing91

What is the purpose of cross-selling?

The whole purpose of cross-selling is to increase your order value by getting customers to spend more by buying an additional product (or products) that is/are related to the product that they were already intending to purchase.

Why is cross-selling important?

Cross-selling is important because it helps you increase your order values and ultimately, your sales revenue. But it also helps you position yourself as a one-stop-shop for all your customers’ needs. Whenever they need anything in a particular category, they’ll think about you and visit your store or website. Basically, it helps you increase brand recall and gain top-of-mind awareness.

It’s also more convenient for your customers. Why should they have to buy the main product from you and then look for another store to buy the complementary products from, just because they don’t know that you sell those as well? You’re basically doing your customers a favor by engaging in cross-selling so that they can find everything that they need in one place instead of having to go store-hopping and waste a few hours (or even days) trying to find the other items that they’d need along with the main one.

What are the benefits of cross-selling to customers?

What are the benefits of cross-selling to customers?

There are several benefits that cross-selling could bring to your business. Here are some of the most common ones. 

Increases your sales and profits

This one is fairly obvious. Your customers come in looking to buy just one item, but you sell them a bunch of other items that they would generally need in order to make the most out of the main product and get more value from it. You’re getting to capitalize on a huge opportunity that you would have otherwise left untapped if you had not engaged in cross-selling. Its the same number of customers, but more items sold, giving you greater profits.

Reduces customer effort

Let’s say that you don’t try to cross-sell your customers. They just buy the main product from you (let’s say that it’s a pair of roller skates in this cade), leave your store, and go to use the product, but then realize that they need to have another product in order to use this product right and make the most out of it (let’s say the customer is a novice skater and needed pads and guards to skate safely without sustaining any major injuries).

Now they’d have to go hunt for another store that sells the complementary item. 

If you engaged in cross-selling right at the start and gave them the opportunity to buy the related item (the pads) the very first time, they wouldn’t need to go back excited to use the product, and then realize that they need to buy something else before they can use. They’re saved the effort of going back and hunting for a new store to buy this item from.

Raises your ROI on your marketing spend

Acquiring new customers is an expensive task. If after you’ve spent the money and done the hard work, you let the customers buy just one product without making the slightest effort to cross-sell a complementary product, you’re not making the most out of your marketing investments. 

Cross-selling allows you to earn a greater ROI on your marketing investment by taking the customers that you acquired and convincing them to spend more on additional products.

Boosts customer loyalty
By helping your customers find the items that they would need in order to get more value out of the main item, you’re showing that you care about them getting more value from their purchases. It also increases customer satisfaction because they don’t have to deal with the frustration of getting ready to use the product and realizing that they need to buy something else if they want to use the main product.

Cross-selling also increases customer loyalty because now your customers know that you carry everything that they need related to that main product, so they don’t have to worry about searching for another store, they can find it all at your store.

Increases your customer lifetime value

When you engage in cross-selling, your customers know that you have everything that they need in that niche, so they’ll keep coming back to do business with you over a long period of time, and they’ll also be buying more products from you, not just the main one. This will have a rather positive impact on your customer lifetime value.

What is the difference between upselling and cross-selling?

Some people use the words ‘upselling’ and ‘cross-selling’ interchangeably, but that isn’t right. They’re rather different concepts. 

Upselling is all about getting your customers to buy a high-end, premium or more expensive version of whatever they were going to buy. 

Cross-selling, however, is about encouraging your customers to buy more items, especially items that are related or complementary to the main one.

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