How to increase sales with cross-selling?

8 min read
Selling More - Through Cross-Selling

Creating a good offer and finding customers isn’t enough. If you want sales to grow and generate more profits, you will need an appropriate strategy and thoughtful techniques. One of them is cross-selling, which is a way to simultaneously maximize profits from one transaction and increase customer dependence and trust in the company. And even - reducing the risk of its transition to competition. How? Let us explain.

What’s cross-selling all about? 

When done well, it can dramatically improve sales, achieve higher profits and increase lifetime customer value.  

So what is cross selling? You see it all the time. When you hear “Do you want fries with that?”, that’s cross-selling. When you get an offer to buy related items in a set, that’s cross-selling. When you see suggestions in an online store based on the fact that those items are “frequently bought together”? More cross-selling.  

However, what is then offered to you is not just a random product that the company wants to sell, but something complementary to what you have just added to the basket.

Let's look at a specific example. You’re browsing coffee machines in an online store and suddenly there are banners at the bottom informing you about the care products associated with them. This is cross-selling, which is a reminder of items that may be useful to you or that you have forgotten, and are necessary for the longest possible use of the product you have chosen. 

Cross-selling in the form of an email marketing campaign

How cross-selling increases the effectiveness of offers and average transaction amount 

Ok, but how does cross-selling really let you increase profits? After all, cross-selling techniques are used for customers who have already entered your store, whether offline or online, so it doesn’t bring in new ones. But this is where the value of cross-selling lies—because it's easier to get someone who is already in your store and ready to buy than from someone who’s never been to your store.  

It is also easier to offer something complementary to a customer you already know, based on an analysis of his previous purchases that tells you what he chooses most often, as well as what he likes. By informing him about complementary products, you increase the likelihood that he will spend more and reduce the likelihood that he will buy them later elsewhere.  

Thanks to adapting your offer to the target group, this kind of marketing activity is much more effective than any other. Customers that shop with you are telling you that they trust you. If you give them something related to their demonstrated tastes, you have a better chance of making a sale than pitching that same product to a stranger.  

Remember, however, that profit increases when the effort and costs are optimized for sales. If you examine the preferences and choices of your customers, you create practically no additional costs and the profits are tangible if the customer decides to make a larger purchase. The cost of shipping products also does not change, because everything is done during one transaction. 

What about cross-selling in the form of an email marketing campaign after finalizing your previous shopping experience? This takes place after the purchase, so it can generate additional shipping costs, so you need a good strategy and logistics. In emails, choose products that are complementary and tailored to the client's needs and at a price point that ensures the transaction will be the most profitable for you and the client. 

Graphic presenting the fragment from Marketing Metrics survey results

How does cross-selling increase the value and loyalty of customers? 

Increasingly aggressive and intrusive sales techniques mean that customers are becoming more resistant to marketing information. The widespread use of ad blockers speaks for itself. So how does cross-selling increase customer value and loyalty? It's easy, as long as it’s done well. 

First of all, product and service suggestions must be tailored to the client's preferences as well as his portfolio. You need to be moderate here. For example, if a customer bought a TV set for a certain amount, then the additional elements offered should cost from 10 to 50% of the cost of the main product. In the offline space, at the checkout, it is better to tempt the customer with much cheaper products—look at what is always set up in supermarkets (small bars, chewing gums, etc.). 

Cross-selling means addressing client needs so they don’t feel manipulated or used. On the contrary, they recognize the care and attention dedicated to their needs, if you offer goods that improve the comfort or quality of use of the main product. Increasing the value of the customer's basket also deepens the relationship with him and the likelihood that he will come back. This is how transforming one-time customers into regular ones impacts the bottom line. 

It’s also worth starting an additional cross-selling strategy, i.e. loyalty programs. A consumer who gets something extra that responds to his needs is a profitable customer. 

Cross-selling – the numbers tell the story

Ok, enough theory. Let’s move on to some numbers that tell the real story of the value of cross-sellin

Graphic presenting the fragment from Small Business Trends survey results

What does this mean? That by using algorithms that test customer preferences and investing in meeting the needs of those who are already buying from you, you dramatically increase the chances of making more sales compared to focusing on advertising products to new customers. 

Graphic presenting the fragment from Accenture survey results

What does this mean? That cross-selling is a marketing sales technique that is already optimized in terms of costs and revenues. It will generate profit without incurring huge financial costs. It will also not cause losses if the customer simply decides not to buy complementary products/services.

Majority left the brand because the lack of personalization

What does this mean? That cross-selling is a way of almost guaranteed increases in profit during an open customer portfolio. By showing them not an alternative, but the possibilities and ways to enjoy their main purchase longer, you encourage them to invest in themselves, not in the product, thus increasing brand loyalty.  

Majority left the brand because the lack of personalization

What does this mean? That by offering customers additional products that meet their tastes and needs, you show that you not only know them well, but also take care of them and want to give them something more (hence the premium offers, loyalty programs, marketing emails after sales). 

The numbers and statistics speak for themselves. Cross-selling campaigns can help you not only to boost sales results, but also to learn about customer habits, establish a deeper relationship with them, and thus be in a better position when estimating future profits and matching an effective sales strategy to them. 

Who does it well? 

Let’s take a look at some examples of the effective use of cross-selling. The simplest form of cross-selling is displaying shopping recommendations under the preview of the contents of the customer cart or during the last stages of a purchase, e.g. "Others also bought ...", "See also ...".  

Allegro does this mainly with the help of a carousel of related products (thumbnails of other recommended products). H&M also does this in its application when there is a shortage of goods—it offers other similar products in the carousel so as not to lose the customer. 

The latest types of recommendations are those based on artificial intelligence algorithms, taking into account the behavior and preferences of users; algorithms are also able to offer visually similar products. 

Fashion companies also use another form of reaching the customer through messages related to cross-selling in the form of web push notifications. For a good example of how they work, look at Zalando. When buying a dress and about to finalize the transaction, you receive a notification with an attractive discount offer for a matching purse. This way, individual product recommendations and discount codes are personalized. Asos shows that recommendations alone are not everything: the customer gets a fully visualized perfect set on the card of one product at the beginning.  

Jeff Bezos has revealed that 35% of sales on Amazon comes from cross-selling, an outstanding result that is only possible using the best design and technologies. For example, after sales, inventory is automatically updated and if an item is sold out, the sets that contain it are no longer visible. Instead, others are created with a different complementary product.  

Pop-ups offering an extended warranty, premium version or additional product appear on the page. Amazon also came up with the idea of ​​how to make cross-selling less intrusive by using not only the "Customers who bought this product, also bought ..." function, but also so-called wish lists based on previous customer choices and the choices of others viewing (not necessarily buyers!) the same product. 

Best Buy, on the other hand, allows those who refused or ignored offers in pop-ups to buy it later by sending an offer by email. This includes quantity discounts (e.g. two for the price of one), as well as making clients aware of the possibility of buying a given product in the extended version, e.g. buying a laptop, you get a proposal to replace the graphics card with a better one or expand RAM memory. 

Final thoughts on cross-selling 

Cross-selling is a must in today’s ecommerce world. It offers complementary products or services to current customers, and thus increases the company's income without reducing it by the costs of seeking new customers. There’s no risk involved, either—in the worst case scenario, the customer will simply buy only the basic product. 

Remember, however, that cross-selling done poorly may encourage customers to abandon their carts entirely. Doing cross-selling right means: 

  • know your customers (before you implement cross-selling, do good research)
  • keep it simple (all things in moderation)
  • emphasize the language of benefits
  • choose the right products (you can also design a customer journey)
  • select products to meet individual customer problems
  • use visualization
  • demonstrate value

Why is cross-selling worth the effort? 

  • increase your sales revenue
  • make your customer happy (by satisfying his needs and increasing the user's comfort)
  • build trust in the brand (through a successful transaction and proposals of solutions tailored to the client's needs, he will feel appreciated and well cared for)
Author of our blog post - Harbingers