Many businesses are under the impression that sales only means going out there and finding brand new buyers. Not always! Attracting new clients is not only difficult, but it can also be pretty costly. In fact, a study by Forrester states that acquiring new customers is 5 times costlier than retaining existing customers (Source). Therefore, the wise thing to do would be to try to get more business from your current clientele.
This can play out in a number of ways, but one of the more common methods is to employ cross-selling strategies.
What is cross-selling?
Cross-selling is simply recommending products or services to your existing customer that will complement or expand the products or services they already have.
Look at the travel industry for instance. The travel company may sell you a ticket on a flight to your desired vacation destination – that’s the original sale. The cross-sell occurs when they sell you a vehicle rental for when you land, a room in a hotel to stay in, and a guided tour of a nearby city.
None of these things are required for the first sale – the plane ticket – nor do they improve the service provided with the flight. You could quite happily take the flight, then find your own vehicle to hire, find a hotel room, and so on.
In this case, the cross-sell is all about convenience.
How is cross-selling different from upselling?
Cross-selling strategies are based on the principle of improving the outcome for the customer. This may be an increase in convenience as above, an increase in safety, and so on. Cross-selling does not improve the original offer but instead adds to it.
The most common variation you may have heard is when you visit a fast-food restaurant and order a burger. You will no doubt be asked, “Do you want fries with that?”, and will quite often be offered a drink as well. You can have a burger without fries or a drink, and it’s still a burger. But with both fries and a drink, it becomes a meal and a more enjoyable experience.
To differentiate this from an upsell, in the same context the upsell would be, “Do you want to go LARGE on your fries?” – selling more of the same thing, rather than a complimentary item.
Some cross-selling strategies you can adopt
As a purchasing client yourself, there surely must be some or the other cross-selling technique that was applied. Well, I have come across many. And let me make a confession, I always fall for them, gullible as I am. Anyway, there are some cross-selling tactics that companies have thrown my way. And, I shall use the most impressive ones as examples of strategies you can adopt.
Based on past purchases
This is probably one of the most common and easiest ways to send purchase recommendations to your customers. Take note of how their purchase history has been, what their interests are, or even where they spend the most money. Using this information, you can send product recommendations.
Amazon does an amazing job of this. They send emails, app notifications and even in-app product listings similar to what you have purchased before.
Discount to buy more
Ah, the trick that I, and many more, fall prey to. When you see those posters or ads that say buy 3 for Rs.1499, you convince yourself, you need 3 shirts when all you needed was one. This one has high success rates where people tend to buy more products than they wanted to.
Another way this is done is through shipping charges. A recent purchase with Myntra successfully managed to cross-sell to me. I bought a pair of jeans, but the cart amount wasn’t sufficient for free shipping. So, they asked me to buy more stuff to meet the shipping. People actually have a tendency to pay more money to avoid shipping. And end up buying more.
There is this very clever line that many businesses use: “Other users also bought…”. This creates a very natural human curiosity as to what other people are buying and you may very well end up buying some more. This is a clever strategy to cross-sell products to your visitors.
Take a look at how Myntra does this. When I purchase a dress from there, they show me bags and shoes that other people have liked. I may not be tempted to buy another dress, but I may be interested in buying a bag that goes with it.
Now, this is again a very prevalent form of cross-selling. It uses the logic, “Hey, you bought this, why don’t you buy this too? It goes with what you bought, already.” This is a very subtle and probably super-effective way of getting your customers to buy more from you.
Again, Amazon does a wonderful job and sends me emailers based on what I have recently bought.
Another example of this strategy is RedBus. There are two ways that they cross-sell. When you book a bus, they ask you to insure your journey. Most people automatically click on this option. So, there, they’ve sold insurance along with their service.
Also, once you book tickets, RedBus sends you a selection of hotels at your destination to choose from. Since, in all likelihood, you would need accommodation in the place you are visiting, you would look at their options. See what they did there? Fool-proof cross-selling!
Complete the package
This is another clever strategy to sell more to your existing clientele. If someone buys just one part of a package, you can try and convince them or incentivize them to buy the whole package together. This actually works pretty well.
Like Shein, one of my favorite online shopping sites gives me options to buy stuff that compliments or ‘completes’ my purchase. More oft than not, I add at least a couple of these items to my cart.
Imagine being loyal to a brand and being rewarded for said loyalty? That’s what this strategy is all about. Not only does this gratify the customer and retains him, but it might also urge him to buy more from you.
A very common way to do this is through adding points or e-cash into their ‘wallets’. A lot of businesses follow this pattern, the most popular of which is provided by airlines, where you can accumulate flyer ‘miles’ that you can use later to earn free flights. This encourages your customer to keep flying with your airline to earn that free flight!
Even better, by putting an expiry date on these loyalty points, you can urge your customer to make purchases quicker. Like the way, Bewakoof is doing in the example below.
When you purchase products that require constant maintenance like electronics or vehicles, you can sell them a discount on their yearly check. This will allow the customer to come back to you if something goes wrong instead of trying to get it fixed for cheap.
Will cross-selling strategies work in my industry?
As long as your industry has more than one product to offer, there’s no reason why cross-selling strategies won’t work for your industry.
In the finance industry, if you provide loans or mortgages, make sure to offer the inclusion of life or buildings insurance – or both!
In the healthcare industry, why not offer a physical exam as an add-on to other services? Take it further and you can cross-sell spa days and massages too.
With a little creativity, you should be able to easily identify potential cross-selling opportunities.
What are the benefits to the customer when cross-selling?
The benefits for the customer are partially the provision of these extra services (which give benefits in and of themselves) as well as being able to obtain products and services from their trusted and preferred supplier – that’s you.
They will be happy that you can provide a complete solution for them, and whether they take the option of the cross-sold package every time is not as important as knowing it exists. Their trust in you will increase leading them to become happier customers overall.
What are the business benefits of cross-selling?
The increase in trust is a clear benefit, but the major reason for cross-selling is to increase your bottom line. Once a customer has decided to purchase from you, getting them to buy extras or purchase for a second time is much easier than finding a new customer.
Given the opportunity to purchase a related item or service, a customer is much more likely to say yes than when purchasing their first item. This simply means that the more a customer buys from you, the more likely they are to want to buy more from you now and in the future.
This brings a greater number of sales, and therefore a greater profit, all without the monetary and time costs associated with attracting new customers.
The Art of Cross-Selling
While it is true that an existing customer is more likely to be open to being cross-sold another product, it must always be done in the appropriate manner. A salesperson telling the customer that because they bought Product A, they NEED Product B and Service C will most likely put the customer off.
They’ll feel they are being forced into a purchase and are being told what to buy. The key is in the presentation – because you bought Product A, you’ll find it works well with Product B. Many of our customers like using both products with Service C, because Service C helps you to relax, knowing that everything will be OK.
Returning to our fast food example, you know that Products A and B go well together – burger and fries – but you hadn’t considered Service C. As it turns out, Service C is table service, and it’s free – so how is that going to help the business?
Clearly, the customer is looked after, so in the long term it brings more sales – the customer will come back because table service is free! For the business, it clears out the area where people order and wait to be handed their food. More people can get in and place their orders, making wait-times shorter and offering the possibility of getting more people in through the door.
Finding the Hidden Gems
As you can see, not everyone may have been aware that table service existed. Is there a product or a service like that in your business? Very few customers are aware of it but selling it would either improve your figures or build a better relationship with the customer.
If so, this is an ideal product or service to cross-sell whenever you can. Take the opportunity whenever it arises, and you may be very surprised by how many customers take you up on it.
If you are looking for a tool that can help you implement your cross selling strategies, then look no further. LeadSquared comes with detailed customer tracking and smart notifications. Give it a quick try, why don’t you?