Cross-selling complementary products to your customers can mean increased sales – but is this the only appeal this technique has for companies? In fact, cross-selling has several benefits beyond simply increased sales that can boost revenues long after the immediate sale, and they all come down to improving customer relationships.
Cross-sales can have a positive impact on your customer relationships in the short and long term if they offer value and build trust. In this post, we’ll outline the extra benefits of cross-selling and offer some cross-selling tips for accessing these benefits, along with some cross-selling examples.
Amazon reported in 2013 that nearly 35% of their sales came from cross-sales. Classic examples of cross-selling on ecommerce platforms include “those who bought this also bought” suggestions that customers receive while shopping or checking out. However, while you may be convincing a customer to click on one more product and consider buying it, you’re also communicating with that customer. These are some of the benefits you can gain beyond the actual sale in question:
1. Higher conversion rates:
Cross-selling offers customers added value when they are considering a purchase—placement of ads is important.
For instance, you may have a potential customer who is contemplating buying a laptop computer on an ecommerce platform. If you offer this customer accessories, such as a laptop bag, a wireless keyboard, and an ergonomic external mouse with the laptop, you may be able to convince them to make the laptop purchase, thus converting them from a potential to an actual customer by influencing the customer decision-making process during the crucial checking-out moment.
Shopify reports on research showing that cross-selling techniques can increase sales by 3% when placed at the checkout stage, as opposed to only on product pages on your ecommerce platform.
2. Greater product awareness:
Cross-selling can also aid your marketing efforts by offering opportunities to promote specific products.
If you are an insurance company who has just introduced life insurance policies, a huge part of your marketing efforts should be cross-selling these policies to customers who have already purchased or are considering purchasing other types of insurance.
In these types of cross-selling cases, sales and marketing unite when companies take an approach centered on the customer journey.
3. Increased Customer Lifetime Value (CLV):
H.O. Maycotte of Forbes Magazine called CLV the “only metric that matters” for businesses. This metric shows businesses the revenue generated from a specific customer over time.
Cross-sales can increase this value by building a sense of trust and reliability: offer customers value in the form of thoughtfully chosen additional products and services, and they are more likely to continue to purchase form you.
4. Customer exposure to products with higher margins or high popularity:
The increased product awareness that comes with cross-selling is not only limited to lesser-known or new products and services. You can also use cross-sales to promote products that generate more revenue, along with those that customers are more likely to purchase.
Although you should always have the customer’s needs in mind when planning cross-sales campaigns, intelligently choosing products that are more likely to be purchased or offer more return on marketing and sales investments makes good sense.
For instance, a customer who routinely shops in your grocery stores might respond well to being offered bottled water at the checkout, which typically has a huge markup rate.
5. Higher overall customer satisfaction:
This should be a given, but a major factor in your cross-selling efforts should be to provide customers with added value and increase their overall satisfaction! Customer service is becoming more proactive as analytics allow companies to anticipate and meet customer needs more quickly and easily.
Sales teams can also use this model to not only predict the lifetime customer value of customers, but also to identify customer needs and try to meet those needs with cross-sales. Someone who regularly buys running shoes and clothing through your ecommerce platform, for instance, might benefit from wireless headphones or warm running gear at the start of winter.
We’ve covered the major benefits of cross-sales beyond increased sales, so let’s move on to how to do this in your day-to-day.
1. Remember customer lifetime value?
Use this metric to strategise about cross-selling campaigns. Cross-selling to receptive customers gives you more return on your sales and marketing investment. Choosing cross-sell products carefully and approaching customers selectively is also more likely to lead to future sales and customers with a higher CLV.
2. Build Trust through Cross-Selling.
Cross-sales can be a great opportunity to nurture customer relationships, so be careful how you go about cross-selling. Operate with the customer’s needs in mind to build trust, rather than simply trying to generate the highest sales volume possible as quickly as possible.
3. Start where you are now.
The information you need to get a complete picture of your customer population, and identify good targets for cross-sales, is probably already in your company’s hands. Start strategising, reframing and organising sales metrics from the data you already have, rather than waiting until you can invest in new data warehouses.
Cross-selling is about more than selling, just like business is about more than making money or keeping your company’s doors open. Successful, healthy companies create mutually beneficial relationships with customers.
Cross-sales allow you to continue your customer relationships beyond an initial sale. These sales are a crucial moment in a customer journey, where the decision is made to either stay with you or move on. Use these opportunities wisely.
If you use data-driven methods supported by a call centre CRM, and keep customer needs and satisfaction in mind, you are more likely to fend off competitors and create loyal customers with higher CLV through cross-selling by creating good customer relationships with a personal touch.