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What is Cross-Selling?

4 min to read

Cross-selling is a technique that involves suggesting additional products and services to customers already about to buy something. The items you cross-sell need to be relevant to the initial purchase. The objective is to increase revenue.

Here’s how you can use cross-selling:

• Product Bundling: Group complementary products for a discount (e.g. a camera with a sensor cleaner, memory card, case, and spare battery).

• Personalized Recommendations: Suggest items that a customer might be interested in. You see this on eCommerce sites with messages like “customers who bought this also bought…”. Use data to determine what to offer.

• Strategic Placement: Display related products close to each other. For example, you can place phone cases next to phones.

• Staff Training: Train team members on identifying cross-selling opportunities and making suggestions to customers.

Pro Tip:
You should also implement upselling in your strategy. This is when you encourage customers to buy a more expensive option of the product they’re interested in. Combine both to increase order value and use situational awareness to know when you should use one over the other instead.
Key Takeaways:
  • Cross-selling is the act of encouraging customers to purchase complementary products and spend more money
  • Cross-selling requires personalized recommendations, staff training, and (ideally) bundling products
  • You should use data to alter your strategy and drive decisions
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What is Cross-Selling?

Why cross-selling is important?

The main objective of cross-selling is to maximize sales and revenue. It can also impact customer relationships if done properly. People might become repeat customers if your cross-selling actually helps them, so think about their needs first.

Pro Tip:
Track your cross-selling strategy to determine what works and what does not. Adjust as needed, and consider using different tactics with different types of customers. 

What is an example of cross-selling?

One example of cross-selling that you’ve probably encountered is when a customer goes to a fast-food restaurant and buys a burger. The cashier will then ask: “Would you like fries and a drink with that?”. The drink and fries are related to the burger, hence the cross-sell.

Pro Tip:
Focus on items that genuinely complement the original purchase. The additional value should be the objective.

How to use cross-selling in your business?

Consider using these strategies when thinking of how to cross-sell: 

  • Product Bundling: Package-related products; make sure that the cost is discounted from how much they are individually. 

  • Personalized Recommendations: Suggest complementary items for a current purchase. Base these on data (e.g. what similar customers have bought in the past).

  • Strategic Placement: Place related items close to one another on your store or website for visibility and to drive impulse buys.

  • Staff Training: Teach staff about how to smoothly suggest products to clients.
Pro Tip:
Consider the role of timing. You should give cross-selling suggestions after they have already committed to the original purchase but before they’ve completed the transaction (i.e. when they’re at the cash register). 

How to improve cross-selling?

Focus on these strategies:

  • Data Analysis: Look at your data and analyze customer patterns. Identify trends that may influence their purchasing decisions. 

  • Targeted Offers: Think about which offers would appeal to each customer.

  • Clear Communication: Simplify your cross-selling messages to be concise and understandable. 

  • Incentives: Use discounts and promotions for multiple purchases (e.g. buy two items and get the third free); charge for the most expensive items.
Pro Tip:
Use A/B testing to try different strategies and figure out where you should focus your efforts. 

What is the difference between upselling and cross-selling?

Whereas cross-selling is about selling complementary items that enhance the initial purchase, you suggest more expensive or upgraded options when you upsell. 

Pro Tip:
Try to use upselling and cross-selling together. Be careful not to overwhelm the customer with too many options, though; striking a balance will maximize value.

What combination of upselling and cross-selling most often results in higher average order value?

Ideally, you should strategically combine cross-selling and upselling. You can start by upselling to a pricier item (e.g. offering a MacBook Pro instead of a MacBook Air) and then suggest complementary items (e.g. a case for the computer). 

This approach maximizes revenue because a customer pays for the more expensive option. However, it’s also important for value on the customer’s end. Firstly, upselling will establish a higher base price and make subsequent cross-sells seem more affordable, even if they’re technically spending more. The customer will likely be open to pricier options, too, because they were going to spend money on your products anyway. 

For example, a customer might be looking to buy a TV. The salesperson first suggests a model with enhanced image quality and surround sound (upsell). After agreeing, the salesperson may suggest a streaming service subscription and extended warranty (cross-selling). 

Pro Tip:
Offer limited-time discounts or bonuses to create urgency and prompt action; you should experiment with different times.

Conclusion 

Cross-selling is something that you must consider in your strategy. You’ll need to understand your customers’ needs and offer personalized suggestions. You can strengthen customer relationships if you do it right, so you should spend significant time planning and training your team.

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