When you make that initial sale to your customer, you don’t want to stop there. Instead, you want to encourage the customer to keep making alternative or repeat purchases.
To that end, the products or services you offer after the initial sale matter very much. You need an appealing, related product or service that sparks interest in your audience.
In short, you need to cross-sell.
If you’ve never heard of this marketing concept before, then you’re not going to want to miss this article.
In it, we’ll discuss all the elements and best practices of cross-selling, including CRM cross-selling, techniques, examples, and software.
We’ll even explain how it’s different than upselling.
Let’s get started.
Cross-Selling vs. Upselling: What’s the Difference?
Before we dive into upsell vs. cross-sell, we should probably begin with a definition.
This way, there’s no confusion.
When you engage in cross-selling techniques with your customers, here’s what you do.
You take the initial product or service you sold the customer and offer up something that’s within the same vein.
You can even try selling add-ons.
Let’s use the wildly popular gaming console the Nintendo Switch as an example.
It has a ton of peripherals and accessories you can buy that takes your gaming experience to the next level.
However, these don’t come with the console.
Image courtesy of Amazon
Okay, so you just sold the customer a Nintendo Switch with two Joy Cons or controllers.
That’s the standard package. Next, you’d try to sell the customer something related to their purchase.
Sure, you could cross-sell games, but why stop there? Just look at all the other accessories available for the Switch.
You could try cross-selling them controller parts for the Joy Cons, racket or steering wheel accessories, Joy Con chargers, a Switch carrying case, or even extra Joy Cons.
Then they could play with all their friends or family members.
Since the customer already bought the Switch, they’ll probably need these other things eventually. You selling them to the customer now makes it very convenient for them to buy.
Okay, so that’s cross-selling in a nutshell. What about upselling? How can you identify upsell opportunities?
When you upsell, you try to get the customer to upgrade their purchase.
Maybe you double the order value or the customer gets a bigger quantity.
This upgrade comes doesn’t come free, of course.
By those two definitions alone, then, you can tell that cross-selling and upselling are different things.
Both can earn you more sales, though, so they have that much in common.
Image courtesy of Instapage
Here’s the classic example. With cross-selling, after a customer buys a burger from an online fast food restaurant, you offer them fries and a drink.
That’s because fries go with cheeseburgers like peanut butter and jelly. When you upsell, you take their order of fries and offer to upgrade it.
Now, instead of getting a small, they get a large or even an extra-large.
In the case of the Nintendo Switch, instead of just buying the console, with upselling, you’d offer the customer a bundle.
This bundle includes the Switch, but you also get a carrying case and the game Super Mario Odyssey. The Joy Cons come with the bundle, too.
You get more than you would with cross-selling, but you spend more money.
Both cross-selling and upselling can help you grow your small business.
How? Good question! Here are some benefits of cross-selling that might interest you.
Boosting Your Customer Lifetime Value
A Customer Lifetime Value or CLV is a neat little term that defines how much money you can make from your customer throughout their time with you.
Image courtesy of ChartMogul
The above image shows a CLV of $150 per customer for a service-based business.
If you multiply that times 100 or 1,000 people, now the money starts coming in. If you’re a products-based company instead of a service company, then your CLV can increase even higher than $150 each.
There’s no limit to how much the existing customer will buy from you or how many times he will make alternative and repeat purchases.
Better Customer Satisfaction
Everyone wants happy customers, right? Of course.
By offering them related products you know they’ll like, it shows the customer you bothered to do your homework.
You performed your market research, segmented your audience, and studied the demographical information for each segment.
You may have even created buyer personas. No matter how you did it, you know your customer pretty well.
By selling them additional products they want but didn’t even know they wanted, they’ll be happier to do business with you.
Happy customers tend to stick around longer. If you keep hitting it out of the park with your product or service recommendations, then you should drive more customer loyalty to your brand of products.
That keeps the customer buying again and again.
The above points all lead to more sales for your company. It’s a win-win!
Are There Any Cons to Cross-Selling?
Cross-selling, like any marketing technique, isn’t perfect. You can’t blindly apply it and expect to get results.
It won’t work like that. If you didn’t already spend the time segmenting and learning about your customers, then this sales technique will fail you.
Let’s just entertain the idea for a moment of you selling your existing customer any old thing you have in stock.
They bought the Nintendo Switch and you recommend them an iPhone. This doesn’t make much sense.
The only thing the Switch and the iPhone have in common is they’re both tech. That’s it.
Considering your customer just spent several hundred dollars on a Switch, do you really think they’ll want to shell out close to a thousand more on an iPhone? Probably not.
Your recommendation rubs them the wrong way.
Not only do you lose a sale, then, but you could lose the existing customer in the process.
You also have to figure out how to handle potentially sensitive issues with aplomb.
For example, let’s say you sell a range of fitness equipment. Your customer buys a yoga mat. You then decide to cross-sell them with a book on how to lose weight.
This can backfire in several ways, especially if you don’t know a lot about the customer you’re selling to.
They could already be in phenomenal shape and not need to lose weight. In that case, you’d probably confuse or anger them with your offer.
Some people could feel offended by an offer of that nature. You could lose them, too.
That’s why, no matter what, you always have to know your audience inside and out.
Not only do you have to determine if the customer has a need for a product or service, but also if they already own the product or service.
Otherwise, you’ll run into the pitfalls we mentioned above.
Examples of Cross-Selling
While we already shared a great example of this type of sales technique with the Nintendo Switch, that’s just one of many.
Here are some more examples you can recreate for your small business.
Image courtesy of Comm100
We’ll begin with a pretty simple but effective example. If the customer buys a Nikon camera, RitzCamera.com will cross-sell them with a camera filter or tripod.
As you can see, Ritz Camera offers the accessory before the customer ever buys the camera.
This can be both good and bad. For example, that’s not a cheap tripod. It costs more than $200.
The customer could have thought, “okay, I’m already spending $500 off my credit card on a camera. I can’t afford the tripod.” This is a fail.
You need to carefully choose when to present your offer, as we’ll soon talk about.
Image courtesy of Baymard Institute
Here’s a more traditional example of cross-selling. The customer already made their purchase on the product page.
Now, in their confirmation email, Newegg wants to sell the customer some other popular products.
While these aren’t inexpensive by any means, they’re related to the cord the customer just ordered.
Thus, the customer might decide to buy them. Maybe not right away, but at some point down the line.
Image courtesy of ePages
It’s so easy to cross-sell with clothing. Have you ever browsed around on a clothing site, wondered where the model got their pants or shirt or shoes, but then haven’t found those clothing items?
This store does things differently.
Yes, the shopper’s looking at a shirt, but what if they like the whole outfit?
The cross-sell offers them links to buy the pants and a necklace. How handy!
Image courtesy of OptiMonk
Our last example also comes from an industry that can make a lot of money using this type of selling technique: flower sellers.
Think about it. You just bought some flowers, but where will your recipient keep them? Do they already own a vase? Maybe, but you’re not sure.
That’s part of why we like this cross-sell so much. It’s brilliant in its own way.
By offering several vases at low price points, the customer will probably buy one. It will add to the presentation of the flowers, after all.
Also, if you look at the above image, you’ll notice there’s an upsell at play here, too. The customer can pay to get twice the roses.
That’s a great upsell example if we’ve ever seen one.
Steps for Cross-Selling to Customers Using CRM Software
Now that you’ve learned so much about it, you think you’re ready to implement this sales method for your small business. How do you begin?
Use CRM Software if You’re Not Already Doing So
To cross-sell with CRM software, you kind of need CRM software.
We’ve written a lot about CRM on this blog, so check out those posts to familiarize yourself.
While countless companies exist that offer CRM services, many do so at a premium fee.
Here at EngageBay, we price our services for startups and small businesses like yours.
Take, for instance, our CRM software. If you’re already using our services, we offer our CRM for free.
You can manage your sales pipeline, impending deals, and email contacts.
Also, with EngageBay’s CRM software, you’ll find it so much easier to schedule appointments, manage tasks, visualize your pipeline, and do more targeted email marketing.
Once you’ve settled on your software, it’s time to use it.
Identify and Segment Your Audience
With your CRM software booted up, you turn to your contacts list. Now you have to segment your audience so they’ll be more receptive to your cross-selling offers.
You might use best practices methods like segmentation by demographics, like age, gender, income, job title, or location.
You could also do lead scoring.
With this, you assign leads (or customers, it works the same way) points depending on what they do.
You can even create buyer personas and organize your customers like that. Some personas might give more pushback on cross-sells.
Knowing who they are lets you come up with alternate tactics to make the sale.
CRM software can make all these means of segmentation much easier. Make sure you use it!
Track Your Customers’ Orders
Okay, now that you’ve segmented your audience, it’s time to track the orders that come in. It’s all about timing with cross-selling, much like with many other marketing techniques.
If you wait too long to make a follow-up cross-sell offer, the customer probably won’t take advantage of it.
They might not even remember what they bought from you in the first place.
You also don’t want to jump too soon, especially if the customer just bought something expensive. They may not want to spend so much money again right away.
Make the Offer
Strike when the iron’s hot and make your offer to your customer. Get your timing down so the customer has higher receptivity to your offer.
Also, make sure you’re only trying to sell them something related to what they just bought.
If all goes well, the customer should take advantage of your offer. Sometimes they don’t and it has nothing to do with you.
The customer might not have the money to spend right now, so they’ll buy the product later.
Rinse, Wash, and Repeat
With your cross-sale offer made and over with, the customer either took the bait or they didn’t. If they did, then congrats! If not, then better luck next time.
For now, it’s back to the drawing board for you. It’s time to repeat these steps again and keep achieving great results for your small business.
Make sure you track your successes with analytics and A/B testing.
Cross-Selling and Upselling Techniques to Follow
Need more advice for successful cross-selling and even upselling? Here’s a handful of techniques to try.
If your cross-selling efforts didn’t go as intended, don’t give up all hope yet. You can always employ retargeting methods, such as advertising online or across social media.
Perhaps if the customer gets a second look at your offer, they’ll decide to buy.
Create an Incentive Program
An incentive program encourages even the most reluctant customers to try your product or service.
If you’ve identified said customers via buyer personas, then you might want to have an incentive program in place anyway.
Market Through Email
As long as people use their email address, then email marketing probably won’t ever fall out of fashion.
Reaching out to your customers via email, nurturing the relationship a bit, and then following up with a cross-sell or upsell could do the trick.
Before, we mentioned that customers might turn down your cross-sell or upsell because they just bought a product from you for a lot of money.
They may feel financially drained and don’t want to buy again. If that’s the case, then your company offering the customer a discount could finally encourage them to buy.
Make sure you’re not losing too much money in the deal.
Show What Other People Bought
The herd mentality, sometimes also called pack mentality or mob mentality is a very real phenomenon.
People will do what other people have done just because so many people do it.
If you have a pop-up or section on your store product page that says other people have recently bought a product, then guess what?
There’s a greater chance your customer will follow suit.
Create a Sense of Scarcity
If your customer doesn’t really buy into whole herd mentality thing, that’s okay. You can always play upon their fear of missing out or FOMO.
By telling the customer how much more quantity of a given product you have, it drives them to act faster.
They recognize that you don’t have an endless supply of the product.
It’s scarce, which to them, makes it seem more valuable.
Also, it’s disappearing fast. That encourages them to act right away.
Cross-selling is a sales technique where you offer a related product for the product the customer just bought. For example, if a customer buys a burger, you’d cross-sell them fries and a drink.
It’s different from upselling. With this, you try to get the customer to buy something bigger or better. If the customer buys small fries, you’d try to get them to upgrade to a larger order value.
Both cross-selling and upselling have their place. Using CRM software can aide you in identifying and segmenting your audience and successfully deploy your campaign.
You can then decide which additional products to cross-sell/upsell as well as when. This is also great for customer retention.