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Cross-selling is a sales technique designed to increase revenue by selling additional products that are related or complementary to your customers preferences or purchases. It is a great way to generate additional revenue by encouraging your customer to add an additional product or service that can enhance their current purchase.

This is different from upselling, which is adding an extra or premium offer to the product they are already buying.

Amazon is a great example of cross-selling. They recommend additional products related to the customers purchase as useful add-ons or show what other people frequently buy together. And as another example, let’s say you have a skin care brand and a customer buys a cleanser, you can offer to add a cloth and moisturizer to combine with their cleansing routine, or for a fashion brand, you can show a “shop the outfit” section.

Cross-selling can strengthen your relationship with your customers and improve their overall buying experience by offering them products or services that can benefit them. But be careful how and when you cross-sell. If you are too aggressive with your marketing and offer products that are not related to their needs or preferences, you can alienate your customers and damage your relationship with them.

Benefits of Cross-Selling

• Builds customer loyalty and improves retention
  It takes time and resources to build a strong relationship with customers. But it is easier to sell to existing customers than to new ones. It also costs less to retain an existing customer than it does to acquire a new one. That is why customer loyalty is very important. It increases your retention rates and lowers your customer acquisition costs, which pays off in the long run. Deliver products that are relevant and that your customers love. Having a loyal customer base can help build your brand awareness and create ambassadors as they recommend your brand to the people they know.

• Improves customer satisfaction
  By providing them with a personalized experience and the right products to meet their needs, you build deeper relationships and increase satisfaction.

• Profitability increases
  Customer satisfaction directly impacts revenue. Satisfied customers are more likely to return and spend more, leading to increased profits. This saves money on marketing and customer acquisition costs.

• Increase customer lifetime value
  Customer lifetime value can increase ROI. Encouraging customers to return and make repeat purchases through cross-selling can increase customer return rates and repeat purchases, ultimately leading to an increase in customer lifetime value.

• Increase order value
  Successful cross-selling increases the customers spending, raising the average order value. Offering a good deal can make the customer feel confident in their decision-making. Offer bundles, tiered pricing, or cross-sell products throughout a customers’ life cycle with the brand. For example, if they buy a moisturizer, follow up in a few months to see if they need to buy it again. Additionally, consider offering subscriptions for products that are fundamental to people’s daily lives. These strategies can increase the value of the order. This is important because there are other costs, such as shipping, that can be expensive.

What steps should I take to start my cross-selling strategy?

1. Identify products that match well and can add value to others

   Explore the possible relationships between your products or services. You can also create bundles. Pick one product and, based on that, add others that work well together. Think the experience you can sell, or what functionality are you adding to customers. A good example is Reese’s Book Club. In their website they sell books packages. Instead of selling only their book of the month, they create a bundle. They add other items that at first glance seem unrelated. For example, adding a mug, tea bags, hand cream, etc, that together create an Experience. They are selling the idea of a relaxing and enjoyable reading moment, enhanced by the added value of these items.

2. Analyze and gather data to create your strategy

   Pay attention to your customers’ needs and preferences. What products or bundles work well? which ones are often added on? Identify the type of customer that responds well to cross-sells. Review previous campaigns to see what was successful. Identify the least performing products or those that are most frequently returned. Note the items that have negative reviews and why. This information will help you get an overview of your best and worst performing products and the best options for cross-selling.

3. Establish your products and target demographics

   Choose products that add value to the buyer and are beneficial. Don’t rely only on sales metrics and revenue goals. If you are not offering something valuable to your customers, you are likely to have fewer sales and lose revenue. If you are only trying to sell for the sake of gaining more money, you will lose their trust. This will deeply damage your business in the long run. Don’t break their trust. Let them know that you care about them and that you are not only there to take their money. Offer them products that are thoughtful, personal, and valuable.

4. It is time to start the marketing process.

   Incorporate them into your online store’s product pages and/or add them to the checkout process. You can also run email campaigns and promote them on your social media platforms. Remember to be clear and provide benefits, such as adding promo codes to incentivize your customers. It is important to try different approaches, analyze your data, and see what works best for you.

Conclusion

To start, keep things simple. Plan and develop strategies thoughtfully. Select only the most valuable products or services. Avoid trying to cross-sell too many products to all customers at once. Successful cross-selling can reduce marketing costs and increase the profitability of acquisition costs.