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What Is Cross-Selling & What Are the Advantages?

What Is Cross-Selling & What Are the Advantages?

Cross-selling is a tried and true method of increasing sales and revenue. Some of the most successful companies in the world, like Apple, for example, use cross-selling techniques to increase profits and further lock in their customers into their architecture.

An effective cross-selling strategy emphasizes the need to purchase additional products to support or accent the core product purchased. Cross-selling differs from upselling, however, where customers are encouraged to purchase more products or premium products. It, instead, focuses on the purchase of other products that complement each other.

What Are Some Examples of Cross-Selling?

Cross-selling may sound difficult to do at first, but in reality, it is very simple. Don’t make the mistake of believing shoppers are not interested in spending more money with your business or that they will be turned off by having to purchase additional products to support the core product purchased.

Introduction of Complementary Products

For example, anytime a customer buys a pillow, they may also need to purchase new pillowcases to fit the new pillow. The pillowcases they have at home may be old and outdated or may be under or oversized for the new pillow.

Perhaps the shopper would see a section on the bottom of a pillow product page that features a new pillowcase under a “Frequently Bought Together” section. These sections are aimed at improving the functionality of the core product. Purchasing new pillowcases from this retailer would be a cross-sell related to the core product purchased.

Anytime a consumer purchases a new smartphone, they also usually need to purchase new accessories to complement the new phone. This is why anytime you have ordered a new phone from your favorite manufacturer or cellular service provider, the next page on their online store lists numerous supplementary accessories. This could include car chargers, screen protectors, phone cases, charging cables, or a warranty for purchase.

At least some, if not all, of these accessories are needed to fully complement the new phone purchase and are all examples of cross-selling opportunities. The need to purchase these new accessories becomes even more necessary when you make a jump from one manufacturer to another, such as leaving Samsung for an Apple iPhone.

These phones use different chargers, are shaped differently, and utilize different charging technologies. Accessories aren’t an option in this scenario; they’re a necessity. This is a classic example of why cross-selling is not just some cheap trick to try and influence your customers into spending more money but is instead an excellent way for them to receive a complete, packaged product.

Examples of Relevant Products: Steaming 

Cross-selling is not only limited to actual physical products and can also be used when selling services. For instance, subscribing to YouTube TV comes with options to add 4K programming, premium networks such as HBO and Starz, and unlimited device streaming. All of these add-on options are essentially cross-sell services.

Cross-Selling Insurance

Another example would be purchasing insurance. Most insurance companies will give you a bundle discount for purchasing more than one insurance product. For instance, you may have gone to a particular company for their homeowner insurance but also purchased auto insurance to get a better rate on both.

The insurance company is essentially cross-selling other services to further engrain you into its ecosystem. A byproduct of this ingraining is increased reluctance to switch to a different company.

What Are the Advantages of Cross-Selling?

The advantages of cross-selling are numerous and range from increased revenues and profits to higher customer satisfaction.

Let’s take a look at some of the best advantages of cross-selling efforts.

Increased Revenues

The way of life of your employees and the long-term success of your company hinge on your ability to find new prospects and convert them into customers, retain existing customers, and continually evolve and innovate your product or service to remain competitive.

As a sales tactic, cross-selling increases revenues by increasing the number of products sold and delivered to customers. Increased revenues are necessary for long-term growth and success. Remaining stagnant may not be a decline, but it isn’t growth. Growth should be a constant factor in your business success strategy.

Increased Profits

A byproduct of increased revenues is increased profits. You’re not in business just to break even; you’re in business to make a profit. Profits give you the resources needed to expand and innovate your products and services, which is a clear path toward long-term success.

Increased Customer Satisfaction

Cross-selling increases customer satisfaction with your core products. For instance, selling high-end sheets and comforter sets alongside high-end mattresses is a great way to give your customers a total packaged product that meets or exceeds all of their needs.

The more tools or accessories you can give your customer base that enhances their experience with your products, the better. Milwaukee Tools has made this a cornerstone of its product lineup. In fact, their core product is not actually their tools but the batteries that power their tools. When you buy a certain size battery, numerous tools can be purchased that one single battery will work on.

The more uses and longer life customers can get out of your new products, the better off your company is. Increasing customer satisfaction directly impacts your Net Promoter Scores (NPS), customer retention, and growth as a company. Your sales team should prioritize the customer relationship, which will contribute to an increased Customer Lifetime Value (CLV).

Increased Customer Retention

The more ingrained in your company’s ecosystem a customer becomes, the less likely they are to leave or switch to another competitor. We mentioned the insurance example above. Another service industry example that exemplifies this practice is banking.

Most banks and insurance companies have begun to cross-sell products that are not traditional markers of their industry. For instance, insurance companies now sell many banking products, and many banks now sell insurance products.

The strategy being employed here is ecosystem ingraining. In other words, the banks and insurance companies know that the more products and services you purchase from them, the less likely you are to leave because doing so would be no simple feat.

For starters, you’d have to refinance any loans the bank currently holds on your properties. Then you’d have to change all of your automatic drafts that come out of that account to pay for other services. After that, you’d have to find a new insurance company to write all of your new policies, provide details for the insured items, and on and on and on.

In other words, leaving would be a hassle and very often influences consumers to stay put to avoid all the work. Cross-selling is a powerful marketing tool and business strategy to increase customer retention and brand loyalty.

Cross-Selling and Upselling Combined

Combining the sales practices of cross-selling and upselling results in guaranteed revenue growth and profits. Offering your customers more options that further tailor your products or services to their specific needs enhances the customer experience throughout the entire customer journey with your company and represents an effective cross-selling strategy.

For instance, when Microsoft lists its Microsoft Surface devices for sale on its eCommerce site, customers have the option to choose from a variety of different builds that meet their standards and needs. The beauty of this is you don’t have to pay for what you don’t need, and if you need it, you’ve got the option to get it.

Secondly, once you’ve chosen the product best aligned with your needs, Microsoft offers you several different accessories designed to complement the Surface product you purchase and meet your unique needs. For instance, if you need a keyboard folio because you do a lot of word processing, one is available. If you need a pen that works with the screen because you’re a graphic artist or designer, one is available.

These two business practices constitute both upselling and cross-selling, all done seamlessly at the same time. An effective cross-selling strategy leverages the benefits of both. Both your existing customers and new customers will appreciate the attention you give to ensuring they enjoy your products and services to their fullest potential.

Bringing It All Together

Whether you own or operate a fast-food restaurant, a major tech company, or a small insurance brokerage, a well-executed cross-selling strategy will increase revenues, increase customer loyalty, increase your average order value, and enhance the customer journey and experience.

Automating your cross-selling strategy online on your eCommerce site during the customer’s initial purchase can significantly increase your average order value. This sales technique will present related items based on the contents of the customer’s shopping cart at checkout.

Don’t fall into the trap of thinking your customers will disapprove of you presenting them with complementary items for purchase to complement the core product they are buying. On the contrary, they will appreciate the attention to detail and your commitment to providing them with a robust catalog of related products meant to help enhance their experience with your products and services.


How To Calculate (And Improve) Lifetime Value | Forbes

What Is a Cross-Sell and Does It Work? Definition and Example | Investopedia

5 Ways to Increase Your Cross-Selling | Harvard Business Review