What Is Cross-Selling? (How It Works, Tips And 8 Examples)

By Indeed Editorial Team

Published 16 October 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Cross-selling involves selling complimentary products or services to customers based on their interests or purchase plans. It is an effective form of marketing, as it allows businesses to grow their revenue without requiring new customers. Offering a product or service that supplements a customer's initial purchase can be an excellent way to generate additional revenue. In this article, we define this type of selling, explore how it works, discuss its benefits, share steps for effective selling, provide useful tips and list eight examples.

What Is Cross-Selling?

Cross-selling is when you sell a product that is complementary to what the customer is already purchasing. For instance, if a customer is buying a pair of shoes, a salesperson may attempt to cross-sell them complimentary socks. This type of selling is beneficial for businesses, as it enables them to generate more revenue from a single customer. When a company makes cross-sales, it generates more revenue from customers who already want to make a purchase.

How Does This Type Of Selling Work?

A business often cross-sells by suggesting complementary products or services to the one the customer is already considering. The process may vary according to the shopping experience.

In-store

Brick-and-mortar stores typically cross-sell by displaying products or services that complement the customer's intended purchase. A sales associate may describe to the customer how the additional products or services may improve their purchase. For example, a home decor store may display flower vases on its tables or a sales representative may show matching chairs and table clothes to the customer.

Related: What Does A Retail Salesperson Do? (Duties And Career Path)

Online

Cross-selling in online stores involves determining which products and services complement a specific purchase and creating attractive offers. When a customer is checking out, a website may suggest additional products that may pair well with the item the user has in their shopping cart. Many online stores use various algorithms to create cross-sell options for most products and services. The automated algorithm shows personalised selling offers to users based on parameters such as age, gender, location and purchase history.

Related: How Much Does A Sales Manager Make? (Salaries And Benefits)

Benefits Of Cross-Selling

The following are some key benefits you may see when you cross-sell:

Boosts revenue and profit

This type of selling is an effective strategy for increasing revenue. Encouraging customers to add more items to their carts can increase their order value. Additional product purchases also reduce overhead costs, such as marketing and shipping costs, which ultimately increase the net profit.

Related: 15 Types Of Operations Metrics And Their Use In Business

Develops customer loyalty

Providing customers with matching products can increase customer satisfaction. This is an efficient way to win customers' trust and loyalty, which may result in more revenue per customer. It can also increase the customer base per product by turning one-time customers into repeat customers.

Related: How To Manage Customer Relationships: A Complete Guide

Maximises efficiency

Cross-sell strategies can increase the average number of items per transaction. You can sell more products with cross-sell tactics without investing more in attracting new customers. It can help you increase revenue without spending more on marketing or advertising.

Introduces products

When buying a product, a customer might not be aware of an associated item. You can introduce the customers to the accessories in the catalogue by suggesting related products. This may help them make additional purchases. This type of selling is effective when launching new products that enhance current ones.

Related: New Product Development Process: Steps, Benefits And Tips

How To Cross-Sell Effectively

Consider the following steps to maximise the results of your cross-sell initiative:

1. Bundle related products

Offering complementary goods or services in a bundle saves the customer from looking for them on their own, increasing the appeal of the bundle.

Example: A retailer offers a home manicure kit with a topcoat, nail paint and a nail file. Even though the customer could buy just one item from the bundle, they are more likely to purchase the bundle because all the items work well together.

Related: Product Analyst Vs Product Manager: Learn The Difference

2. Offer price discounts for bundled products

Consider offering a discount for the bundled products. People like discounts, which may encourage them to consider the bundle option.

Example: If a customer purchases a group of products, they receive an exclusive 15% discount that they may not have received if they purchased the products separately.

3. Use visual aids

An effective way to improve your cross-sell impacts is to visually demonstrate to customers how different products look together. This may be useful for products with an aesthetic utility. This includes apparel and jewellery.

Example: If you manage a clothing store, showcasing items together at the shopfront or on a mannequin showcases the compatibility of these products. When customers see how well the products complement each another, they may consider purchasing all of them rather than just one.

4. Implement suggestions during the buying process

Cross-sell tactics can encourage customers to purchase additional products if you have an online store. You may use automated algorithms and digital features to suggest related products. Such features include pop-ups and dynamic coupons.

Example: When a customer adds an item to their shopping cart, your website may display 2 to 4 additional items that customers commonly purchase together. On product pages, you may also showcase items that customers frequently purchase together or items that other customers have bought on the cart page to suggest additional purchases.

Related: How To Improve Your Sales Skills: A Step-By-Step Guide

5. Address objections effectively

Many customers may initially be reluctant to purchase additional items. To address these objections, you can present customers with valid justifications for the additional purchase. This can help your customer's journey stay smooth.

Example: A customer who is purchasing a new car may initially decline your protection mat recommendation for the car floor. You can convince them to buy the extra item if you explain that they ultimately save money, as they would not require to clean their car as frequently or make as many interior repairs.

Related: Toughest Sales Interview Questions With Sample Answers

Useful Tips To Consider For Cross-Sell

Once you determine which clients you want to approach and which products you want to cross-sell, consider using the following techniques:

  • Offer additional products or services that add value. Consider cross-sell offers from your customers' perspective rather than only in terms of potential revenue. If you offer a customer relationship management tool, fewer strategically placed offers are more valuable than a large selection of offers that may not strengthen customer relationships.

  • Create spaces for interaction among customers. An online community for digital camera buyers may be as effective as direct marketing in promoting sales of additional lenses and accessories.

  • Find customers at a suitable stage in the consumer journey. Emails or targeted advertisements are effective cross-sell strategies to use for customers that have previously ordered from your website. A sales associate can easily cross-sell additional products and services to a customer in person or over the phone.

  • Utilise social selling techniques. Social media influencers are a valuable way to reach a large audience in a digital sales environment. Consider offering incentives to influencers already promoting some of your products to highlight additional products on their social media channels.

  • Use existing inbound marketing campaigns. To encourage cross-sales, include advertisements for related products in a blog post or a how-to guide. For example, if you aim your content at people who purchase luxury automobiles, include promotions for car accessories.

  • Effectively use customer data. Younger consumers often expect personalised recommendations or services with the upsell and cross-sell. Utilise customer information and data-driven tools to provide a personalised experience.

8 Cross-Selling Examples

The following are eight examples of utilising cross-sell techniques:

  1. A financial institution cross-sells insurance products to customers who already have bank accounts with it.

  2. A sales associate suggests to a customer purchasing a laptop that they also purchase a secondary hard disk to store their important data.

  3. An online mattress store includes a gallery of featured products at the bottom of each product page. This gallery contains items such as pillows, sheets and blanket covers that a customer can add to their order.

  4. A fashion outlet displays mannequins with complete outfits and accessories so that customers can see how the items align together, making them more likely to purchase the entire outfit set.

  5. A sales representative informs a client that they may include video editing software in their existing photo editing subscription.

  6. A customer service team resolves customer issues during an online chat by introducing product add-ons.

  7. A customer browses through t-shirts in an online store. They may add shorts to their order to receive a discount for buying both items.

  8. At the time of purchase, an online camera store displays a pop-up offering an extended warranty to safeguard the new camera.


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