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16 de April de 2024
What Is Cross-selling? The Strategy to Boost Your Sales
Imagine you’re in search of a new smartphone and you turn to Amazon to make your purchase. You come across a device at a very good price that catches your eye and, without hesitation, you buy it. However, just before finalizing your order, you are presented with a tempting offer to purchase a case and a screen protector, designed to increase the security of your new phone. Faced with such an opportunity, you decide to make two additional purchases.
This marketing strategy, commonly referred to as cross-selling, has become increasingly important in the world of sales. To give you an idea, according to a study conducted by Statista, the proportion of e-commerce businesses in various countries implementing cross-selling increased from 33% to 64% between 2019 and 2020.
Now, how can you implement this strategy in your company? How does it differ from upselling or downselling? Today, we’ll answer these and other questions related to this growing business strategy.
What’s cross-selling?
Cross-selling is the strategy used by sellers to offer complementary products to those that a customer already consumes or intends to consume. In this way, the aim is to provide a better shopping experience for the consumer and also allows sellers to increase their sales.
This idea is not new. In fact, there are reports demonstrating how merchants already applied this business practice in the Middle Ages. For instance, after selling a sword to a knight, a blacksmith could suggest an additional dagger, smaller and more manageable, ideal as a secondary weapon or useful tool in various circumstances.
Today, cross-selling has been perfected. Although initially it may seem controversial to encourage customers to spend more, research such as that conducted by Harvard University has demonstrated its effectiveness. By enhancing profitability per customer, these additional expenses can be justified by the benefits they generate.
Differences between upselling, downselling and cross-selling
To better understand what cross-selling, upselling, and downselling are, let’s compare these concepts. In short, upselling is when you’re encouraged to buy a slightly more expensive or better product than what you had in mind (either because it has more features or because it’s of better quality). On the other hand, downselling involves offering something cheaper or simpler than what the buyer was considering, but that still meets their needs.
Picture yourself in an electronics store. You’re checking out the latest Smart TVs, and while your top choice is large with all the bells and whistles, you’re not entirely sold on buying it. Here’s where upselling kicks in: the salesperson presents an even larger or more advanced model, explaining how it could elevate your viewing experience, hoping you’ll opt to spend a bit more. However, noticing your hesitation, they pivot to downselling, offering a simpler or smaller model that still meets your needs but at a more budget-friendly price. And if they suggest adding a wall mount or a sound system to complement your purchase, that’s cross-selling.
How to implement cross-selling effectively?
If you want to implement this practice effectively in your company, there are two fundamental aspects you must consider: your customers and your products. In other words, you need to focus on who is buying and what they are buying. It’s also important to tailor your strategy according to the type of business you run and the products or services you offer.
If you’re on the consumer side, understanding how companies use these strategies can help you make more conscious purchasing decisions and distinguish when a complementary offer truly enhances your main purchase or simply creates an unnecessary need.
Here are some tips to help you effectively implement this strategy in your company:
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Analyze the needs of your clients
In the smartphone scenario, it’s clear that cross-selling is effective only when the seller understands the consumer’s preferences. For someone who prioritizes battery life, suggesting a portable charger would be a relevant recommendation. Likewise, for those who value audio experience, high-quality headphones or a Bluetooth speaker could be suggested. Think about what your product requires to function and what accessories your customers might need down the line. For instance, if you sell printers, offering paper and ink cartridges as add-ons makes perfect sense.
Pay attention to what works and what doesn’t
Not all product bundles you put together will be a hit. Sometimes, customers are interested in combinations that you may not have thought of. That’s why regularly reviewing which offers work and which don’t is key. If something proves successful with your customers, stick with it — if not, it’s time to let it go and explore new options. Keep in mind that each customer is unique, and there’s no magic formula to please them all.
Be moderate
Maintain a balance. Cross-selling aims to add a complementary product to an already made purchase. Therefore, offer this option subtly and only once, without pressuring the consumer to add more products. Insisting too much can be annoying and you could even risk losing the initial sale.
Therefore, the trick to succeeding with cross-selling is truly understanding and addressing what your customers need. As Peter Drucker says: the best business opportunities arise from solving people’s problems. The great thing about cross-selling is that you boost your sales, but you also make the buying experience even more special for your customers, strengthening the relationship and loyalty towards your brand.
