What is Cross-Selling?
Cross-selling (and upselling) are common methods used by online retailers to increase revenue from existing customers.
Cross-selling involves encouraging a customer to make a purchase in addition to the primary product. A classic example of this would be offering customers to add a pack of batteries to their basket alongside their new electronic purchase. Adjacent to this, upselling offers customers an upgrade of the primary product. For instance, offering customers a larger size version of the same product is a common example of upselling.
These strategies help companies retain customers and increase prospects of making sales. To utilise cross-selling and upselling strategies, data on existing customers is crucial – from their bought items information to their product browsing history.
Where do we see Cross-Selling?
In ecommerce sites, cross-selling can be seen regularly on product pages, and during the checkout process in particular. Effective cross-selling satisfies the customer’s needs by alerting the person about additional products that may be relevant to the purchase they are looking to make.
We see cross-selling in everyday examples, whether this is online or offline. For instance, when purchasing a pair of shoes, you may be offered shoelaces or shoe care products. Or if you are buying a new phone – additional items like a screen guard, phone case and headphones might be offered. Online, cross-selling is commonly seen during the checkout process where there are recommendations for items “frequently bought together”.
When running an online business, cross-selling can be implemented in a number of different ways:
“Customers Also Bought”
By using purchase data from previous customers, products which are often purchased at the same time can be displayed on the product page, therefore nudging the customer towards purchasing an additional item that they may have forgotten before completing checkout.
Accessories and Additional Items
With some items, cross-selling can be naturally implemented without feeling intrusive, by offering the accessories or attachments which are sold separately - for example, batteries for an electronic device, or care products for a new pair of shoes.
“Complete the Look”
When a product is part of a collection, whether it be clothing, furniture or otherwise, a sensible cross-sell would be to offer the other items from within that same collection as a potential product the customer may wish to add to their basket - to ‘complete the look’.
Following up on previous purchases with email recommendations of additional complementary products or offers that may interest your customer based on their purchase history. This is an easy way to test the implementation of cross-selling techniques for your business as it requires little investment and does not require any changes to the format of your ecommerce platform.
Offers on Related Items
Add nudges or messages to encourage your customers to purchase a related item in order to complete an offer or allow them to reach a free delivery threshold. If your customer feels as though they would be getting a good deal, it can make them more likely to purchase the additional item.
Benefits of Cross-Selling
Customers often cherish customer service which feels personalised to them. The cross-selling tactic increases customer satisfaction, retention of previous customers and the average customer lifetime value.
The main goal of cross selling is to increase the average order value which in turn translates into higher revenues for your online business. Increasing average order value can encourage increased customer loyalty and allow your business to generate increased revenue from the same amount of traffic.
Online shops can benefit from using this strategy by taking advantage of historic customer purchase data, thereby making relevant product suggestions, creating bundle packages and ultimately giving customers a better purchasing experience.
Whether your cross-selling strategy involves showing bundle packages or individual product recommendations - it creates a greater customer experience and increases value for the customer.
In the long-term, this makes for more effective campaigns with higher returns. Thereby, cross-selling is an important marketing tactic that can be used to increase the average order value by persuading existing customers to purchase ancillary products.
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