How to Use Cross Selling to Increase Sales

Cross selling is the art of persuading an existing customer to buy additional products from your business by convincing them the products are best if used together.

It can include products, services, or a combination of the two. A loyal customer base presents an excellent opportunity for business owners to find additional products or services that meet their customers’ needs.

Savvy marketers use this concept to increase sales by informing consumers how one product complements another. Cross selling can take several forms. Understanding your customers’ motivations helps you choose which approach to take.

Bundling Products

Bundling is the practice of offering discounts to customers who buy multiple products in one package. Television cable companies offer bundled packages to customers who purchase their cable service, telephone, and Internet services. Another example is a gift set of beauty products in smaller sizes, making the price seem lower. The key to a successful bundling strategy is to show customers they are getting a bargain.

Professional Services Requiring Expertise

The necessary evils of life, such as insurance and mortgage payments, offer great opportunities for cross selling. Busy consumers hate to shop around for insurance, but will do so if they believe they are paying too much. Customers would much rather trust someone to handle the details for them. Smart insurance agents ensure their customers receive all the discounts available to them, such as safe-driver discounts. This way, customers will relieve themselves of the worry of paying too much for insurance and will purchase health, auto, life, and home insurance from one provider.

Automobile servicers can also take advantage of opportunities to offer additional services to customers. When customers come in for an oil change, technicians can inform them what else the company offers and might convince customers a new filter or belt is necessary. However, with these tactics, the technician risks losing the customer unless trust has already been gained.

Combining Services and Goods

Many service companies offer products that complement the service they offer. For example, hair salons stock many hair-styling products, offering customers the hope of replicating their salon results at home. Restaurants sometimes offer the spices and sauces they use in their dishes. Smart business owners who use this type of technique know what motivates their customers to buy their service, and use this knowledge to offer products that will fly off the shelves. This method is useful only if the product is as good as the service company says it is. Selling inferior products can backfire, requiring costly damage control.

Package Marketing

Many companies have teamed up to advertise one another’s products on their packages. For example, an electronic item may include a statement recommending the best brand of battery to use with their product. This has become popular for food companies that list recipes on the back or inside of packages.

These recipes may list a specific brand for some of the ingredients needed, either one of their own brands or another company’s brand. Another technique is to offer a detachable coupon on one product, prompting the customer to purchase that item before leaving the store. This technique is successful when the two products are complementary, such as peanut butter and jelly or a desk and office chair.

Required Add-Ons

When shopping for a new camera or computer, you probably won’t leave the store with just that item. Instead, you’ll come out fully equipped, with extra batteries, software, a tripod, and a carrying case. Retail employees are trained to cross sell in this manner by gaining expertise about all the products and informing customers of their additional needs. Some companies even use the bundling approach to offer all the necessary add-ons at one price, which may or may not be discounted.

Another example of a company using this method is a furniture company offering a mattress along with a bedroom set. Use this technique effectively by ensuring employees are sufficiently knowledgeable to recommend the correct products necessary. Otherwise, your efforts might result in having to do damage control to correct buyer’s remorse.

Other Examples

Amazon, known for its convenient shopping website, uses a clever technique that recommends additional products based on a customer’s buying habits. Using an algorithm that also accounts for what other customers purchased with a product, it keeps customers browsing. Customers who keep browsing tend to find something else to buy. Credit card companies use a technique to offer low balance transfer rates along with skip-a-payment promotions. The customer appreciates the opportunity for the low rate and skipped payment, while the credit card company gains additional balances to earn interest. This is most successful with sufficient market research so business owners understand which products customers will respond to.

The best kind of cross selling promotions are designed to gain customer loyalty. By winning your clients’ trust, they will naturally choose your product and recommend your company to their friends. By offering valued products and services, your customers do some of your best marketing for you.