According to HubSpot in a blog survey conducted in 2022;

“72% of salespeople who upsell and 74% who cross-sell say that it drives up to 30% of their revenue.”

This is to say, although there is no standalone marketing strategy that is the best in the world, there have been several effective marketing techniques.

Cross-selling is one of them. Of course, with a good knowledge of marketing  - any action taken to get your goods/services across the target audience – almost everyone has experienced cross-selling marketing strategy. Except you're living in a cave.

Without a doubt, cross-selling is a very unique marketing technique in that it is not industry or niche specific. Also, both e-commerce and brick-and-mortar stores can employ this sales strategy. Which makes it a really powerful marketing technique that any business can utilize for scalability. 

Also Read: 10 Marketing Psychological Principles To Help You Become A Better Marketer

What is cross-selling?

Cross-selling is a marketing strategy used to sell additional or complimentary products or services to alongside what they are already buying or intend to buy. 

Now, imagine you walked into a phone store to purchase a new phone. During the negotiation or after payment, the sales attendant recommends a pouch and a screenguard for your new phone.

The seller might try to be as persuasive as possible. If you eventually buy the recommended products, or at least one of them, then you have experienced cross-selling. 

One key thing to note here is that monoline businesses cannot practice cross-selling. 

Benefits of cross-selling

The first benefit of cross-selling is that it makes your customers feel you understand their needs and can meet them. For instance, in our phone selling example, your ability to recommend a pouch and a screen guard to your new customer will make him or her feel you truly care about their needs.

In fact, the customer might want to return to buy a charger, AirPods, or any other gadgets when the need arises. Bearing in mind that you have the potential of recommending the best product.

Other benefits of cross-selling are;

• Increased profitability/revenue

Cross-selling improves customer satisfaction by ensuring customers get what's necessary for them. Customer satisfaction leads to increased sales because satisfied customers often return to patronize again and again (more on this later). Which eventually leads to increased profitability. 

For instance, you can cross-sell a customer who purchases a laptop, a laptop bag, a mouse, or other items that will improve their experience. So you make profits selling the accessories as well as the laptop.

At the same time, the customer is satisfied. And repeat purchase is probable. And as you continue, the profit continues to increase leading to higher ROI.

• Offer competitive advantage

Competitive advantage is the unique characteristics that your company possesses that differentiate it from the competition. It is the reason people prefer  goods or services more than that of your competition.

Cross-selling helps your company stand out from the competition because they feel they get their money’s worth when buying from your company. Because of this, they may prefer your service over others while also referring you to others.

• Retain customers

Your company retains customers from cross-selling when they have a positive experience. If you own a fashion store, for instance, offering your customers a matching outfit for a newly purchased shoe and vice versa can just be the simplest way of buying their trust and loyalty for your services.

Firstly, by making customized recommendations based on their prior purchase, you have personalized their experience. This will help them develop a strong emotional bond with your brand.

Secondly, you save their time and effort by providing them with supplementary goods or services that they might require in addition to their first purchase. Hence, they may constantly prefer your fashion store because of this advantage.

• It is cost effective

Acquiring a new customer can cost five times more than retaining an existing customer and increases customer retention by 5% can increase profits from 25-95%”.

Because cross-selling allows you to target current consumers who are already familiar with your brand and products, it is a cost-effective marketing tactic just like side project marketing. It is cost-effective because it helps you save money on marketing expenses that you normally incur when bringing in new clients. 

So instead of concentrating on acquiring new customers, cross-selling helps you increase the effectiveness of your current marketing initiatives. Because you already have insightful information about your consumers’ wants and preferences.

• Improves customers’ lifetime value (CLV)

Another way cross-selling can benefit your business is to increase customers' lifetime value. 

Customer lifetime value (CLV) is the projected revenue that a client will generate for your company throughout their relationship. Beyond profitability, CLV is significant since it can indicate the quality of your customers' relationships and equally reveal your brand's patriots and net promoters.

You might be wondering how lifetime value relates to cross-selling. Simply put, when a business successfully cross-sells, it secures a higher sale from a consumer, which results in increased income for the company.

Upselling vs Cross-selling - what are the differences?

Cross-selling and Upselling are two popular sales strategies that are often misinterpreted to mean the same thing. But the differences between them are very glaring.

Firstly by way of definition; Cross-selling is a marketing strategy used to sell additional or complimentary products or services to buyers in company with the one they initially intend to buy.  For instance, a car seller may cross-sell a maintenance package or a set of floor mats to a buyer of a new car. 

On the other side, upselling entails persuading customers to buy a more premium or standardized model of the good or service they are already interested in. For instance, still using our phone purchase example.

Upselling occurs when the sales attendant recommends a higher version of the same phone you went to purchase. So say your initial interest was in iPhone 13 mini, if you finally settled for the Iphone 13 Pro because the sales team recommended it, then that’s upselling. 

Now, cross-selling and upselling differ primarily in that cross-selling entails "providing customers with additional goods or services that are related to or complementary to their initial purchase".

Cross-selling points customers to products they would eventually purchase. Whereas upselling involves "encouraging customers to buy a more expensive version of the same good or service".

Another major distinction is in their purposes.  Cross-selling frequently adds value to the customer's experience. Because complementary goods are goods a customer would eventually buy.

While upselling frequently seeks to raise the worth of the transaction; that is, making the buyer pay for a higher version of the same product. Which of course is always undoubtedly more costly. 

Cross-selling and upselling are both viable sales tactics. But companies must employ them responsibly and in the customers' best interests. Without being enforcing, inappropriate, or unethical.

An effective cross-selling or upselling plan ought to enhance customers'  satisfaction and loyalty for smooth long-term business deals in the future.

Cross-selling strategies with examples

Here are 4 most popular Cross-selling strategies to boost your sales like never before: 

1. The bundling strategy

The bundling strategy for cross-selling involves offering similar goods or services as a package deal. The bundling strategy specifically raises the perceived value of the package among customers. Makes it more alluring. For example, a beauty brand can choose to bundle moisturizer, toner, and cleanser in one package.

In the case of an e-commerce store, the bundling strategy makes it simple to buy everything at once rather than investigating and comparing two, three, or more items separately. 

However, to be able to mine the gold in the bundling strategy, making your bundle offer less expensive than ordering the product separately makes it a terrific marketing approach known to boost sales.

2. The "frequently bought together" strategy

Numerous e-commerce websites employ this as a standard cross-selling strategy. With this strategy, businesses encourage customers to add more things to their cart by bluntly recommending more products that customers frequently buy in addition to the ones they are now examining.

For instance, an online store in the photography niche can recommend a camera bag and memory card to customers purchasing a camera. The "frequently bought together" strategy yields massively.

Because it encourages customers to complete their purchases by bringing to their attention any goods they may have forgotten. Or failed to take into account. 

3. The "customers who bought this also bought" strategy

This strategy, which is similar to "frequently bought together," promotes more goods that buyers have bought in addition to the item they are contemplating. Because it introduces customers to new products that they would not have previously explored, the approach has the potential to be successful.

Global brands like Amazon are best known for strategies like this. This is a section that appears when you search for a product on the platform and click on the product page.

In addition to the product, you are currently seeing, a list of things that other customers have bought is shown in this section. The idea is that you may also be swayed to make a purchase.

4. The "product suggestion" strategy

This strategy is similar to the "customers also buy" approach but not exactly the same. Why? Because the "customers also buy" approach entails making product recommendations to potential customers based on past shopping or browsing history.

On the contrary, the "product suggestion" technique, expressly suggests products that complement the item the customer is presently looking for and also hints at how to use them.

So the suggestion is usually based on some data sources. Including customer demographics, past purchases, browsing habits, and product features. 

Brands in the fashion industry are popularly known for this strategy. They use content like "wear with this", "recommended" and "try them like this" among others. With a matching outfit placed side by side matching shoes, hats, and handbags in most cases.

The essence is to give potential buyers an idea of how to match the outfit, shoe, bag, or hat if purchased.

Final thoughts

Companies can implement cross-selling to boost their sales, increase profit, satisfy customers, and foster brand loyalty. But most importantly, cross-selling must be distinguished from upselling.

Since the latter might be viewed as forceful and result in unhappy customers. By carefully studying the cross-selling strategies provided in this article and adhering to the instructions, you can maximize your business’s revenue while satisfying your customers at the same time.

However, keep in mind that the secret to successful cross-selling is largely in concentrating on the demands of your consumers. And offering pertinent solutions that enhance their purchase.

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