Why cross-selling is important

Cross-selling is simply recommending products or services to your existing customer that will complement or expand the products or services they already have. Look at the travel industry for instance. The travel company may sell you a ticket on a flight to your desired vacation destination – that’s the original sale. The cross-sell occurs when they sell you a vehicle rental for when you land, a room in a hotel to stay in, and a guided tour.

When you realize however that it is 5 to 25 times more expensive to get a new customer than it is to keep an existing one, it makes sense to grow through cross-selling. Regular customers are worth up to ten times as much as their first purchase! And, repeat customers spend 33% more than new customers. You’re 60-70% likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect.

One of the most common and easiest ways is to send purchase recommendations to customers. Take note of how their purchase history has been, what their interests are, or even where they spend the most money. Using this information, one can send product recommendations. Amazon does an amazing job of this. They send emails, app notifications and even in-app product listings similar to what you have purchased before.

It is estimated that 35% of Amazon’s revenue is generated by cross-sells. According to Forrester, product recommendations account for an average of 10-30% of eCommerce businesses’ revenues. Purchases, where a recommendation is clicked, see a 10% higher average order value and 5 times higher per-visit as compared to purchases where a recommendation is not clicked.

Shoppers that click on recommendations are 4.5x more likely to add items to cart and complete their purchase. 49% of consumers say they have purchased a product that they did not initially intend to buy after receiving a personalized recommendation. 52% of consumers would share personal data in exchange for product recommendations. 54% of retailers report product recommendation as the key driver of the average order value.

When you see those posters or ads that say buy 3 for $99, you convince yourself you need 3 shirts when all you needed was one. This discount to buy more has high success rates where people tend to buy more products than they wanted to. Also, people have a tendency to pay more money to avoid shipping charges and end up buying more.

Suggesting related purchases is a very prevalent form of cross-selling. It uses the logic, “Hey, you bought this, why don’t you buy this too? It goes with what you bought, already.” This is a subtle and probably super-effective way of getting customers to buy more. If someone buys just one part of a package, you can try and convince them to buy the whole package.

A very common way to reward a customer is through adding points or e-cash into their ‘wallets’. A lot of businesses follow this pattern, the most popular of which is provided by airlines, where you can accumulate flyer ‘miles’ that you can use later to earn free flights. This encourages the customer to keep flying with the airline to earn that free flight!

Cross-selling is one of the most successful sales strategies in eCommerce, because it focuses on presenting comparable things to clients who are now watching an item on the online website or have included it in their shopping cart. According to McKinsey, cross-selling can increase sales by 20% and profits by 30%.

Cross-selling adds value to the customer through lower bundled prices, more variety in terms of products and one-stop shopping. A popular cross-selling method is to showcase a list of product recommendations at the bottom of the product page. Customers are at least likely to have a look at those lists, if not to add some of those items in their cart.

The checkout page facilitates cross-selling, as customers pay more attention to it. Most often, brands introduce the “customers who purchased this item(s) also purchased” strategy at this point in the buying process. Placing cross-sells on the Thank-You page/follow-up email does not disrupt the purchase process.

Driving revenue by retaining existing customers is the name of the customer success game – and strategies that can drive even more revenue – like cross-selling – have huge ROI. And customer success managers are in a great position to cross-sell successfully – because they already have the inside scoop on the customer.

TMP’s role

Here at TMP, our agents make sure the customers are well-informed on the variety of products and synergy between them. Our agents have the expertise to pro-actively offer customers information on other products or services that are available. We believe in being one step ahead of the competition!