12 Useful Tips for Successful Cross-Selling
The current level of competition makes the acquisition of new customers a very challenging task and, it’s no wonder that, merchants try to increase repeat purchases and the AOV by all means.
Cross-selling is one of those advantageous marketing methods, which makes it possible. This marketing tactic obtains several benefits valuable not only for merchants, but for customers, as well.
Advantages of Cross-Selling
Benefits for both sides
Cross-selling is profitable for sellers as it allows them to sell more, closely tie customers to their products, and make them purchase again. However, it is also advantageous for customers since they can buy required supplementary products in one place and save time.
Sellers get more sales
Even though, the price of related products can’t be compared to the price of the original purchase, if properly arranged, cross-selling can draw really substantial revenues. For instance in 2006, Amazon reported that tremendous 35% of the year’s sales came from cross-sales. This example confirms a great potential of cross-selling marketing for e-commerce.
Sellers retain customers and extend their lifetime value
Customers perceive unobtrusive cross-selling products as useful and sometimes necessary add-ons and therefor positively treat them. As a result, sellers can gain more trust and extend the lifetime value of each customer.
Nevertheless, any marketing method has some restrictions and effective ways to be successfully implemented in practice. Below you will find 12 tips, which can make your cross-sells even more efficient.
Effective Cross-Selling Tactics
Know your customers before cross-selling
Relevant products may differ for different customer groups. Cross-selling offers of cameras for professional and amateur photographers will likely require different supplementary items. You can offer interchangeable lenses in the first case, and a camera case – in the other.
In 2006, Amazon reported 35% of the year’s sales came from cross-sales. Source: Amazon
Sell only relevant items
Make sure that the offered additional items complement the original product or better create additional value with it. Irrelevant items just distract your customers and create useless informational noise.
Make your cross-selling offers sound natural
Customers usually higher evaluate a valuable advice rather than urging calls. So, you should create easily perceived and neutral enough names for your cross-selling promotions: “Customers who bought this item also bought” or “Frequently bought together”. These are the axiomatic examples by Amazon, which were successfully tested and accepted by multiple marketers worldwide.
If you want to make your recommendation labels a bit more different, note the next valuable rules:
- If using appeals, make them more personal – “You Might Also Like These” instead of “We Recommend”;
- Use emotional verbs for your cross-sells: need, want, etc. – “Need accumulators?” or “Want headphones?”
- Accompany cross-selling appeals with urgency notifications: “Only two items left” or “Offer ends soon”.
Offer a limited number of relevant items
An overwhelming choice makes customers feel confused and even can lead to the abandonment of the initial product. So, offer only one or two of relevant additional products in your promotions.
Always estimate your operational costs
Cross-selling is a valuable tactic, but sometimes and for certain customers it can be non-profitable. According to the Harvard Business Review magazine, one of the five cross-buying customers is non-profitable due to different reasons. Some of them require too much attention and eventually just waste your time; the other ones are inclined to change their mind and ask for returns; while the most disappointing clients do both. So, if you can’t target your cross-sell promotions to relevant customers, just make sure that the mentioned above operational costs are included in your profit and loss account.
Wells Fargo claims to sell almost six products to each household. Source: Wells Fargo
Do not offer expensive additions
The price of supplemental items should be directly correlated to the initial product price. It is obvious that customers are inclined to spend a definite amount of money and psychologically are not ready to exceed it twice, for example. So, offer only the items, which cost not more than 25% of the initial product price.
Offer only valuable add-ons rather than just clear out the stock
The add-ons to original products should have their own high values, which are clear for your customers. This enhances the credibility of your store and makes customers trust your suggestions. If you offer some damaged or defective products, let clients know about this. Otherwise, you run the risk of losing the customer.
Combine cross-selling with other marketing incentives
In order to intensify the cross-sells you can combine them with other marketing incentives like discounts, coupons, or free shipping.
Bundling products is a common tactic to convince customers to purchase the whole set of complimentary products. Often accompanied with price breaks this tactic works great and allows you to sell even stuck items, which would possibly be never bought in other circumstances.
Cross-selling offer locations are important
You can display related products anywhere on your site, but the most effective place for cross-selling is the shopping cart and product page. This is particularly true for so called “impulse” products, which are purchased just before the checkout as it is in brick-and-mortar stores.
In May 2009, cross-sells increased the number of Gap’s items sold per transaction by 10%. Source: Stone
Besides, make sure that related products do not interrupt natural purchasing and checkout processes. Customers should have an opportunity of easy navigation to the shopping cart and initial product page from the additional item.
Use on-product copies of cross-selling offers
If you have an opportunity to make changes to product labels, you can also recommend additional items to your customers there. For example, cosmetic product manufacturers offer to use their hair shampoo combined with hair balsams of the same brand for better results.
If you have a lot of products sold in your store, you should better automate the cross-selling process choosing an e-commerce platform, which provides the corresponding functionality.
The Frequently Bought Together module makes your site meet the Web 2.0 standards, attracts customers, and encourages them to place additional products to their carts.
What do you think about cross-sells? Please share your ideas in comments below.