Cross-selling is a strategy used by salespeople to increase the overall value of a sale by suggesting additional products or services that complement the existing purchase. It is commonly used in retail sales but also has become common in B2B sales as well as service-based industries like professional firms and agencies.
One of the best ways to cross-sell is to better understand your ideal customer’s needs and common purchase behavior. A CRM like Pipedrive can help you detect trends and move deals through your sales process using a highly-visual pipeline tool. Pipedrive plans start at $12.50 per month, per user, and includes detailed contact profiles and deal history, as well as performance reporting. Visit Pipedrive to start a 14-day free trial today.
How Cross-Selling Works
Cross-selling works by suggesting products or services that complement what a customer is already purchasing, even if those products aren’t directly related. For example, a landscape company might cross-sell one of its lawn maintenance customers by offering snow removal services. Or, a custom-tailored suit store might ask you if you’d like to see any shoes to go with that brand-new coat and pants.
Both of these examples demonstrate how a salesperson can increase his or her sales by suggesting relevant services or products that match the customer’s needs. Cross-selling is an important tool in a salesperson’s toolkit and is definitely something worth understanding and implementing in your sales process.
When done well, cross-selling has the potential to help increase sales by making it easy for customers to purchase additional products or services that make sense for them. Understanding how to use this tactic can help you to improve your sales performance and increase your business revenue.
How to Cross-Sell in 5 Steps
Cross-selling usually happens after a customer has made a decision to purchase a product or service from your business. As a result, most of the time you’ll have already walked through most of your sales process. Still, if you prepare, you can effectively lay the foundation for a successful cross-sell that benefits both you and your customer.
Here are five steps that will help you cross-sell your next customer:
1. Review Your Customer’s Needs
Before you can effectively cross-sell, you need to fully understand a customer’s needs. This is the purpose of the consultative sales process and cross-selling can be a way to check to be sure you are addressing all of the pain points your customer has shared. As your customer has made a purchasing decision, review in your mind the specific needs you talked about, and consider whether there are additional solutions that you can offer that would be beneficial.
For example, if your customer has just purchased 10 laptops from you for their field service team, you might review the conversation you had with them during the sales consultation and remember that they told you that one of the biggest struggles they face is reliable communication. As a result, you might consider what other products you might be able to offer that would address those concerns.
2. Suggest Complementary Products
After you’ve reviewed the customer’s needs, identify and suggest one or two products that are a natural fit with what they are already buying. One of the most important factors is to resist the temptation to offer too many options at this stage. You are the consultative expert and your cross-selling will be most effective if you limit the options you offer to the best fit for your customer’s situation.
Continuing with the example above, you might suggest that the customer consider upgrading the mobile devices that their field team uses since you’re able to pre-load them with the same field service management software that they’ll be using on their laptops. Since you already know that this is likely to address a need, and it is a natural fit with the sales conversation you’ve had, you can confidently offer them a solution that helps them solve their pain point.
3. Communicate Why It Adds Value
Once you’ve suggested products that are a natural fit to what your customer is already purchasing, the next step is to help your customer understand why there is a benefit to them personally or for their business. Since the goal isn’t simply to create a bigger sale but to add value, it’s important that you use the principle we talked about and use language that communicates the specific reason that whatever you are suggesting is good for them.
Our field service team might benefit from having the ability to access customer information while on-premises, even when they aren’t able to use their laptop. In addition, since many mobile devices offer the ability to tether your computer using cellular data, there’s an added benefit of allowing them to connect the laptops they are purchasing from you already.
4. Offer an Incentive
When offering an additional product, offer an incentive for the customer that makes it easy for them to say yes. This is an important step since it helps the customer immediately get a real sense of the value you are adding. While you’ve talked about the value, an incentive like a discount or package deal, or another bonus like free shipping or an extended warranty, help create a tangible value that the customer is able to easily understand and decide.
You might suggest that the mobile devices you recommend are currently on sale, and include a trade-in for older devices to further lower the cost. In this scenario, you are making it easy for the customer to upgrade since there is minimal upfront cost, especially considering the benefits they receive.
5. Address Objections or Concerns
Many times, since a customer wasn’t initially considering the product or service you have just offered, they may be hesitant to make an additional purchasing decision, even if you’ve made it easy and addressed the value it brings to them. In that case, take time to address any objections they might have by asking clarifying questions. Then, reposition the value and check to be sure you’ve addressed their specific concerns.
Your field service customer might be unsure whether they are ready to go through the effort of upgrading everyone’s smartphone. That’s a natural concern and you might clarify by asking “I understand that it’s a hassle to switch out your devices, but if we handled all the transfer of information and set up each device individually, would that make it easier for you?”
Once you’ve clarified their objection, you might reposition the sale by saying, “It sounds like you’re concerned about the effort involved to switch everyone over. The good news is, I can get you the incentive we talked about if we setup the contract today, and then each of your reps can take advantage of our red-carpet service when they’re ready and we’ll take care of everything for you.” This helps you offer a solution that addresses their concerns and meets their needs.
5 Tips for More Effective Cross-Selling
1. Focus on Adding Value
Cross-selling only works as a strategy when it’s focused on adding value to the customer. While it can be a strong way to increase overall revenue, if it isn’t focused on the customer’s needs and desires, it risks alienating any trust you’ve built in the customer relationship. If you’ve done the work of understanding your customer and his or her needs, it will be easier to keep the selling process focused on meeting those needs with a range of products or services.
For example, it doesn’t add value to a customer to attempt to just start adding products and services because you want to increase the dollar amount of a sale. Instead, focus on the needs you’ve uncovered and consider what additional solutions you can offer that you may not have previously discussed.
2. Cross-Sell Products that Make Sense
One effective way to cross-sell is to create packages or bundles that make sense to your customer. A great example of this is a bundle of accessories that complement a main item. You might sell a mobile phone with a protective case and a set of headphones or earbuds. Those additional options make sense because they are products a consumer might naturally be interested in when they purchase a mobile phone.
The key here is to make sure that you’re offering a collection of items that make sense based on your customer’s needs and the specific products they are already purchasing. Just trying to stick products together in order to make an additional sale doesn’t work because it comes across as sales-y to the customer.
Pro tip: One of the best ways to offer products or services that make sense is to keep track of your customer interactions using a CRM like Pipedrive, which allows you to see past deals and make informed suggestions that add value to the customer. Pipedrive is an easy-to-use sales management tool with plans that start at $12.50 per month. Visit their site for more information.
3. Be Transparent
When you’re having a sales conversation with a customer, be open and honest. No one likes to feel like they’re being “sold to,” meaning, no one likes the feeling that the salesperson they’re working with has his or her own interests before the customer’s. Most of us have had this experience, whether it’s at a car dealership, a department or electronics store, or at an insurance agent’s office. Let that be motivation to avoid treating your customer that way.
Customers can sense when you’re trying to “sell” them into something they don’t need, or that isn’t a good value for them. They also get uncomfortable when it feels like whatever they are buying is confusing or the details seem hidden behind jargon and fine print. Instead, be upfront and transparent. Help the customer see how you can help by laying out the information
4. Use Language That Communicates Value
When you talk to a customer about additional products or services, be sure to communicate with them in a way that focuses on the value you are trying to create. For example, if you are an HVAC contractor, if you sell a new air conditioning unit, you might say something like “most of our customers have found that a smart thermostat saves them a lot of money in the long run. We have two models that work with your new unit that I’d love to tell you about.”
That helps the customer focus on the benefit to them instead of seeing it as an attempt to squeeze more out of a sale. In fact, how you talk to the customer about the items you are attempting to cross-sell can often make all the difference in whether or not they decide that mailing an additional purchase makes sense for them.
Usually customers are most willing to make a purchase when they feel that the thing they’re buying will save them time, money, or give them peace of mind. Talk about those specific attributes and how the product you are cross-selling helps.
5. Make it Easy to do Business
If you want a customer to purchase something else in addition to what you’ve already sold them, make it as easy as possible for them to say yes. Cross-selling is much more successful when the additional product you are trying to sell is a natural fit and has an exponential value that the client will find hard to turn down.
Sometimes this is a discount or bonus offer only available when certain items are purchased together. Other times it can be as simple as offering to ship for free when an order is over a certain amount. We’ve all experienced an online store that promises that if we add $10 more to our cart, the store will ship it to us for free. That makes it easy to say yes, since there’s an overall added benefit beyond just the additional product.
For example, a friend of mine works for a company that sells paper goods. Each time a store places an order, the sales rep asks if it would also like to order toilet paper. Since toilet paper weighs almost nothing, it costs almost nothing to ship on a truck, so the company passes along that savings to the customer. This makes it easy for a store to say yes, since there isn’t the added cost of shipping that would apply if they later placed a separate order for that product.
When to use Cross-Selling
Cross-selling is most effective when you are the point of sale and the customer has made a purchasing decision. The purchase provides an anchor to which you can relate the new product or service you are trying to cross-sell, and allows you to pivot to how that additional purchase adds value.
Here are a few times when cross-selling is appropriate and effective:
- When you sell complex products: If you are selling something that benefits from additional components to get the most value out of a product, cross-selling can be an effective way to meet a customer’s needs.
- Retail sales: There are a variety of ways to cross-sell in retail environments from selling batteries for electronic devices, to suggesting accessories that go with a clothing purchase.
- B2B service providers: Often the customers you serve have other needs that you may be able to meet. For example, if you’re a bookkeeping firm, you might suggest tax or even audit services in addition to your regular role.
In reality, while I’ve given you a few specific examples, cross-selling can be built into almost any sales process if you follow the principles and steps covered in this article. Look at your sales process and ask yourself where there are opportunities to add value to your customers by offering additional products and follow this guide to get started.
Benefits of Cross-Selling
The most obvious benefit to your business is that cross-selling can lead to additional sales revenue. As a salesperson, that can be a powerful incentive to cross-sell since it can help them meet their goals faster. It’s also easier to sell additional products to an existing customer than it is to find a new customer and start the sales process all over.
Here are four of the most significant benefits of effective cross-selling:
- Increased sales revenue: The most obvious benefit to your business is that cross-selling can often result in a larger overall sale, which generates more revenue for your business and helps salespeople meet their performance goals.
- More profitable sales: Since the additional sale took place as a part of your original efforts, there is a lower overall cost of sales for both components, compared to selling them separately, which results in a better profit margin.
- More satisfied customers: Effective cross-selling also results in customers who are more satisfied since their needs are more fully met.
- Better long-term customer relationships: Finally, profitable customers who feel like their needs are met end up becoming long-term relationships that benefit both the customer and your business.
Cross-Selling vs Up-Selling
One of the most commonly-confused concepts is the difference between cross-selling and up-selling. Where cross-selling involves selling a different product or service that make sense based on what your customer is purchasing, an up-sell is simply selling a more expensive variation or more of what the customer is already agreeing to buy.
In the example of a custom suit maker, an up-sell might be a higher quality fabric, or stylized buttons. A cross-sell would be a pair of cuff links or a belt. Up-selling is more common since in many ways it’s easier. The customer already wants the product, so you simply look for a way to move them to a more expensive version. Cross-selling, however, has greater benefits since you’re able to move customers to purchase more products (which can then also be up-sold).
Bottom Line: What is Cross-Selling
Cross-selling is an important practice for salespeople to use in their sales process as it adds value to your customers by addressing more of their specific needs. It also helps your business increase revenue by adding incremental sales with each customer. The principles and steps in this guide will help you cross-sell more effectively and create a win-win for both you and your customers.
A successful sales process requires a CRM that helps you keep everything organized. Pipedrive lets you keep track of your customers and deals with a simple-to-use interface and an intuitive sales pipeline. Plans begin at $12.50 per month, per user and includes contact management, reporting, and sales goals. Visit Pipedrive today to start your 14-day free trial.