Cross-selling – selling similar or related products that complement those that existing customers already have – is one of the most successful sales strategies available. McKinsey research shows that cross-selling can increase sales by up to 20 percent and profits by up to 30 percent. And it is much easier to sell to existing customers than to new ones. Marketing Metrics puts the odds of making a sale at 60-70% for existing customers, but only 5-20% for new prospects.
Many companies struggle with cross-selling, mistakenly thinking it is just a case of applying the personalised marketing they usually use. Experience suggest personalised marketing provides a good foundation for cross-selling, but by itself, is not enough. An automotive insurer only achieved a 0.1-1% cross-selling rate, largely because it used the same approach as it used for new customer acquisition, ignoring the insights it had about its customers and their behaviour.
Here are ten tried and tested tactics that will significantly improve your company’s cross-selling:
One. Understand your customers, their jobs and journeys
Why is it Important?: Cross-selling only works when it is targeted at specific customers, during specific interactions, in specific customer journeys. The Harvard Business Review reports that cross-selling is profitable in the aggregate. But one in five cross-buying customers are unprofitable and together this group accounts for 70% of a company’s ‘customer losses’.
Takeaway: Companies should identify profitable target customers, understand their jobs-to-be-done, map the journeys they use to get them done and identify the interactions where cross-selling is most likely to be effective (a process known as ‘intent mapping’).
Two. Learn from what worked with other customers, competitors and disruptors
Why is it Important?: Cross-selling is not new. It is widely used by companies, their competitors and particularly, by disruptive new entrants eager to grow the market. The most successful vehicle repurchase management programme at Toyota, that successfully cross-sold insurance, together with a new vehicle and its financing to 35% of customers it was offered to, was based on a successful ‘key for key’ marketing campaign operated by a Northern English dealer.
Takeaway: Companies should learn from what worked in the past (and what didn’t work), irrespective of whether it worked for them, for competitors or for disruptors.
Three. Create complementary cross-sales bundles that build on prior purchases
Why is it Important?: Cross-selling works best when it offers products that complement or supplement products already purchased by customers. Particularly those purchased recently. Increasingly, these products will be offered by and through partners, rather than just by companies themselves.
Takeaway: Companies should identify families of related products, create dynamic product bundles that can be added to after purchase and reward customers for purchasing additional products within bundles. They should also look to incorporate partner products into bundles where they create additional value for customers.
Four. Create a scalable, decisioning engine focussed on specific cross-sales offers
Why is it Important?: Managing cross-selling across a large customer base, with multiple customer journeys and potential category entry points, is impossible without appropriate cross-selling technology. This is likely to include a customer datastore, intent analytics to identify category entry points, a decisioning engine to identify the best cross-sales offer and a personalised marketing platform to manage omni-channel communications.
Takeaway: Companies should develop their cross-selling ‘technology stack’ that uses the marketing technologies they already have as far as possible. They should also develop their complementary capabilities – combinations of process, other technologies, roles, collaborative work, work systems and governance – necessary to operate cross-selling through the stack.
Five. Identify customer intent to purchase and respond quickly
Why is it Important?: Cross-selling, like personalised marketing generally, only works when it reaches customers who are in the market for the product offered (at a category entry point). It does not ‘generate demand’ per se. Rather, it builds on the foundation already laid by strong brand advertising, personalised communications and particularly, customer service (that collectively create ‘mental availability’).
Takeaway: Companies should use intent analytics to identify when customers are in the market and respond with highly targeted cross-selling offers as quickly as possible.
Six. Personalise cross-sales offers to show their value to customers
Why is it Important?: Cross-selling offers work best when they are personalised around individual customers and their needs, where they clearly show the value of the offer to the customer (typically, by increasing the value of products already purchased) and where the customer trusts the company to make suitable and desirable offers. Invespo reports that although personalised cross-sells make up only 7% of e-commerce store visitors, they account for over 26% of their revenue.
Takeaway: Companies should construct personalised offers that are suitable and desirable for eligible customers, and that show them how they will help them get their jobs done faster, easier and better.
Seven. Communicate cross-sales offers consistently across all channels
Why is it Important?: Cross-sales offers should be communicated consistently across all channels, whether outbound, inbound or in-moment (driven by customer product usage). Increasingly, this means implementing the cross-sales offers at key points in purchase pathways, as well as the customer usage journey. The cybersecurity company Bitdefender tripled its conversion rates by integrating cross-selling offers on its ‘Thank You’ page. Their average order value also increased by 12 percent.
Takeaway: Companies should develop their omni-channel capabilities so that irrespective of which channel they contact customers through, or the customer contacts them through, they see the same cross-sales offer.
Eight. Make it almost effortless to purchase the cross-sales offer
Why is it Important?: Once a customer sees a cross-selling offer and becomes interested, it should be as easy as possible to act up on the offer without unnecessary hurdles being put in their way, (such as a credit-check that should be carried out before making the offer). Each additional hurdle reduces the likelihood the offer will be acted up on. Amazon reportedly attributes as much as 35% of its sales to cross-selling through its ‘Customers who bought this item also bought’ and ‘Frequently bought together’ options on every product page.
Takeaway: Companies should ensure that acting up on a cross-sales offer is as easy as possible. Any hurdle that hinders the customer acting up on the offer should be removed, by-passed or reduced (thereby increasing ‘physical availability’).
Nine. Continuously test, measure and track cross-sales offers
Why is it Important?: Irrespective of how good its research, intent analytics or personalised offers, cross-selling will improve over time through a structured process of continuous improvement. The repurchase management programme at Toyota that cross-sold insurance together with a new vehicle and its financing, more than tripled the cross-sales rate (from 10% to 35%) after a year of continuous improvement.
Takeaway: Companies should rigorously test offers in the market before releasing them, measure their performance and continuously improve all aspects of the go-to-market process.
Ten. Get consent to market to cross-sell to customers
Why is it Important?: Without consent, marketers are limited to cross-selling through legitimate interest (within Europe and the UK). This only allows offers about products similar to those customers already have to be communicated, severely limiting the scope of cross-selling.
Takeaway: Companies should work hard to get consent from customers for marketing.
Armed with these ten tried and tested tactics, there is no reason why you cannot significantly improve your cross-selling success rate too.
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