Acquiring customers is expensive.
That’s why it’s so important to maximize the lifetime value of those customers.
Here’s what you will learn:
- What is cross selling?
- What are cross selling best practices?
- 3 cross selling strategies that you should start using.
Want to make more money without increasing your marketing spend?
What Is Cross Selling?
Needless to say, it also increases the lifetime value of that customer.
Cross Selling vs. Upselling
You may be wondering what’s the difference between cross selling and upselling.
- Cross selling is about offering the customer an additional item. For example, when a McDonald’s cashier asks “Would you like fries with that?”, that’s cross selling.
- Upselling is about offering the customer to upgrade the product they are about to purchase. For example, when McDonald’s cashiers used to ask “Would you like to supersize your order?”, that was upselling.
What Are the Benefits of Cross Selling?
If you feel the temptation to procrastinate on this, it may be helpful to remind yourself of the three key benefits of cross selling:
- Revenue. As we have already discussed, cross selling allows you to increase customer lifetime value, which means more revenue with the same marketing budget.
- Data. Each purchase a customer makes gives you more data about their preferences which you can then use to tailor the subsequent offers according to those preferences. That’s assuming that you are using software that has this personalization functionality.
- Behavior. One of the Robert Cialdini’s persuasion principles is called commitment and consistency. It says that we value consistency in others and want to be seen as consistent ourselves. This means that a customer who has accepted your cross sell offer is more likely to be open to future offers as well.
Now let’s take a look at some of the best practices that you should follow…
Cross Selling Best Practices
Want to be effective at cross selling?
Then you need to make sure that you implement these best practices:
It goes without saying that you can’t cross sell manually.
Well, technically, you could up to a certain point, but in practice that would be completely unsustainable.
The days when you could blast out generic sales emails to your entire customer base are long gone.
Now we all expect personalized offers because that’s what we are used to. Thanks, Amazon!
There’s no point in complaining about this. The standard has been set, now it’s up to you to meet it. Your customers want personalized offers. So that’s what you have to provide.
Don’t hesitate to invest in software that allows you to personalize cross sells based on the customer’s purchase history. It will more than pay for itself.
It’s also important to understand that just because the customer has bought something in the past doesn’t necessarily mean that they are interested in related products right now.
#4 Social Proof
Social proof is another one of Rober Cialdini’s persuasion principles. It says that when we are unsure of what to do, we look at what others do.
You can use social proof to nudge the customer towards the cross sell. Simply show them that other customers just like them have purchased this item in the past.
This can be done via “Frequently bought together” product recommendations, content such as case studies, customer testimonials, etc.
It’s safe to say that content is severely underutilized as a cross selling medium.
But with content, you can do more than that. You can tell a story. And there’s nothing more persuasive than a great story.
3 Cross Selling Strategies
#1 Product Recommendations
It’s ideal if the product recommendation is:
- Based on the customer’s browsing and purchase history.
- Complementary to the products that the customer has already added to their cart.
Of course, this isn’t always possible.
If you are dealing with a new customer, you may not have enough data to personalize the cross sell.
When that’s the case, you should present the customer with a default cross sell, something that is complementary to their current order but not necessarily personalized.
You can also cross sell through email.
When a customer buys a product, don’t hesitate to send them an email with other products they may be interested in.
Of course, this should be fully automated, since you can’t possibly send people personalized product recommendations manually.
Note that cross sell emails work especially well for subscription boxes since you can send the customer an email before you ship their box to them.
#3 Digital Products
Let’s keep it real: ecommerce is great, but ecommerce margins… Not so much. Especially when you compare them to the margins of digital products.
But who says that you can’t have an ecommerce business where you sell both physical and digital products?
In fact, offering a digital product to the customer as they are about to check out can significantly increase your revenue, provided that the digital product is complementary to whatever the customer has in their cart.
Let’s say that you sell makeup.
Why not create video tutorials where you show exactly how to apply that makeup?
You can then offer those tutorials as a cross sell for an affordable price that customers won’t be able to resist (say, $7).
This will immediately boost your revenue. Remember, digital product margins are crazy high, so you will be able to keep most of those $7. It can add up to a lot of money over an extended period of time.
Let’s say you sell stationery.
When a customer decides to purchase a yearly planner from you, you can offer them an ebook that explains how to accomplish more this year.
You can price the ebook at $7 as well. It’s a price point that’s low enough to be an impulse buy that the customer won’t feel the need to think about.
You can also take this to the next level by adding social proof. Gather testimonials from the customers who have purchased your digital products, then use those testimonials in your cross sell sales pitch.
That way, the combination of relevance + low price point + social proof will make your offer irresistible.
It primarily uses two cross-selling strategies:
- In-store product recommendations.
- Email products recommendations.
Let’s take a closer look at both of them…
In-Store Product Recommendations
If you open a product page for the classic Eric Ries’ book “Lean Startup”, you may be informed that it’s often bought together with Peter Thiel’s “Zero to One” and Simon Sinek’s “Start With the Why”.
This makes perfect sense given that someone who’s interested in “Lean Startup” is also likely to be interested in other business books.
Note how Amazon not only presents you with cross sell offers, but also makes it super easy to buy them.
All the boxes are pre-checked, the price is already calculated, the “Add all three to Basket” button is right there. All you need to do is click on it.
Remember that you want to make it as easy as possible for the customer to say “Yes” to your cross sell offer.
Email Product Recommendations
They send customers emails based on their browsing and purchase history that feature products that the customer may find interesting.
Sometimes it’s just one product, sometimes it’s a list of products. But it’s always relevant to the customer.
For example, if you browse the thriller section, you might get a message with a book recommendation like this:
Note how it includes:
Also, pay attention to this line:
“Based on your recent activity, we thought you might be interested in this.”
This is a great way to position the message as a friendly book recommendation as opposed to a sales email.
Plus, when you include a line like this, you come across as more respectful, which is important in a time when everyone is overwhelmed by the sales pitches they get via email.
Can a Small Business Afford This?
What you need is:
- An ecommerce platform with product recommendation functionality.
- An email marketing software with product recommendation functionality. It’s best to use software designed specifically for ecommerce businesses.
So yes, you can afford it.
Think about how difficult it is to acquire a customer.
Let’s say that your primary customer acquisition channel is ads:
- You need to create an ad that catches the attention of a potential customer.
- Then you need to get them to click through to your website.
- Then you need to get them to stay on your website long enough to look around and find something they like.
- Then you need to get them to add the item they like to the shopping cart.
- Then you need to get them to actually finalize the purchase instead of abandoning their shopping cart.
Seriously, even writing all this out is tedious.
But the point is…
When you have put all that effort to get the customer to the point of making the purchase, why wouldn’t you want to do everything you can to maximize the order value?
And why wouldn’t you want to then do everything you can to maximize the customer lifetime value as well?