You should be dedicating resources to encouraging each new and existing customer to increase their spending. If not, you’re missing out on a play that can deliver exponential returns.
Recommending additional products or services can help customers solve problems while upping their investment. This will improve customer lifetime value (CLTV), making customer acquisition costs (CAC) healthier.
It’s called cross-selling; a tactic that drives 35% of sales for Amazon and helps leading SaaS companies reduce churn.
In this post, we’ll show how to put it into practice by breaking down examples of cross-selling done well.
What is cross-selling?
Cross-selling is recommending additional, complementary products or services to increase the sale value or boost CLTV. It’s an effective way of getting people to spend more on top of what’s already been, or will be, purchased.
Cross-selling is something you’ll be familiar with. For example, a fast-food restaurant employee asking if you’d like fries with your order or a phone retailer asking if you’d like to bundle your handset with a cover.
It’s also a marketing strategy used by Amazon on every product page with its “Frequently bought together” section.
By recommending a product or service that can help further solve a problem, enhance the experience, or make customers feel more complete, Amazon encourages further spending.
From this small addition to each page, Amazon generates over a third of sales on its platform.
Cross-selling vs. upselling vs. down-selling
Upselling and down-selling are other recommendation-based sales tactics that sometimes get confused with cross-selling.
- Cross-selling recommends additional products that complement the one being bought.
- Upselling encourages buyers to upgrade to a better, more expensive version. Or purchase more of whatever they’re buying.
- Down-selling recommends a cheaper or lesser product that is more suitable to the client’s budget.
In the cell phone example, cross-selling recommends a phone case with every device. Upselling recommends upgrading to a newer, more powerful device. Down-selling recommends an existing customer who’s thinking of leaving downgrades to last year’s cheaper model.
In each case, you’re encouraging further spending. Cross-selling, however, doesn’t seek to change what customers have, but add to it.
Best practices for cross-selling
Cross-selling only works when offers benefit the customer at the moment.
If you sell bookkeeping services, for instance, offering a sales tax form filing service to a high-turnover client makes sense. But it’s unlikely to be relevant to a part-time freelancer who doesn’t meet the filing threshold.
Approach cross-selling with a good understanding of your customers and how your products fit into their lives.
1. Focus on value
Research from Optimove shows that young, fast companies derive 30% of revenues from existing customers. As those companies become more established, that increases to around 90% of revenues.
So, what does this tell us? That B2B sales are built on relationships. Cross-selling should always work to strengthen these relationships.
Ensure every recommended product helps the customer solve a problem or drive more revenue.
“When auditing a new prospect, it’s helpful to perform a white space analysis, in which you look for untapped opportunities in an account by identifying key pain points. For example, if I discover that a prospect is investing a lot of advertising dollars on radio ads but has no way to track which calls result from those ads, then I know that they could benefit from a call tracking system.”
West also uses a tactic called gray space analysis to identify areas where Revenue.io’s products can provide more value than a competitor’s:
“Suppose that the company is using a call tracking solution to track how many calls result from radio ads, but that solution doesn’t integrate well with their Salesforce.com CRM, I’ll know that there is an opportunity to provide them with a superior call tracking solution.”
Conduct qualitative research to learn about your customers and unearth the right cross-sell offers.
- Gather insights from live chat transcripts and customer service calls;
- Interview, sales and support people to find common problems;
- Run surveys to find out who customers are and what they want;
- Use competitive analysis to understand what competitors are doing.
By offering what customers have told you they want, cross-selling becomes less about trying to sell more stuff and more about bettering their experience.
2. Personalize product recommendations
Use what you learn from qualitative research to build out customer segments and map your products or services to each of them.
Think about what the preferred products or services are for each segment and how they use them. Ask yourself what extra value each segment needs.
For example, you might segment customers by organization so that the solution you offer to SMBs is better suited to their company size and budget than the solution you offer to large corporations.
Cross-selling is all about relevancy. Segmentation ensures that recommendations fit customer needs.
3. Keep it consistent
Consistency creates familiarity, which builds trust, increases customer loyalty, and boosts revenues by up to 20%. It ensures every customer sees the right messaging at every stage, from curious visitor to loyal customer.
For example, a two-person partnership probably doesn’t want to be cross-sold a demo for an enterprise-level company. But they might want to read a customer story on how you helped a small business succeed. With a case study, they may be better primed for you to sell them an add-on to help them scale.
Delivering content unique to customer needs at every interaction eliminates confusion and increases the chances of investment.
4. Track and tweak
All the research in the world can’t predict how a customer will react to your offer. It’s important to track each campaign to identify what’s working and what can be improved.
- A/B test landing pages and emails to see which copy, images, audio, CTAs, and buttons perform best. Then to see if they’re effective, ask questions like: Do certain words or colors have more of an impact?
- Do product videos increase click-through rates?
- Does adding social proof increase conversions?
Use insights from analytics to fine-tune your offers and increase their effectiveness.
Examples of effective cross-selling
While recommending the right product does some of the heavy lifting, cross-selling still requires you to convince a user to invest in something they never knew they needed until now. Here are some examples of brands that nail selling without forcing it and what you can learn from them.
The one thing customers want to know above all else is: “what’s in it for me?”
It’s not enough to present a product and list its features, you’ve got to give people a reason to care.
Kajabi highlights the benefits of podcasts from the off, with a subject line that leans into three top priorities for businesses: leads, growth, and revenue.
“Podcasts on Kajabi: A new way to connect, grow, and earn”
The first line of the email makes readers sit up and take notice:
“With more than half the population of the United States already listening to podcasts, there has never been a better time to start yours.”
For anyone unaware of the potential of podcasts, this statement makes it clear: 165 million people can’t be wrong.
Kajabi then shows readers how they can use its podcast feature to grow their business. Each one leads with a benefit that starts with an action word:
- Generate leads with a free podcast;
- Monetize your podcast;
- Distribute your podcasts;
- Import your existing podcasts into Kajabi.
Rather than listing what the platform does, readers are shown what they can do. Kajabi isn’t talking at them—it involves them.
This is a subtle, but important touch; show readers how your product makes a difference to their business, and you’re more likely to get their buy-in.
The email finishes with some reassurance. Podcasting is a bolt-on to your current products. This helps to lessen the risk. It’s easier to take a chance on a new product if it fits seamlessly with existing marketing.
To get people to care, sell the sizzle, not the steak. People buy what a product or service means. Focus on the outcome and experience of what you’re selling.
In his book, Influence: The Psychology of Persuasion, Dr. Robert B. Cialdini defines social proof as people doing what they observe other people doing.
If you’re lost going to an event and you see a crowd heading in one direction, you’re likely to follow. If you’re looking for something new to watch and a friend recommends a show on Netflix, you’re likely to give it a try.
InVision’s email starts with what Freehand helps you do. Like Kajabi, it leads with a benefit:
“InVision Freehand empowers you to work with everyone on your team from anywhere, in real time.”
This unique value proposition lets readers immediately know how the tool makes collaboration easy.
It then provides links to different case studies: one that shows how InVision’s in-house team uses the tool, and another on how Home Depot has benefited from the tool.
People trust user reviews because they have experienced the product or service. Adding the Home Depot case study alongside InVision’s use study adds credibility. If a reputable brand like Home Depot uses Freehand, it surely offers value.
Case studies are complemented by informative tips and collaboration tools that show how Freehand can fit with existing workflows.
The email finishes with a simple call-to-action that drives traffic to a simple form, with additional social proof from a top brand for good measure.
Make the most of social proof. Displaying a logo or case study from a big-name client conveys authority and credibility, reducing the risk for customers on the fence.
Don’t reserve personalization for existing customers and those you have data on. Make it count from the very first touchpoint.
Take this landing page for a writing desk.
I clicked through to this page from Google, having never previously visited the Target website. They know nothing about me as a person, but they know what I might like based on other customers who have bought the same desk.
They also know that if you’re buying one piece of furniture, the chances are you’ll want to accessorize.
Like Amazon, Target uses a “Frequently bought together” section that shows products other customers purchase. This includes the option to add items to the shopping cart with a click of a button and quickly uncheck items that aren’t required.
Below are Pinterest-like inspiration boards that encourage me to build a complete set. Clicking on each board brings up a product list that lets me quickly add each item to my cart.
And the cross-selling doesn’t stop there. “Frequently also added” items also feature in the cart.
Not all of these are relevant products, but they all complement the desk and one or two caught my eye. This validates Target’s approach. Even checking out with one extra item in the cart increases the value of the sale.
If you have collections or sets that complement the main item, don’t be afraid to use multiple cross-sales techniques on your product landing pages.
Make it easy for customers to add to their purchase, but don’t force it. Target’s cross-selling works because it doesn’t hamper the customer experience.
While the B2B sales process is often more complex in organizations with multiple decision-makers, if you’re selling to businesses with a sole director, playing to impulses can be an effective tactic. And one of the best ways to encourage an impulse sale? Bundling related items.
B2B buyers engage in an average of 27 interactions with a vendor before making a purchase decision, Forrester research shows. The majority of these interactions are self-guided from sources including social media, syndicated content, and industry-specific resources.
To secure a sale, you have to show up where your audience is looking for information. Retargeting lets you do this. By following people around their internet journeys, you can tempt them back to your website.
In this sense, cross-selling gives people a reason to revisit.
For example, someone might have left your website because they were unable to find exactly what they were looking for. Bringing them back to look at something similar might convince them to convert, which opens up the door to new cross-selling opportunities.
As this is a retargeting ad, those who see it are already familiar with HubSpot. This makes the use of “Free” less of a risk and more of a tempting offer. It removes the barrier of cost and handing over credit card details.
The offer also helps the customer solve a problem. Templates are easy to use with existing software and there’s enough choice to find something suitable.
When users click through to the landing page, they’re shown what they can achieve with the templates. HubSpot answers questions to alleviate fears and uses social proof to build trust and secure conversions.
Retargeting is a proven way to increase conversions. Use lead magnets as a cross-selling tactic to earn consideration from buyers who are researching their options. Once you’ve captured their details, use cross-selling to draw attention to your products.
B2C or B2B, all marketing is people talking to people. It’s not the business you need to convince your product is the best—it’s the person reading or listening to what you’re saying.
Around 8 in 10 respondents to Drift’s State of Conversational Marketing report say they use conversational marketing. Of those respondents, 99% say it’s valuable to highly valuable.
Conversational marketing works because it personalizes the customer experience. It makes customers feel more valued, which increases their loyalty.
SitePoint’s emailing marketing is a great example of how to use conversational copywriting to cross-sell to new users.
From the greeting, users are put at ease. The formatting looks like a standard email, rather than a template. Starting with a casual “Hey there” instead of a more formal “Dear” gives the sense that it’s written by a friend. The tone is also consistent with the chatty copy SitePoint uses on its website.
The SitePoint team uses a combination of flattery (“Clearly you have impeccable taste in email newsletters”) and humor (“While you’re in the signing-up-for-things-mood”) to endear themselves to customers.
In a single paragraph, the email explains the benefits of the Versioning newsletter: readers can get all the information they need in a single email, saving them time.
It ends with some subtle social proof: “We really like it, and other people do too.”
Sometimes, less is more. SitePoint’s email works because it looks and sounds like a recommendation from a friend.
Think about how you would chat to a customer if you were meeting for a coffee. Bring that easy-going side into your marketing.
6. Barnes & Noble
While a relevant cross-selling offer will pique interest, there’s no guarantee it will result in a sale.
Barnes & Noble understands this and incentivizes spending in two ways.
First, it creates urgency. By announcing that its 15% off discount “expires soon” in its email it appeals to customers’ fear of missing out (FOMO), pushing them to act quickly. It’s a tactic that helped Venture Harbour founder Marcus Taylor increase sales by 332%.
Second, it influences how much people spend by introducing threshold cross-selling. By offering free shipping on orders of $35+, complementary items are used to encourage people to buy more items.
It’s a strategy that can also be applied to discounts. For example: “get X% off on orders over $1000.”
Let’s say you sell email templates at different price points. A customer adds a $59 template to their basket but can get 10% off an order of $100. Offering related templates in their basket might tempt them to purchase additional items to grab the reduced price. They get a good deal and you boost your average order value.
Every cross-sell offer should make the customer feel more complete. SitePoint users aren’t subscribing to the Versioning newsletter because they want more emails. They’re doing it so they can save time without missing the latest news.
When cross-selling in the checkout phase, make customers feel like those extra products improve on what they’re buying. Amazon and Target do this with their “Frequently bought together” section. Freshdesk does it with three supplementary products on its pricing page.
To convince users, Freshdesk uses powerful, persuasive language. Offering the chance to “Enhance your Freshdesk with add-ons” implies that customers who skip these options aren’t getting the full Freshdesk experience.
It’s a small touch, but it changes the cross-sell product from something customers can also buy into something they don’t want to miss out on without forcing it.
Make offers more compelling by adding persuasive words to otherwise vague sentences. Experiment with different copy and test it to find the most convincing message.
“Enhance your Freshdesk with adds ons,” for example, could also be “Supercharge your Freshdesk with adds ons,” or “Get more from your Freshdesk with these add ons.”
A cross-sell offer should never lessen the appeal of the main product, but it should add something that customers can’t resist.
Cross-selling can be a powerful tool for retention and acquisition. Getting it right lies in what you know about your customers.
Learn as much as you can about your audience. Analytics will reveal which products or services customers are most interested in, but don’t leave it to the numbers. Interview sales and service reps and conduct surveys to find out what customers want.
Once you understand who you’re selling to, you can create a segmented cross-selling strategy that pitches the right offer to the right people at the right time, and has them act on it.