Cross-Selling: Definition, Benefits, Examples & How to Do It

What is Cross-Selling?

Have you ever encountered a cashier persuading you to buy additional products as a complement to your initial purchase? This occurrence is known as cross-selling.

Cross-selling is a marketing technique performed by offering additional products or services to maximize sales. The supplementary products or services offered usually have a connection to the main product purchased by the customer.

For example, if a customer buys a mobile phone, one of the cross-selling examples could be offering a suitable case to protect that phone.

You may have unconsciously encountered this marketing phenomenon around you, such as in retail stores, supermarkets, and even in online buying and selling activities.

In addition to increasing revenue per transaction, this technique also strengthens the relationship between the seller and the customer. 

With such a strategy, customers will perceive your business as capable of providing more comprehensive solutions beyond their initial needs.

Upselling and Cross-Selling, What’s the Difference

Upselling and cross-selling are two marketing techniques that are both beneficial and proven to maximize sales.

The main difference between them lies in the focus of the offers provided to customers.

While cross-sell focuses on offering additional products/services, up-selling is more focused on offering products or services that are more expensive or advanced to customers who have already made a purchase. 

The goal of up-selling is to increase the transaction value by encouraging customers to choose a more premium or comprehensive option.

For example, if a customer is buying digital camera A, up-selling can be done by offering camera model B with more varied features, significantly better image quality, and, of course, at a higher price.

Cross-Selling Benefits

Now that you know about the definition and examples, it's time to review the benefits of this marketing strategy for various business niches.

In B2B businesses, this can be a clever strategy to increase Customer Lifetime Value (CLV). Other benefits include:

• Maximizing revenue as a single consumer purchases more than their initial goal.
• Maximizing customer experience as customers feel their needs are understood by the seller.
• Improving customer retention and loyalty because customers find shopping more convenient.
• Maximizing product referrals.
• Optimizing the supply chain and operational inventory for products/services.

The Disadvantages

It's important to note that, like other marketing strategies, this strategy also has some disadvantages. 

According to a Harvard Business Review study (2012), some customers may feel pressured when this strategy is haphazardly implemented.

Therefore, before employing this strategy, it's crucial to analyze customer data and metrics.

Businesses need to evaluate which customer segments have the potential to generate significant sales without compromising overall profitability, and which customers might be better served with a different method.

Cross-Selling Examples

To further master this marketing technique, consider the following examples as a reference for your business.

Examples for Conventional Businesses

Restaurants and Cafés: By offering complete meal packages that include main dishes, drinks, and perhaps desserts at a more economical price than buying them separately.

Clothing Stores: Retail clothing businesses can implement this technique by offering complementary accessories such as jewelry, shoes, or bags that match the clothing purchased by the customer.

Examples for Online Business

E-commerce: This strategy can be implemented by displaying additional or related products on the checkout page. For example, if someone buys a camera, the e-commerce site can suggest buying a tripod or camera bag at the same time.

Streaming Services: Video streaming platforms can apply this method by offering packages that include music subscriptions or premium content subscriptions at a more friendly price.

Effective Cross-Selling Tips for Businesses

If you already understand the strategy and currently planning to implement it further, you can follow these cross-selling tips below:

1. Offer Discounts for Multiple Purchases

All customers love discounts! Therefore, you can maximize sales potential by promising a price reduction or cashback if customers decide to buy additional products. 

However, ensure that the discount is significant enough for customers to feel a real added value.

2. Understand Customers and Their Needs

It is highly crucial for business to understand customers and their needs before employing this method. 

You need to analyze customer data, purchasing behavior, and preferences to tailor more personal and relevant offers.

3. Use UGC (User Generated Content)

Testimonials, reviews, or customer images showcasing their satisfaction can build trust and interest from other potential customers. 

Therefore, you need to integrate UGC into your marketing strategy through your website, social media, or email marketing (newsletter).

4. Offer Products Based on Recommendations

After you understand your customer preferences, you can enhance sales potential by recommending additional products based on personal experience or best-selling products.

Other Methods & Techniques

Here are some common techniques that are frequently implemented by various business niches:

• Offering additional product recommendations based on previous purchases.
• Providing discounts and free shipping if customers increase their purchase quantity.
• Leveraging similar interests, such as "Other customers also bought..."
• Using bundling so that customers don't just buy one product/service.
• Promising loyalty rewards for customers who make purchases exceeding a certain amount.