I’ve had a busy weekend adding a proper online store to my website. With every product I add one question arises:
“Should I cross-sell or up-sell any other of my products or is that too pushy?”
Cross-selling consists of offering related products and services to your existing customers based on current or former purchasing history. Cross-selling to existing clients is an excellent way to increase your bottom line but like with anything where you try to increase revenue, there are risks. However, with risk can come great reward, too. Ultimately, it’s up to you to understand the pros and cons of cross-selling before you implement it within your business model as part of your sales funnel.
Definition of Cross selling at Businessdictionary.com
Encouraging a customer who buys a product (gasoline, for example) to buy a related or complementary product (engine oil, for example). Cross-selling is generally illegal if there is a tie-in between the two products; where the customer must buy one in order to buy the other.
It may take time to determine whether your customer base is accepting of your cross-selling tactics or whether they’re turned off by it and move on to other businesses. When attempting cross-selling, be sure that your offerings don’t water down your own brand. If you want to be known as the best place to go for gardening advice, for example, be careful how far out of the gardening realm you travel as you offer additional items that relate to the products your customers are purchasing.
An undeniable pro to cross-selling is that it generates increased sales. People tend to buy from those that they know, like and trust, and if they’ve already purchased from you and had a successful experience they’re likely to do it again. In addition, even if you do the cross-sell right at checkout, they’ve already made a choice to purchase from you, so they’re likely to add on something else if it’s within their means and you recommended the right product.
That brings up a tremendous con of cross-selling. If you recommend confusing products and services to your customers, they may not understand and they might get irritated. Let’s say that you customer has already purchased the item you’re recommending. He or she might feel offended and annoyed that you don’t know what they’ve already purchased and that you are now recommending something completely different. They may view the cross-sell as just an additional money grab in that case.
Items that you choose to recommend should solve your customers’ problems and benefit them, not just you in terms of generating revenue. Ensure that the products that you offer are truly complementary products and services, and not competing products and services.
A good example of a complementary product to an information product about “How to Lose Weight” would be to offer them a pedometer, a water bottle or both as a cross-sell. These items will be talked about in the book, so it makes sense to offer them to the buyer. A bad cross-sell would be to offer other diet books. They’ve already chosen the one they want to buy; don’t confuse them by offer them competing books.
Another example that would work well is if you sell handmade baby clothes. You’ve sold a nice outfit to the customer and you have more items that match that outfit, like matching shoes or a hat. These items, while not technically complementary items, are in the same family because they match the items that were being bought to start with. Recommending these matching items is a great way to encourage your clients to buy more without turning them off.
The trick to avoiding the cons of cross selling is to be very clear about what your target audience needs to solve their problems, and to have the right technology in place to recommend the correct items based on their purchasing and searching habits.
Be sure that your cross-selling tactics don’t come off as “bait and switch” by offering your customers a totally different high priced item instead of the one they wanted. Put the client first and foremost in all your decisions when it comes to cross-selling.