What Does Cross-Sell Mean?
A cross-sell is the sale of an additional product or service that is related to the primary purchase that a customer or client makes. Perhaps the most well-known example of cross-selling is the fast-food sales line, “Do you want fries with that?”, encouraging the customer to purchase French fries in addition to the main course of their meal.
Cross-selling occurs across all industries and at both the wholesale and retail levels. Selling additional products to an existing customer is usually much easier than acquiring a new customer to purchase products. It’s a widely recognized fact that consumers tend to make purchases with the same businesses that they’ve purchased from in the past.
Cross-sells are considered one of the best and easiest methods of generating additional revenues for a business. In addition to generating more income, cross-selling may also carry the advantage of strengthening customer relationships. However, if the cross-sold product or service doesn’t enhance the value of the customer’s primary purchase, then a cross-sell may end up damaging, rather than strengthening, a company’s relationship with a customer.
The practice of cross-selling is often combined with the practice of upselling.
- A cross-sell is the sale of an additional product or service that is related to the primary purchase that a customer or client makes.
- Cross-selling offers dual benefits for a business of increased revenue and strengthened customer relationships.
- Attempts at cross-selling commonly accompany attempts to upsell a customer.
How Cross-Selling Works – Examples
Cross-selling is focused on the sale of products or services that offer additional – usually complimentary – benefits beyond what the primary product or service purchased provides. For example, at a health spa, a client purchasing a manicure might be cross-sold a pedicure.
One of the most common examples of cross-selling is the sale of additional batteries with electronic products that require them. Another common cross-sell is the sale of various accessories, such as a mouse, webcam, or laptop computer case, along with the sale of a personal computer.
Cross-sells are particularly commonplace in the financial services industry. Insurance companies routinely aim to cross-sell various types of insurance. For example, a client purchasing homeowner’s insurance might be cross-sold life insurance, disability insurance, or auto insurance. Cross-selling is such an important source of revenue for insurance companies that clients are frequently offered an inducement in the form of a discount for purchasing additional types of insurance.
Banks commonly cross-sell different types of accounts, investments, loans, or credit cards.
In online marketing, cross-selling is frequently attempted by presenting products related to a customer’s selected purchase during the process of checking out. One or more related products are presented below or alongside a customer’s already selected item, and all that customer needs to do is check a box to add the cross-sold product(s) to their order.
Cross-Selling vs. Upselling
Cross-selling and upselling are closely related, and both are commonly practiced by businesses. However, there is a simple, distinct difference between the two practices.
Cross-selling, as previously noted, is the sale of products or services that are considered complementary to a primary product that a customer is purchasing or has already purchased. In contrast, upselling refers to the sale of an upscaled, more expensive version of a product or service that a customer intends to purchase.
For example, a customer in an electronics store selects a television to buy. A salesman then points out that for “X” amount of more money – usually stressing the fact that it’s only a little bit more expensive – they can buy a higher-end television model from the same manufacturer that offers better picture quality and additional desirable features.
The attempt to upsell the customer into purchasing a more expensive product is likely also accompanied by attempts to make cross-sells, such as an enhanced TV sound system.
Both cross-sells and upselling share the same objectives:
- Provide the customer or client with enhanced value
- Increase revenue for the business
- Strengthen customer relationships and brand loyalty
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