Cross-Selling

Cross-Selling is the process of selling additional products or services to a customer to increase the value of a sale. It encourages the customer to buy more: for example, when buying a cellular phone, the retailer may also suggest you get the phone case. In e-commerce cross-selling is common practice: complementary items are suggested on the product pages, in the shopping cart or during the checkout process. You may also get emails after the sale with suggestions of additional products that would complement your order.

How Cross-Selling Works

Cross-selling to existing clients is one of the primary methods of generating new revenue for many businesses, including financial advisors. This is perhaps one of the easiest ways to grow their business, as they have already established a relationship with the client and are familiar with their needs and objectives.

However, advisors need to be careful when they use this strategy—a money manager who cross-sells a mutual fund that invests in a different sector can be a good way for the client to diversify their portfolio. But an advisor who tries to sell a client a mortgage or other product that is outside the advisor’s scope of knowledge can lead to problems in many cases.

If done efficiently, cross-selling can translate into significant profits for stockbrokers, insurance agents, and financial planners. Licensed income tax preparers can offer insurance and investment products to their tax clients, and this is among the easiest of all sales to make. Effective cross-selling is a good business practice and is a useful financial planning strategy, as well.

Cross-Selling Best Practices

Best practices for cross-selling success include:

• Recommend the accessory required for proper operation or use of the product purchased, such as a power cord for a computer printer that doesn’t include one in the box.
• Bundle related products so the customer doesn’t need to look for necessary components or accessories.

Offer a discounted price on a bundled product offer to encourage immediate purchase with a temporary price savings.

• Demonstrate how the additional products work with the product being purchased.
• Make it easy for the customer to say “yes” by addressing potential customer objections in the cross-sell conversation. For example, a waiter showing diners the dessert tray can overcome, “I shouldn’t” by suggesting that diners share a dessert.

Cross-selling in the ecommerce environment involves identifying related products and creating appropriate offers while in-person cross-selling could require training in effective approaches. In both cases, though, the goal is to make more money for the company while creating a satisfied customer.