What Is Cross Selling: Definition, Examples, and Ultimate Guide
The deal appears to have gone south. However, the prospect still matches your ideal customer profile, so you keep following up.
An email. A call. Rinse and repeat every week.
After a few months, you close the sale. You’re thrilled. But then, it gets even better—your CRM reveals a cross-selling opportunity.
Now you’re really happy. You can solve additional problems for this customer, and crush your sales goals.
As per a 2020 McKinsey study, cross-selling and category-penetration techniques can increase sales by 20 percent, and profits by 30 percent.
If you offer complementary products and services for your existing customers, you need to leverage cross-selling techniques. Otherwise, you’re leaving money on the table.
In this article, we’ll talk about effective cross-selling strategies and how to train your sales team to crush the cross-sell. Let’s begin with the basics.
What Is Cross-Selling?
For instance, ecommerce retailers like Amazon frequently show related products on the product page you’re browsing. They may also present complementary items during the checkout process. Here’s an example:
However, even SaaS companies (and other types of businesses) can leverage this sales technique. You simply need to present relevant products, or offer additional functionalities, to your existing customers.
Benefits of Cross-Selling
When done with a customer-focused mindset, cross-selling can benefit your company in the following ways:
Improve your customer’s experience: In an ideal cross-selling scenario, your personalized product suggestion meets your customer at the exact moment they’re facing a related problem. The offer also reaches them through the marketing channel of their choice, in a manner that resonates. The purchase of the add-on product helps them to solve the pain point, which makes for a delightful brand experience.
Increase brand loyalty: As consumers buy more items from your product suite, you integrate more deeply into their lifestyles. If your products offer a great user experience, it improves customer satisfaction and makes customers more likely to stick with your brand.
For example, look at the convenience and functionalities that the Apple ecosystem offers. Its portfolio of products, though expensive, complement each other seamlessly and thus improve customer retention.
Generate more revenue: The cybersecurity company Bitdefender tripled its conversion rates by integrating cross-selling offers on its “Thank You” page. Their average order value (AOV) also jumped by 12 percent. Cross-selling, when effective, can increase your sales and lifetime customer value (CLTV).
The Downsides of Cross-Selling
If done aggressively, your customers may find cross-selling to be a self-serving sales tactic, designed to squeeze money out of them. Here are the disadvantages you need to be aware of:
It can turn off your customers: If your product recommendations are irrelevant to your customer’s initial purchase, they might feel annoyed and misunderstood. Instead of buying more of your products, they may abandon your brand altogether.
It can attract unprofitable customers: Many ecommerce companies entice their current customers to buy more from their product catalog with discount codes. In theory, such incentives make sense—selling more to existing customers is cheaper than acquiring new customers.
However, one in five cross-buying customers turn out to be unprofitable. So, before launching your next cross-selling campaign, profile your non-ideal customers. You don’t want this to be a bad fit.
Cross-Selling Vs. Upselling
The main difference between cross-selling and upselling concerns the buying offers you make to your customers. When cross-selling, you recommend a complimentary product or service to an existing customer or prospect. When upselling, you encourage the shopper to buy a superior and more expensive version of the product they are already considering.
An example of upselling is a company trying to sell additional seats for their CRM tool—or even an upgrade of the subscription package. In this context, cross-selling would involve selling email marketing, or another functionality, to this CRM customer.
Both these techniques contribute to elevating the customer's lifetime value, paralleling the essence of optimizing total contract value for businesses.
Cross-Selling Best Practices for SaaS Brands
Want to implement a cross-selling strategy for your SaaS company? Here are some best practices to keep in mind.
Personalization Is Key
Remember: You want to create a mutually-beneficial partnership with your customers. So, make cross-selling product recommendations that add value to their business. Work to understand their current goals and create personalized offers that improve customer satisfaction.
If you get greedy trying to squeeze as much revenue as possible, you’ll spoil the customer experience and poison the relationship.
Get Creative with Pricing
What was the price of the initial purchase? When cross-selling, the related items should ideally be cheaper. However, feel free to get creative with your pricing strategy. For instance, you can incentivize the usage of a new feature by proposing a special launch price for a limited period (we’ll look at an example shortly).
You can bundle related products and offer these at a special price. Alternatively, consider partnerships with other brands that offer products that complement yours.
Listen to Your Customers
Take stock of your customer’s post-purchase behavior through tools like Google Analytics and your CRM. Set up Google alerts for your customers’ brand names. Keep track of their challenges with your customer success team. Existing customers may be ready for your cross-selling offer sooner than expected, so pay attention and listen attentively.
3 Examples of Effective Cross-Selling
Here are three real-world examples of B2B and SaaS companies leveraging cross-selling to drive revenue and better serve their customers.
Buzzsprout is a cloud-based podcast hosting solution. I bought their beginner plan for my marketing agency’s show.
When I uploaded the second podcast episode on Buzzsprout, I got a prompt to try out their "Magic Mastering" feature for free. The company describes it as an “Instagram filter for audio.” I tried it out, and was impressed when listening to a crisper version of my podcast. Later, I received a follow-up email with a prompt to upgrade to Magic Mastering.
As you’ll see on their pricing page, this feature is available on all of their paid plans—but as an add-on, with an extra cost. Because many podcasters will be able to avoid expensive and cumbersome sound editing with "Magic Mastering," they won’t mind spending a few extra dollars per month to use the feature.
2. Adobe Creative Cloud
Next, we have Adobe cross-selling its product suite as a bundle. When I signed up for Adobe Stock (a stock images subscription), I started receiving educational emails about how I could use other products in the Adobe Creative Cloud suite, such as Photoshop.
Several days later, I was prompted with an offer to buy the entire bundle of “20+ Apps of Adobe Creative Cloud” at a 40 percent discount.
I also received a follow-up offer during their 11-11 shopping event to purchase the above bundle at a whopping 70 percent discount.
However, be careful with offering steep product discounts. You might damage customer relationships if people find out they paid way more for your bundle than people who purchased during the recent festival offer.
Also, you’re selling value, right? Discounts can cheapen your product/service, and your value prop.
What started as a course-building platform, Kajabi now releases a variety of new tools for its audience of creators. For example, the company released its podcast management feature by telling its audience that “more than half the population in the United States listens to podcasts:”
They continue the email offer with the option to launch and monetize a public or private podcast.
Finally, they sweeten the deal by offering a "rare" discount—an easy one-time payment of $99 to access the platform for three months.
Note that Kajabi also upsells with a higher number of products offered in its more expensive plans.
Can you see how the special, limited-time offer will incentivize the product purchase? FOMO is real, people. Take advantage of it when cross-selling with unique pricing opportunities, or limited-edition features.
5 Ways to Train Your Sales Team for the Cross-Sell
Cross-selling presents a distinct challenge for your sales department. It requires different techniques than those used to persuade new prospects. Here are a few strategies to make it work.
1. Refine Your Understanding of the Customer
A sound cross-selling strategy focuses on keeping your campaign relevant to customers at all times. To do this, you must keep tabs on your customers' evolving needs and pain points. Your CRM and analytics tools offer a wealth of customer insights. Also, contact your customer success team to enhance your understanding.
You can also consider creating customer segments based on your customers’ buying history, pain points, and buying preferences. Then, make personalized offers for each segment.
2. Map Your Customers’ Journey
You want the cross-sell to land in your customer’s inbox when they’re most likely to need it. To nail the timing and messaging, map your customer journey.
What are the common challenges your customers experience once they use your product? Recognize their pain points at every stage and—when relevant—interject the customer journey with cross-selling offers that highlight how the new product will solve the problem.
Generally speaking, you want to give your customers sufficient time to settle in and experience value from their current purchase before you pitch another product. However, if you have an add-on feature that may solve a key customer pain point early in their journey, suggest it right away.
For example, Buzzsprout offered me a free sample of their audio editing add-on feature as soon as I uploaded my second episode.
3. Encourage Reps to Call Customers (+ Cross-Selling Sales Script)
Many sales professionals dread calling customers. What if they are unsatisfied with your product? Approach these scenarios as opportunities to practice your soft skills and rebuild relationships.
To reduce anxiety, create a sales script. It will provide structure to your calls and help build rapport with prospects. Here are the elements to include:
- Introduction, and check in on their current purchase: Help the customer recall your business and the product they bought from you. Then, enquire how they’re doing with their initial purchase.
“Hi [Customer Name], I’m [Your Name] calling from [Your Company]. How are you doing?
Great. I’m calling to review how you like [Your Product] so far…Can I help with anything?”
- Ask questions about pain points: Once the customer is re-familiarized with your brand, transition to questions about the problems your complementary product solves.
“How do you manage [pain point 1] right now? Do you find [pain point 2] challenging?”
- Share your understanding: Now, talk about your other customers who have experienced similar problems.
“Interesting. Many of our customers also experienced [pain point 1, 2, or 3].”
- Introduce your complementary product as a solution: It’s time to highlight the key benefits of your add-on product, differentiate it from your competitors, and share the success stories of customers who also benefited from it.
“We built [Your Product’s Name]. It comes with [Feature 1] that lets you [Benefit 1]. It also has [Feature 2], which offers [Benefit 2].
It’s already helped [Customer 1] achieve [impressive results here].”
- Close the call: Conclude with a request that they sign up for your product, schedule a demo, or book another call.
“It seems like [Your Add-on Product] may add a lot of value for [Their Business]. Do you want to try [Your Product]? If you’re short on time right now, we can set up a demo for later this week. When’s a good time?”
4. Level up Your Cross-Selling Training
Cross-selling to existing customers presents unique challenges that require a distinct skill set, setting it apart from outbound sales. Elevating these skills can be achieved through targeted outbound sales tools and comprehensive sales training activities. Here are several sales training activities that can help develop these skills:
Role Reversal Scenarios
Remember the cross-selling template you just created? It’s time to test it out. Ask your colleagues to behave as potential buyers and to list arguments in response to the script.
Once you have the list of objections, have your sales reps prepare strong counterarguments. A role reversal like this will train your team members to handle various challenging scenarios.
Jump on Sales Calls with Reps (Even Remotely!)
Sales managers and leaders can shorten the learning curve for new sales hires by partnering remotely on their calls. With sales tools like Close (which features call coaching), you can offer real-time feedback to your representatives, or listen back to recorded calls and identify areas in need of improvement.
Create a "Common Objections" Repository
To handle future objections more effectively, salespeople can add the new objections they encounter to a central database. Other sales employees can go to the database and practice generating a list of counterarguments. This way, the database will evolve as an aggregated knowledge base. New sales hires can refer to it, and are quickly brought up to speed.
5. Regularly Conduct Product Education Sessions (for Your Team)
Is your team aware of the new products and services your company launches? If they don’t understand the new features, your reps will fumble when selling them. To provide a consistent customer experience, and to sell better, organize regular product training sessions for your sales, customer success, operations, and marketing teams.
In these sessions, cover: the use cases of the product, the customer profiles it’s best suited for, its key benefits, and potential ROI. With well-informed knowledge of the latest functionalities, your reps can better answer customer questions and effectively cross-sell your new products.
Evaluate Your Cross-Selling Success with These Metrics
When successful, cross-selling delights your customers and improves customer loyalty. We’ve already looked at strategies and real-world examples of cross-selling. But how can you evaluate the efficacy of your efforts? Here are a few metrics to track that will help you identify areas for improvement.
- Cross-sell rate: The percentage of cross-sell offers that convert to a sale. If it’s low, your team is likely selling the wrong products, or selling them at a bad time in the customer journey.
- Attach rate: The percentage of the total units of your secondary product sold against the first product. A high attach rate indicates that your customers enjoy buying complementary products from you.
- Average order value (AOV): The average dollar amount of each customer's purchase. If the value increases, it indicates your customers are buying more of your products and services. If your cross-selling efforts are effective, it will also lead to repeat purchases and improve your customer lifetime value (CLTV).
Remember that your CRM can offer a wealth of customer insights. So, choose wisely. Close records all of your customer interactions—right from first touchpoint—and gives you actionable metrics to guide your sales strategy. Ready to test out the CRM built for SMBs?