Have you ever ordered something from Amazon and noticed other options in the “Customers Who Bought This Item Also Bought” section? The general idea is that a person looking for a $120 smartphone may not readily buy a $520 phone, but will appreciate a combo deal on a screen guard, protector case and MicroSD card as complementary items.
When you try to push a higher value product, it is known as upselling. When you instead, focus on selling interrelated products that the customer might eventually need, it is known as cross selling. This pictorial depicts the difference between cross selling and upselling.
Cross Selling as a Revenue Maximizer
Cross selling is one of the most used sales techniques in e-commerce, insurance, retail, fashion, electronics, etc. Almost everywhere you go, from McDonalds to your local bank, you will see sales rep trying to sell something very subtly. Think, “Would you like fries with that?”
Think of cross selling as things that go in pairs: bread and butter, flash lights and batteries, fish and chips, burger and fries, paper and paper clips, wine and cheese – now imagine the revenue that comes from the significant other of these pairs.
Cross selling is spreading like wildfire and the latest trend is cross promotion. People are using this channel to spread a word about their product and the concept has taken off wildly everywhere from social media to blogging through to link exchange.
Internet forums and social bookmarking sites are leading platforms for cross promotion. Content posted on a blog is quickly promoted using StumbleUpon, Facebook, Twitter, LinkedIn and Pinterest. This cross promotion across social media sites can bring in more views per article/post.
Also, we see many B2B websites inviting guest bloggers to write for them. The main benefit is infusion of freshness in the blog by partaking in new ideas. Another benefit is getting a chance to do the same on that writer’s blog and getting a chance to present your product or service to a totally new audience.
Back in 2013, YouTube introduced cross promotion feature to make content discovery easy. Websites like TapJoy and ChartBoost provide mobile app cross promotion services.
Cross selling is an effective way to increase a sale, but there are some disadvantages too. For instance, if a person comes to an electronics shop ready to buy a DVD player, unsure of which is the best model, showing him all the accessories that go with the player might add to his confusion. However, if you use upselling techniques and convince him to buy the latest BluRay player, you not only end up selling a higher-end product but also guiding the customer in the right direction.
Another thing you must remember is that by cross selling, you are cutting down your customer’s spending limit. For instance, if a customer who originally thought to buy a $40 flashlight suddenly sees an offer on bulk pack of batteries at $11, he may end up buying a $30 flashlight instead. If he hadn’t seen this deal, he might have continued with his purchase then added the batteries to his cart as an afterthought.
Also, cross selling leads to a lot of customer service demand. Let’s say a person came to buy a car stereo from an automobile store. Before he checked out, he had reverse parking assist, motion sensors, Bluetooth, the works. Instantly, he becomes a valued customer and demands superior service. Failure to deliver that kind of service can lead to disappointment and alienate your customer.
Harvard Business Review deflated the boom of cross selling in 2012 saying neither cross selling nor upselling is a guaranteed plan to keep your customer happy. According to HBR, smart selling – which combines the use of both in a “smart” way – is the way forward.
Thus we conclude that while link exchange and cross promotion through social media are safe bets, more pronounced cross selling in brick-and-mortar and online stores should be done smartly.
Vivek Patel is a Local Search Specialist at E2M, one of the fastest growing digital marketing agencies based in India. He covers local search optimization, organic search tactics and social media marketing. Follow him on Twitter at @VivekRPatel.
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