According to studies, offering your customers additional products or services is 60% to 70% likely to lead to a purchase. With the help of the sales strategy of cross-selling, you can successfully implement this in your online store and boost your sales through additional sales.
In this article, we will first explain what cross-selling is all about. We then provide clear examples of cross-selling products and tell you how you can exploit the potential of this tactic.
Are you using Shopify or Shopify Plus and could use professional support for the implementation of cross-selling in your store? Then feel free to contact us and we'll be happy to provide you with advice and support.
Table of contents
- Cross Selling Definition: What is Cross Selling?
- What are the goals of cross-selling?
- Cross-Selling: Advantages and disadvantages
- 5 examples of cross-selling from practice
- 10 tips: How to successfully implement cross-selling in the store
- Why cross-selling is an effective lever in SEO
- Opportunities of cross-selling in online marketing
- Upselling Definition
- Cross selling vs. upselling: the differences
Cross Selling Definition: What is Cross Selling?
Cross-selling is when a customer has already purchased a product or service - or is only interested in it - and is offered related or complementary items or services based on this. In short, cross-selling is the sale of matching products to existing customers. For a better understanding, you will find illustrative cross-selling examples further down in the article.
What are the goals of cross-selling?
The main goal of cross-selling is obvious: to increase the average order value (AOV), customer lifetime value (CLV), and therefore sales. This is done by showing a customer other goods or services that might meet their needs. Often, these products are additions to the items viewed or already purchased (e.g., a smartphone case if a smartphone was previously purchased or viewed). However, products from a completely different category can also be presented. The basis for successful cross-selling is that customers who have already purchased from a company are often willing to buy additional items there. Therefore, it is mainly existing customers who are reactivated, but cross-selling also includes new customers. As a result, this tactic is often also part of customer relationship management (CRM).
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Cross-Selling: Advantages and disadvantages
In the following, we will discuss the opportunities of cross-selling. At the same time, of course, we do not want to conceal possible challenges from you.
The greatest advantage of selling cross-selling products is that only low acquisition costs are required for this, as customers have usually already purchased the product or service or at least shown interest in it. For existing customers, there is often an additional plus point, namely that close customer loyalty and trust in the company have been generated by purchases already made, so that customers are generally more willing to spend more.
Based on the purchases already made or the customer's purchase intention (based on the shopping cart) and the evaluation of personal data, the likelihood of further purchasing behavior can be derived in advance and the product can be advertised in a targeted manner. Further advantages result from the goals already mentioned, such as increasing profits and sales or selling the peripheral assortment over the main assortment and vice versa. By the way: In some cases, cross-selling can even lead to changes in the assortment structure, so that the marginal assortment becomes the main business, for example.
This is how Latori client Shape Republic successfully implements its cross-selling strategy.
Cross-selling strategies can also backfire if the suggested products and services have not been adequately researched or strategically positioned. Customers may view the retailer's recommendations as unnecessary or even annoying. With poor planning, companies not only fail to generate additional sales, but at worst lose existing customer relationships.
Reading tip: Here we explain why loyalty points in online stores could become your best marketing tool.
5 examples of cross-selling from practice
Cross-selling in the shopping cart of Latori customer SHEKO.
Whether in brick-and-mortar retail or online, there are countless cross-selling examples every day, such as:
Car dealers also offer, for example, car insurance, additional winter tires or car financing to go with the vehicles.
In the supermarket, customers can find changing items every few days from technology, clothing, toys, textiles, furniture and more.
Gas stations offer not only the possibility to refuel, but also magazines, sweets, snacks and many items for daily use.
Pharmacies sell not only medications but also personal care products.
Online retailers recommend additional, similar or complementary products to selected items at various points in the sales funnel.
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10 tips: How to successfully implement cross-selling in the store
Cross-selling can be particularly profitable for online retailers, as purchase decisions are often made within seconds on the Internet and purchases are made with just one click.
Cross-selling in online stores is usually implemented with the help of artificial intelligence (AI), which is already integrated into some store systems. Depending on the platform used, there are these basic technical options:
The online store operators define keywords for the various articles. With the help of these keywords, products are filtered out from the database that are related to each other.
The web store operators maintain specific products in the master record of other articles that are to be displayed for cross-selling purposes.
Software filters the products that a customer has already purchased and uses them to calculate the items that are most likely to still interest him.
In practice, cross-selling is usually placed on the frontend of the store below or to the right of the article, with the following or similar headings:
"We also recommend:"
"Customers who bought this product often also bought:"
"Other items from the manufacturer:"
So when you read phrases like these in an online store or online marketplaces, you now know that cross-selling is happening. Our 10 tips for your effective cross-selling:
#1 Know your target audience
Understand your customers' needs, preferences and buying habits. This is critical to creating relevant cross-sell offers.
#2 Offer complementary products
Make sure that the suggested products or services actually match the customer's main product and add value.
#3 Personalized recommendations
Use data and customer segmentation to create personalized cross-sell recommendations. Customers respond better to offers that are tailored to their individual interests.
#4 Transparent product descriptions
Clear and concise product descriptions are critical. Customers should understand why the suggested product is relevant to them.
Create attractive bundles for your store where customers can save money when buying multiple products.
#6 Compelling product images
High-quality images of the suggested products help customers get a better idea and make it easier for them to make a purchase decision.
#7 Customer reviews
Show positive customer reviews for the suggested products to build trust.
#8 Run A/B tests
Experiment with different cross-selling strategies to find out which ones work best. A/B testing can provide valuable insights.
#9 Mobile optimization
Make sure cross-sell offers are highly visible and user-friendly on mobile devices, as many customers shop on mobile.
#10 After the purchase
Cross-selling doesn't end with the purchase. Use follow-up emails or thank you messages to suggest additional products or services that may interest the customer.
Reading tip: We have collected all the opportunities and challenges of selling on online marketplaces for you here.
Why cross-selling is an effective lever in SEO
Cross-selling is very important for the SEO of online stores. Since these naturally often have too little search engine relevant content and external linking to all product pages in a large store is difficult to implement, indexing of all sub-pages of the store is difficult to implement. Comprehensive internal linking is helpful here. With an automated cross-selling module, this is possible without much effort.
This means that product pages are linked to each other via internal links, so that sooner or later each article receives several internal links. This allows search engine bots to find subpages faster. In addition, this supports SEO for the entire online store, as balanced internal linking is an important ranking factor for the algorithm of Google & Co. Ideally, each product page should have at least ten internal links.
Opportunities of cross-selling in online marketing
With the reference to "Recommended Products", Latori client Outdoorchef exploits the potential of cross-selling.
Optimized cross-selling, for one, helps improve a personalized customer experience. An excellent customer experience means good customer ratings and these in turn lead to a good reputation for a company.
On the other hand, online retail in particular relies on cross-selling as a marketing strategy. This is because web stores with a large product range can therefore use cross-references to refer to new products, matching or additional items.
With Big Data or data-driven marketing, cross-selling can also be optimized based on valid customer data. For example, a registered user of an online store can be recommended a suitable product based on items they have previously purchased.
Cross-selling can also be integrated into e-mail marketing. Many online retailers send customers personalized e-mails with cross-references to other items after a purchase.
Reading tip: Here's what you need to keep in mind when redesigning your online store.
Upselling is an e-commerce and retail sales strategy in which a seller or company attempts to persuade customers to buy a more expensive or enhanced product or service than what they were originally considering or have already selected. The main goal is to increase the average transaction value per customer and thus increase revenue through upselling. Upselling is an effective strategy to increase sales while adding value to customers by providing them with products or services that better fit their needs. However, it should be done in a customer-centric manner without overwhelming or pushing customers to buy something they don't want or need. Careful segmentation of customers and personalized upselling offers can help maximize the effectiveness of this strategy.
Cross selling vs. upselling: the differences
Unlike cross selling, upselling does not offer the customer related or complementary products, but is designed to make higher-priced items or services more appealing to him.
The two strategies can also be used together. However, their impact on the business is somewhat different. Upsells often lead customers to choose higher-priced products, while cross-sells increase average order value (AOV) by adding more products. Ultimately, a company's business model determines whether cross-selling or upselling makes more sense.
For example, customer acquisition and shipping are associated with high fixed costs for orders for e-commerce companies, which is why the AOV should rather be increased here (cross-selling). In contrast, it makes more sense for other companies to encourage customers to opt for higher-priced items or add additional products (upselling).
However, the two strategies also have something in common. For example, both cross-selling and upselling are often used in the middle and late stages of the conversion funnel, when customers have already signaled that they are interested in buying. In addition, both sales strategies promote products or services that are similar to the item the customer intends to buy. And ultimately, both cross-selling and upselling pursue the goal of increasing profitability.
Reading tip: Learn 12 ways to increase AOV with Shopify Plus here.
Nowadays, cross selling is a common sales strategy that is indispensable for some online stores and marketplaces. As complementary products (usually complementary goods) are presented to the customer in this way, both revenue and the number of items sold increase. This tactic tends to save resources, as customers already acquired in the past are reactivated. This eliminates high acquisition costs for new customers and increases the profit margin.
Sounds good? Then what are you waiting for - start cross-selling in your online store. If you need support with this or any other Shopify or Shopify Plus related topics, we'll be happy to help. Simply contact us via our contact form.
Frequently asked questions about cross selling
What is cross selling?
Cross selling is a sales strategy in which similar items or additional products are suggested to a customer who has already made a purchase or shown an interest in buying. The main aim is to increase the average order value and thus sales.
How do you recognize cross-selling products?
In online stores, cross-selling products are usually located on the right-hand side or below the product that is currently being viewed. You can usually recognize these products by the fact that they have a title such as "Similar products" or "Accessories for this item". See the article for more examples of how you can recognize cross-selling products.
What are examples of cross-selling?
One cross-selling example is selling shoe polish and waterproofing spray when buying winter boots in a shoe store. You can find more examples in the article.
How does cross selling work?
In online stores, cross selling usually takes place on product pages or in the checkout process. Customers are offered items that are related to the product they are currently interested in or have been interested in buying in the past. The aim is to inspire the customer to buy more products and thus increase the average order value.
What are cross selling advantages?
The main advantage of cross selling is that the customer has already shown interest in your brand and products or services, so lower acquisition and marketing costs are necessary. Due to an existing customer loyalty, the clientele is generally more willing to spend more money, which increases the likelihood of purchase. As a result, the average order value and sales can also be increased.
What is upselling?
Upselling is a strategy in which more expensive (often more modern, for example) products are suggested to a customer than those for which he has shown an interest in buying. In electronics retail, for example, this could be the newer and more expensive model of a smartphone.
What is the difference between cross-selling and upselling?
In cross-selling, the customer is offered complementary or related products that supplement their current purchase. Upselling, on the other hand, offers the customer an upgraded version of the same product or a higher-priced product.