Cross selling is the act or process of selling another product or service directly to a current client. In basic practice, companies define cross selling in several different ways. One common way is to allow existing customers to purchase more than one item from your company at a discount. Another way is to allow current clients to purchase certain items from your company and use it as payment for similar goods or services from other companies. Yet another way to cross sell is to permit current customers to purchase items or services from a competitor’s company and use that as payment for similar goods or services from your company.
Broadly speaking, cross selling is beneficial for two reasons: first, cross selling increases your profits by allowing you to offer more products and services, and second, cross selling is a great way to attract new business. It may seem tricky to determine whether or not to cross sell, but the reality is that most companies can profit by doing so. The trick is knowing when and how to cross sell. Keep in mind that while some people are willing to pay more for a similar product, others won’t even consider buying from a competitor if they are offered a complementary item for free.
To determine when and how to cross sell, you must understand your customer. For example, if you offer a customer a promotional discount on a specific product when that customer makes a purchase of X amount of dollars, your cross selling strategy will be successful. However, this doesn’t mean that the customer should be offered credit for purchasing X amount of dollars – this is just an example. The important thing to keep in mind is that the discount (in this case, the promotional discount) should be clearly tied into the transaction. If the customer is given the option to buy more products or services, then he or she will be more likely to make that decision.
One of the most common mistakes that many companies make when it comes to cross selling is overcharging their customers. This is because many businesses feel that they must upsell in order to generate new business. While upselling can certainly generate a bit of profit, it is important to remember that the entire purpose of offering a discount to a customer is to increase sales. By offering a discount on the original purchase of X dollars, you are encouraging more of your current customers to purchase more items from you in the future.
In many cases, a fast-food restaurant chains experience great success when they offer a discount on both the original purchase of a hamburger and the purchase of a drink at the same time. Customers love the convenience of the offer, and the restaurants can generate a significant amount of additional sales by offering that special deal. When a customer is offered a deal that includes the purchase of X dollars and a discount on the original purchase of Y dollars, there is a strong chance that customer will make a second purchase of X dollars to pay for the burger and the drink. As long as the upsell is a valuable deal, the customer will continue to buy more products from the restaurant chain.
Of course, the goal of offering cross selling in a fast-food restaurant is not to generate new revenue. The aim of this type of marketing is to ensure that existing customers purchase more of a product based on the recommendations of a salesperson. If an upsell is too difficult or confusing for the customer to understand, the sale will likely be a loss leader for the company. By offering a simple solution to a problem, such as a fast-food restaurant that offers a discount on a hamburger if a customer chooses to take that path, cross selling can lead to great profits.