Cross selling is a sales technique, where a related product is suggested to the customer to add to their original purchase. Businesses use cross selling to increase the transaction value for customers who are already converting and are in the final stages of completing the transaction.
Cross Selling vs. Upselling
The main difference between upselling and cross selling is that in upselling the originally chosen product is dropped and replaced by a similar, but upgraded version, of the product. In cross selling, however, the original product is kept and additional, related products are added to it.
Example of Cross Selling vs. Upselling
A customer at a beauty store is buying a shower gel bottle at a size of 4 oz.
Upselling: The sales person suggests taking the same shower gel, but 8 oz size because this will lead to saving on the cost of this product.
Cross Selling: The sales person suggests other related products from the same fragrance, such as body lotion and perfume, so the customer can layer the products together and have a better experience through stronger, longer lasting effect.
Why is it a Good Technique in Sales?
Cross selling could lead to a win/win situation for the business and the customer, if the suggested products will add real value to the customer.
This could be in the form of savings (for example through bundling) or better user experience. Either way, the sales person is using their product knowledge to add more value to the customer, while at the same time adding more value to the business as well.
Businesses spend a lot of money on marketing to drive traffic to the stores. So when customers come to the store and start converting, the business will then try its best to maximize the average value of the transaction through different techniques, such as cross selling.
This way, the business is increasing its ROI on the marketing spend, and of course improving its overall profitability in the process.
How to Set Up Cross selling in Ecommerce?
Cross selling and upselling can be set on your ecommerce store through your shopping cart.
Here we will give an example on WooCommerce
After you have created a new product, scroll down to the “Product Data” section and then click on “Linked Products.
Here you will be able to choose from existing products that you already have listed in your shop and either assign them as an upsell or a cross-sell.
It is important to make the distinction here because if you assign the product as an upsell, the shopping cart will recommend it as a replacement to the current product and not as an addition to it.
Cross Selling Examples
This sales technique is not only restricted to retail or ecommerce. It is used in different industries as we will show here
In Travel Industry
When you book a ticket to a certain destination, the travel agency can cross sell you with hotel and car rental booking
When you open a current account, the bank usually cross sells you by suggesting you take a credit card or apply for a loan.
When you take a health insurance, the company can cross sell you by suggesting a car insurance or a life insurance as well
Overall, the suggested products are not meant to replace the original purchase, but rather add to it through related products.
Businesses try to maximize their returns, by increasing the average transaction value of each converting customer, using different techniques, such as cross selling.
It is important while applying such techniques to make sure, that while the business is increasing its own value, it also adds more value to the customers, so that they can build a long term relationship that is based on trust.
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Retailer & Founder of Retail Dogma, Inc.
Rasha has 12 years of retail & ecommerce experience. She has started an ecommerce business in 2008, and later worked at H&M, Bath & Body Works, Victoria’s Secret and Landmark Group. She has lived in 4 different countries, speaks 3 different languages and holds a master’s degree in Strategic Management & Marketing.