Cross-Selling Best Practices for Small Businesses

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If you’ve ever dashed into the pro shop for a few golf balls before tee time and walked out with the balls and a ball washer, you’ve just experienced cross-selling. If you’ve ever gone to your stylist for a trim and walked out with a trim and highlights, you’ve also experienced cross-selling. Cross-selling is an excellent way to sell more products or services, which means more profit.

What Is Cross-Selling?

Cross-selling is about selling your customers a product or service that complements the product or service for which they’ve come to your store or website. The cross-sold item is related to the original item but does something that the original item does not.

For example, let’s say you own an upscale pet boutique, and a customer has chosen an adorable little sweater for her Yorkie. You might say, “Great choice! Did you see the adorable matching collars and leashes that go with these sweaters?” or “This sweater is so cute! We have this amazing fabric wash specifically for doggy knits. It keeps them smelling good and looking great for a long time. It’s only $5.”

Cross-selling can increase sales and improve your profit margin. Unfortunately, if you’ve ever bought a car from a dealer, you’ve probably been the victim of aggressive cross-selling for a clear coat, floor mats and more. Cross-selling doesn’t have to be a hard-sell technique; in fact, it shouldn’t. Delivered well, it can come across as simply sharing helpful information.

What Is Upselling?

Although the terms “cross-selling” and “upselling” (or up-selling) are sometimes used interchangeably, there is a difference. Upselling is persuading your customers to buy a better and more expensive version of what they originally chose. When McDonald’s asks you if you’d like fries with your burger, they’re cross-selling. When they ask you if you’d like to supersize your order, they’re upselling.

Upselling is very common in the insurance industry. To keep the premium low, you might want to buy bare-bones auto liability coverage. In Texas, for example, the minimums you must purchase are $30,000 per individual and $60,000 per accident for bodily injury and $25,000 for damage per incident.

Higher limits cost more. The insurance agent might stress to you that with medical costs being so high these days, you really should have more than the minimum. You give it some thought and agree. You’ve just been up-sold.

Best Practices Definition

A best practice is a way of doing something that has come to be accepted as the best way in any given business. A particular approach or manner of cross-selling would become a best practice if it has a high success rate with little or no negative repercussions, such as annoying your customer.

Making best practices for cross-selling a routine part of your business to increase revenue from existing customers can be a balancing act. The last thing you want to do is alienate loyal customers with aggressive techniques or canned scripts. Consider these best practice approaches for cross-selling to use yourself and to teach to your employees.

Timing and Context

Watch your timing and pay attention to context. Remember that these are existing customers. You don’t want to lose them by trying to cross-sell them something when they’ve come to return an item or have three rambunctious young children with them. Cross-sell at a time when you’re having a pleasant interaction, and they don’t seem to be in a hurry.

Appropriate and Relevant

Keep it appropriate and relevant to the customer. It may seem obvious that you don’t want to try selling a curling iron to someone with super short hair, but you can probably think of an instance when a perky clerk tried to sell you something that was completely wrong for you. They’re usually just doing what they’ve been instructed to do, but a lot of credibility can be lost that way.

Keep It Natural

It has to be natural. No scripts or monologues are allowed. Cross-selling works best when it unfolds naturally as part of a conversation.

In a pet store, for example, you might start a conversation by first asking the customer about his dog's breed. You can then comment on that breed’s beauty and intelligence and then ease into cross-selling. If you don’t have other customers waiting, ask to see a photo of the dog.

Listening Is Key

This might be the most important best practice of all. Listening to your customers is as important if not more important than anything you have to say. You’ll be surprised at what you learn and what opportunities for cross-selling present themselves.

If they bring up a problem with which they’re grappling, relate to it and recommend a solution. A woman in your bath and body shop is checking out with her unscented lotion and sighs, “I love scented soaps, but they always dry out my skin.” You might respond, “I know exactly what you mean. I had that same problem until I tried this very lightly scented goat's milk bar.”

Give It Away

Give samples. Costco is great at this. You emerge from the chilly vegetable cave to the aroma of samples of freshly warmed organic chicken breast stuffed with broccoli and cheddar cheese.

In the bath and body shop, if the customer hesitates at the $12 goat's milk soap, put one in her bag and say, “Here, it’s on the house. I know you’ll like it.”

Whether she ultimately starts buying the soap or not, you’ve just earned yourself a customer for life. The more cross-selling that’s done, the more products or services will be sold. You can’t force sincerity, so let your employees sample products themselves so that they can pitch them honestly.

Cross-Selling and Upselling Online

Having an online business is no obstacle to using these techniques. Cross-selling is done all the time in e-commerce. When looking at an item you’re thinking about purchasing on Amazon, you’ll see bands of thumbnails on the screen with headings like “Sponsored products related to this item” and “Related to items you've viewed”. That’s the cross-sell.

Upselling occurs online too. After you’ve clicked on an item to read the details, or after you’ve placed an item in your cart, you might see a pop-up that says something like, “Customers who shopped for the Hamilton Beach Electric Mixer ($80) also shopped for the KitchenAid Artisan Design Mixer with Glass Bowl ($300)". And there it is: A picture of the gleaming, cherry-red KitchenAid mixer.

Cross-selling and upselling happen all the time and everywhere. Use these techniques wisely, and they won’t be off-putting to your customers. They will increase sales and add to your bottom line. Amazon has attributed as much as 35% of their profits to cross-selling with their “Frequently bought together” and “Customers who bought this item also bought…” techniques.

Cross-Selling Opportunities in Business

These best practices and cross-selling examples apply equally whether you’re selling products, services or both. Opportunities are endless. If you’re a masseuse who uses essential oils, let your customers know that they’re available for purchase at the front desk.

They can be adapted for e-commerce too. Amazon has mastered it, but do not copy what they do. Put a little effort into finding fresh ways to showcase related products or services to cross-sell to your customers. If done correctly, you’ll be very happy with the results.

References

About the Author

LeDona Withaar has over 20 years’ experience as a securities industry professional and finance manager. She was an auditor for the National Association of Securities Dealers, a compliance manager for UNX, Inc. and a securities compliance specialist at Capital Group. She has an MBA from Simmons College in Boston, Massachusetts and a BA from Mills College in Oakland, California. She has done volunteer work in corporate development for nonprofit organizations such as the Boston Symphony Orchestra. She currently owns and operates her own small business. In addition to writing for PocketSense, she writes for Bizfluent, Budgeting the Nest, Legal Beagle, PocketSense and Zacks.