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Cross-Selling's Time Has Come

Cross-Selling's Time Has Come

If customers are approached in the right way and at the right time, cross-selling can be a breeze. The trick is to understand the customers' needs and present them with the right solution when they're most likely to be receptive to your suggestion. Cross-selling mistakes, on the other hand, can jeopardize the entire sale.

By Michael Dadoun CRM Buyer ECT News Network
06/23/09 4:00 AM PT

"You got your peanut butter in my chocolate!"

"You got your chocolate in my peanut butter!"

It seems painfully obvious now, but to the characters in Reese's famous candy commercials of the 1970s and 1980s, chocolate and peanut butter do actually go together quite well. In fact, what the initially skeptical characters learned through a somewhat painful cross-sell process (usually by bumping into each other) was that these complementary ingredients together made each one better.

Should cross-selling always be this painful? No. But for your customers, it should be as delicious. The most powerful way to increase your top and bottom line today is to create products that can be cross-sold against your "main" product.

Your Customers' Shoes

Your challenge is to put yourself in the shoes of your customer. This mental exercise is a very similar undertaking to becoming an industry leader. Think deeply about what problem your customer is looking to solve, and don't limit yourself to product type. Just because you are a "software company" doesn't mean you have to limit yourself to selling executable files. There is a wide range of products and services you can sell, including consulting and media products. Of course, you shouldn't stray too far from your core competency, but there is no harm in brainstorming complementary products that drive significant margin contribution.

Here are a few angles to consider:

  • The information angle. Let's say you are selling automatic backup software. Some customers will want to know more on IT risk management. Topics could include choosing an enterprise storage system for storing backup content, or choosing between backup solutions based on business need. Consider writing an e-book that you can cross-sell against your main product. If you advertise at the point of sale, you will be pleasantly surprised by how many customers will pick up the cross-sale. The reasoning for this is simple: Customers buy products looking to solve some kind of need. The checkout page is the exact point in time when this perceived need is at its highest -- thus, advertising related products that cater to this need is a highly profitable endeavor.
  • The extended functionality angle. Brainstorm what kind of functionality a customer might look for when purchasing backup software. You could cross-sell a membership to online storage that automatically stores backup content on the internet. Alternatively, you could pitch a special offer for three licenses if a typical user owns more than one computer. You could also consider cross-selling additional features that may not be standard. Such features may include advanced data encryption or automatic file synchronization.
  • The usability angle. Think about how customers interact with your software. After downloading the executable file, a customer may accidently delete or lose the file. Try offering a physical copy of the CD shipped to the customer as a cross-sell. Alternatively, consider providing a 30-minute personalized telephone consultation. Customers frequently get frustrated trying to use software and are often willing to pay for technical support and advice.

If you execute your cross-selling endeavors correctly, your customer will reward them with a positive response. However, there are some risks in cross-selling. Imagine mixing peanut butter with Cheez Whiz -- not so tasty! If cross-sells do not match your customers' overall needs, sales could actually go down. Mismatched product bundles create confusion and vex online shoppers.

Here are the most common pitfalls to avoid:

  • Poor presentation. You need to display an image and a description of the "main" product being purchased throughout the checkout process in order to boost conversion. This builds trust and reassures prospective customers that they are buying exactly what they wanted. When cross-selling, do not confuse the customer by prominently displaying other product images in the shopping cart. Make sure cross-sells are clearly displayed as such.
  • Mismatched products. Prospective customers are looking for solutions to their problems. If you display cross-sells that don't match their needs, the resulting confusion may actually decrease conversions. The likely reason for this is that customers lose faith in your main product's ability to deliver on their needs.

Cross-selling is incredibly powerful -- and potentially delicious. If executed correctly, good cross-selling strategies can easily double your bottom line while dramatically increasing your customers' satisfaction.

Recap: Cross-Selling Lessons to Live By

Think like a customer to drive successful cross-selling opportunities for your products.

Consider your customers' information needs. What problems are they trying to solve when buying your product? What else can you provide to help them solve those problems?

Consider customers' functionality requirements. What additional functionality may augment the usefulness of your product?

Consider customers' usability requirements. What add-ons might increase the usability of your product?

Avoid common cross-selling mistakes that may hinder sales.


Michael Dadoun is COO and cofounder of UpClick, a payment processing service provider.


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