Selling complementary goods and other products: How to proceed?

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Cross-selling and upselling: methods, benefits, and tips
Cross-selling
Tactics
Customers
Methodologies
Cross-selling and upselling increase revenue through complementary sales, but understanding when and how to implement them is critical.

In this article, you'll learn the key differences between cross-selling and upselling, and discover which industries these methods are predominantly used in, both B2B and B2C .

What is cross-selling?


Cross-selling, which involves offering additional products or services to current customers, aims to facilitate and increase sales, as well as improve customer satisfaction.


Cross-selling : Definition and examples
A good example of cross-selling can be seen in supermarkets: customers who come to buy basic products (the initial purchase) often add additional items such as candy, drinks, or personal care products that they find near the checkout counters.

But what exactly is cross-selling? Typically, cross-selling involves personalized product recommendations that complement a previous original purchase. For example, a customer who has purchased a smartphone might be interested in other relevant products, such as a phone case, a screen protector, or mobile insurance. Cross-selling includes offering additional products or services that complement the customer's initial purchase.

However, cross-selling is not a sales technique limited to complementary products; it can also include items from different categories. One advantage of successful cross-selling is that satisfied customers are likely to return to the same supplier, especially if the quality is good.

Repeat purchases help build customer loyalty. According to several studies , acquiring a new customer can be up to five times more expensive than retaining an existing one. This demonstrates the significant value of cultivating existing customer relationships, as loyal customers generate ongoing revenue and are more willing to invest in additional offerings.

For example, if a customer has purchased a new car from a dealership and is satisfied with their purchase, they are likely to be receptive to purchasing additional products from the same dealership, such as a set of end-of-year tires.

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How complementary products boost cross- selling
Complementary goods are products that enhance each other's use, such as game consoles and games, or content management systems and hosting services. These items are often sold together to provide complete solutions, such as laptops with external peripherals or bagged vacuum cleaners.

What is upselling?


Upselling typically involves offering existing customers higher-priced products or services that promise greater value or more features. Like cross-selling, upselling seeks to generate more revenue per customer or transaction.


When considering whether to cross-sell or upsell, it's important to identify the right opportunities for each strategy.

Compelling upsell offers should be tailored to a customer's specific needs and preferences. By analyzing customer data, companies can identify opportunities to present higher-value options that align with customer interests and past purchases.

This approach increases the likelihood of acceptance and helps build stronger relationships with customers, as they feel understood and valued.

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A hard-sell tactic can sometimes backfire when it comes to cross-selling and upselling. Customers appreciate subtlety and value. Therefore, it's crucial to strike a balance and create a sense of urgency without overwhelming the customer.

Implementing upselling techniques, such as limited-time offers on a premium version or a discount on a higher-priced version, can encourage customers to make a decision more quickly. This strategy not only increases sales but also improves the overall customer experience.

What does "upselling" mean in practice? It's recognizing the opportunity to offer a more expensive, feature-rich product that better meets customer needs.

What is the difference between upselling and cross-selling strategies ?
Both cross-selling and upselling are proven powerful strategies.


Cross-selling vs. upselling: Unlike cross-selling, upselling doesn't involve selling complementary goods, but rather offering a more expensive version of the product.


A customer may choose a more expensive version because it offers more features, for example.

Effective upselling tactics are commonly employed in the technology and software industries. Initially, low-priced offers attract new customers. However, a skilled sales professional quickly recognizes the opportunity to upsell and attempts to sell customers to the more expensive, feature-rich tool if a need is identified.

For example, a basic version of a project management tool costs $15 per month and includes access for up to five users. The Pro subscription, however, provides access for 20 users, premium support, and advanced features. A satisfied user of the basic version, whose team grows as business success increases, would be a suitable candidate for upselling. They have come to trust the vendor and enjoy the product, and their needs have expanded. The software company can then make a timely offer for the Pro version.

Upselling is also possible in traditional retail. For example, perfumes in larger bottles are initially more expensive. However, when calculated on a price-per-milliliter basis, the larger size is a more economical purchase, benefiting both the supplier and the customer.

It's clear that upselling (as well as cross-selling measures) is aimed not only at new customers but also at existing ones.

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The potential of cross-selling in B2B, B2C, and e-commerce
Cross-selling has great potential and is ubiquitous. For example, a car dealership offers insurance for a new car, Amazon recommends similar products during the checkout process, and a spa hotel promotes an additional treatment at check-in. Below, you'll get an overview of the possibilities of this crucial sales tactic.

The potential of cross-selling for e-commerce
In e-commerce businesses , cross-selling is widely used to suggest additional products or services related to items in the shopping cart or products already purchased. There are good reasons for this: personalized recommendations can contribute between 5% and 20% of total sales in an online store.

Amazon is a pioneer in this area: its algorithm suggests suitable additional products related to the main product that are likely to interest the shopper, such as shoelaces that match the shoes they just selected or colorful balloons that match the birthday candles already in their cart.

Online purchasing decisions are often made quickly, and impulse purchases are more likely. In fact, studies confirm that technology is one of the factors that encourage impulse buying.

When cross-selling occurs, the supplier benefits from two main factors: not only does it drive increased revenue, but it can also improve customer relationships. New customers benefit from obtaining multiple useful products from a single source, and existing customers, due to their positive experiences, can approach the same supplier directly when they have a new need.

To maximize sales efficiency, online stores use algorithmic processes for cross-selling. Larger companies, such as MercadoLibre or Amazon, develop their own recommendation algorithms that can calculate cross-selling probabilities based on existing customer behavior.

To ensure the effectiveness of these strategies, it's crucial to have a well-defined cross-selling process. This involves training your sales team to recognize upsell opportunities and make personalized product recommendations aligned with customer needs.

This increases conversion rates and fosters long-term customer engagement. Additionally, monitoring the sales cycle and adjusting your business model to reflect insights gained from customer feedback can significantly improve your marketing efforts.

Cross-selling vs. upselling Euro


The potential of cross-selling in B2B
According to Harvard Business Review, acquiring a new customer is 5 to 25 times more expensive than retaining an existing one .

Effective cross-selling through good customer relationship management (CRM) can significantly increase customer lifetime value. Implementing effective cross-selling techniques, such as product bundling, providing personalized recommendations, and leveraging customer data, are crucial to maximizing revenue.

Offering a complementary product or service during a customer interaction can lead to increased satisfaction and higher sales. By aligning cross-selling efforts with the company's business objectives, businesses can ensure that these techniques drive sales and contribute to long-term success. For example, a software provider, by offering regular updates, advancements, and related tools, achieves high levels of customer satisfaction and loyalty .

Effective communication is another critical component of successful cross-selling. By clearly articulating the numerous benefits of additional products or services, sales teams can better persuade customers to consider these options. This communication should be consistent across all touchpoints, ensuring customers receive the same message, whether they are interacting with a sales representative, viewing an email, or simply browsing the company's website.

There are many opportunities for cross-selling, and the possibilities aren't limited to the sales process . Customer service teams can also proactively seek out additional solutions with customers.

Every interaction with the core product line offers opportunities for cross-selling. Even in technical support or during complaints, cross-selling opportunities can be found. The key is for customers to always feel seen, understood, and valued.

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Cross-selling is common in B2C
Supermarkets analyze their customers' purchasing behavior, just like online retailers. They strategically place products in the physical store (offline) and on their websites (online) to maximize customer benefits and stimulate impulse purchases.

Examples of cross-selling are not only used in the low-price segment. For example, a furniture store might offer delivery and assembly services along with its new kitchen. Similarly, a car dealership might sell the right car insurance along with the vehicle.

As in the B2B sector, cross-selling and customer retention are interdependent. Customers who receive good advice in a local store and are satisfied with the product quality are more likely to return to purchase another product.

However, it is important to note that in many regions, email marketing must be sent with the customer's explicit consent. This is within the scope of the B2C online marketing strategy. Privacy regulations and data protection rules in the B2B sector should also be considered .

The success of cross-selling and upselling strategies also depends on well-executed marketing campaigns . These campaigns should highlight the benefits of additional products and services, using targeted messaging that resonates with the audience.

By integrating cross-selling and upselling into broader marketing efforts , companies can reach more customers and increase the effectiveness of their sales tactics.

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The benefits of cross-selling
Revenue can be increased through skillful cross-selling, but this doesn't always have to be direct. Products can be sold at or below cost to cross-sell higher-margin items or services, while less popular products can be highlighted as complements to bestsellers.

Cross-selling can strengthen customer relationships and improve customer satisfaction in both B2B and B2C . However, products must be offered at the right time in the customer journey . This requires a thorough target group analysis and a well-thought-out CRM strategy .

Furthermore, cross-selling offers additional benefits in search engine optimization (SEO). Online stores with numerous products benefit from the opportunity to establish numerous internal links for cross-selling purposes. These ranking factors for Google's algorithm can help drive more traffic to the website or individual product pages.

For cross-selling to be successful, it's important to avoid offering irrelevant products, which can lead to customer frustration and decreased conversion rates.

Instead, focus on personalized product recommendations closely related to the original purchase.

Original purchase effective crusade Ineffective cross-selling
Sales of electronic products Laptop A laptop case, an external mouse, and a cooling pad iPhone case
Online bookstore Mystery novel Other books by the same author, mystery bookmarks, and a reading lamp Cookbooks
Clothing retailer Formal suit A tie, dress shoes and a belt Casual T-shirts
Home improvement store Electric drill Drill bits, safety glasses, and a tool case Garden hose
Online grocery store Paste Pasta sauce, Parmesan cheese and garlic bread Breakfast cereals
This approach ensures a higher probability of acceptance and improves the customer's overall shopping experience.



The disadvantages and risks of cross-selling
Cross-selling isn't a surefire success; it requires intensive research and careful planning. If customers continually receive inappropriate offers at the wrong time, sales are lost and people may even feel harassed. In the worst case, they'll turn to competitors, where they might feel better.

Even if cross-selling is successful, customers may invest less money elsewhere, even if they would have been interested. Therefore, cross-selling and upselling are not automatically profitable but must be continually evaluated using specific customer data .

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7 tips to unlock the potential of cross-selling
The better you understand your customers' needs, the more effectively you can offer complementary items and other cross-sell products at the right time.

It's all about identifying your customer's needs and determining the right time to make the offer. These tips will help you use cross-selling as effectively as possible:

Don't make too many offers. Many people feel overwhelmed by too many options (the paradox of choice), which can lead them to abandon the purchase altogether. Ideally, choose two or three suitable cross-sell offers.


Create purchase incentives. Small purchase incentives, such as free shipping for orders over a certain value, can increase the likelihood of cross-selling success.


Position cross-sell products correctly . Cheaper products are often purchased during the checkout process. On the other hand, more expensive products should be presented to the shopper earlier in the purchasing process so they can consider their overall budget.


Be honest. Always focus on customer benefits, not short-term sales. A quick cross-sell can have a positive effect at first, but intensive customer relationship management with real information about the target group always wins in the long run.


Try pre-selection. Offer your main product in combination with additional pre-selected cross-sell products, as this typically generates better sales rates than if the shopper has to actively add a product to their shopping cart.


Consider the communication channel. Those who have placed online orders through a website may be more receptive to follow-up email marketing than to other channels. On the other hand, customers who have received personal advice may be more likely to be enthusiastic about other products over the phone or in a personal conversation.


Collect data. A reliable marketing strategy for cross-selling campaigns can only be determined based on concrete data ( KPIs ). A reliable CRM system helps you track this and target customers at all stages of the customer journey.

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Selling complementary goods and other products: How to proceed?
There are many different marketing actions for cross-selling, such as a follow-up newsletter , targeted social media ads, or suggested products in-store that are algorithmically selected.

Modern marketing methods, such as product recommendations within a community , social selling, or influencer marketing, also open up cross-selling opportunities. In any case, a good customer experience is essential. Always keep in mind that upselling can be more advantageous.

Below are four steps you should follow to begin developing your cross-selling strategy.

1. Group complementary products and goods
The more data you have at your disposal, the more accurately you can identify which cross-sell products can complement your core product. If you have little or no data, the following questions can help rich people database provide initial guidance:

What is the main product?


Are there more expensive products that might still be a good addition?

What complementary good does the product need to be usable?

What related products do people buy on other platforms?

Upon closer inspection, which products are not suitable for cross-selling even if they belong to a similar category (e.g., winter clothing when buying a swimsuit)?

2. Analyze customer data
If you already have customer data, you can analyze where the greatest cross-selling potential lies. Include factors such as price, quality requirements, and other customer preferences.

Using lookalike audiences, you can use this data to target customers who have only purchased once or have never purchased anything. Consider changes and cancellations to avoid skewing your results.