Cross-Selling

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What is Cross-Selling? Meaning.

Cross-Selling is the practice of suggesting and selling additional, related or complementary items to a buyer than those that have been bought before to an established, existing client.

Selling more of the same items to existing clients is not considered cross-selling.

Selling extra options to customers who have already committed to making a purchase for some item is called: upselling.


Cross-Selling versus Upselling. Differences

Upselling and cross-selling are quite similar. They both aim to maximize the value of a purchase as well as to improve the customers buying experience by creating additional value.

However, while cross-selling focuses on promoting additional products from related product categories, upselling encourages customers to purchase higher-end versions of that same product or to pay for upgrades and extra features or extra options.


Examples

If a customer is buying a laptop and the company offers a printer to use alongside with the computer, that is cross-selling. The same is true for offering extra leg space to airline passengers for an extra fee.

If a customer is buying a basic laptop and the company offers a faster processor or extra memory, that is upselling.


Benefits of Cross-Selling. Advantages

  • For the seller
    • It is a way to increase sales to the same customer by introducing other products in the product range.
    • Increase in revenue and profit.
    • Decreases the likelihood of the customer switching to a competitor.
  • For the buyer
    • Having a single supplier for multiple products (one stop shopping). This could be more pleasant.
    • Increase in efficiency (less commercial meetings needed)
    • May result in an extra discount due to larger spending.
    • Reduces the risk of unclear responsibilities in case of problems (finger pointing from one supplier to another)

Limitations of Cross-Selling. Disadvantages

  • For the seller
    • There is a risk that existing relationships with the client could be disrupted.
    • The need for the existing product/service might decrease by selling the new product/service.
    • Potential ethical issues, such as the mix of accounting services (requires objectivity) with selling advisory/consulting work (Arthur Anderson at Enron))
  • For the buyer
    • Additional cost

Obstacles to Cross-Selling. Barriers

  • Certain customer policies may require the use of multiple vendors (multi-vendor policy)
  • Large organizations might have many purchasing departments and officers, making cross-selling very complex.
  • The fear of one delivery unit that other delivery units might do a bad job at the client, influencing their own business negatively.

Forms of Cross-Selling. Types

  • Normal cross-selling: while servicing an account, a service provider finds out about an additional need/problem area of the client and offers to solve it.
  • Total Solution Selling: for example large IT vendors, selling hardware, maintenance, standard software, tailoring of the software, training, consultancy and even financing of the entire solution.
  • Customer Loyalty Programs.
  • Add-on Services: for example selling all-risk insurance when you buy a car.

Cross-selling must not be confused with Multi Channel Marketing , nor with the Validity Effect, nor with Horizontal Diversification.


Cross-Selling Special Interest Group


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Forum about Cross-Selling  

Discussions about Cross-Selling.


🔥 NEW Upselling: Optional Feature Pricing
Many companies are offering optional, related products and/or additional features along with the main product. This is c (...)
 
 
 
 
What Techniques are used in Cross-selling?
Hi all..., Can anyone explain what techniques, including statistical techniques, are involved in cross-selling? Many th (...)
 
 
 
 

Best Practices about Cross-Selling

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Expert Tips about Cross-Selling

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The Actual Relationship Between Cross-buying and Consumer Loyalty

Customer Loyalty, Consumer Loyalty, Cross-Selling, Cross-Buying, Sales Management, Account Management (...)
   
 
 
 

Information Sources about Cross-Selling

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Compare also: Foot in the Door  |  Analytical CRM  |  Bait and Switch  |  AIDA

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