The Benefits of Cross Selling
by Sheryl Davis, Glew
What is Cross Selling?
Cross Selling is a sales tactic that encourages a shopper to buy complementary products.
Think about shopping for tomatoes at a grocery store. It’s common for stores to display items, such as cheese, among an aisle devoted to vegetables. Despite the store having a section specifically for cheese, store managers strategically position cheese among the tomatoes knowing that the combination may tempt hungry customers. The product placement makes it easy for customers to find related items and impulsively pick up goods while shopping. In doing so, stores drive increases to the order value while reminding shoppers that certain products go well together.
Just like cross-selling products in brick and mortar stores, online tactics should bring convenience and ideas to the shopper while also proving to be lucrative for the retailer.
According to research by software provider Monetate, product suggestions can:
Increase revenue up to 300%
Boost conversions by up to 150%
Increase Average Order Value by as much as 50%
Benefits of Cross Selling
Cross selling benefits both stores and customers. For stores, it increases Average Order Value (AOV) and therefore benefits revenue. Larger orders also often allow stores to cut down on packaging and shipping costs by consolidating items in a box that may have otherwise been partially full. And keep in mind that driving your AOV higher will increase the Lifetime Value of customers, often providing incremental capital that can be used to market to those customers.
But the good news is that cross selling doesn’t just benefit your store, it also benefits your customers! Shoppers can find items faster when they are recommended on individual product pages. Plus, a well-paired product recommendation can bring a customer’s attention to a complimentary product that they might not have known existed. Adding value to your customer’s experience while making more money? It’s a no brainer.
How to Get Started
1) Use a tool that analyzes purchasing behavior. With a breakdown of products that are most commonly purchased together you can set your cross sale recommendations without any guesswork.
2) Install a Magento extension that will display product recommendations. Extendware’s “Frequently Bought Together” and “Who Viewed This Also Viewed” extensions are built for Magento stores to cross sell on every product page.
3) Monitor items that are selling effectively and consider adding those items to your store as a bundle. You could offer a small discount when purchasing the items together, or pull together kits for items to quickly be purchased at once.