On a breezy night, you felt like going to McDonald’s to eat your favorite cheeseburger. And what could be better - it only takes you ten to reach the closest Mcdonald's.
The place was just about to close, but you managed to reach there in time. After quickly placing the order for a large cheeseburger, you asked for coke to go along with it. But it was too late, and they were out of coke.
Well, that’s far from being a happy meal. :’(
Burger + fries + coke - isn’t that how it’s supposed to be? Isn’t that how we always picture a successful trip to McD?
Does this make you realize how you have developed a habit of having a perfect meal with those three things on your table?
That’s how successful McDonald’s has been in infusing its cross-selling strategy in our taste buds. That it is almost impossible for us to order burgers or fries without a coke.
Cross-selling offers another service or product in addition to the initial purchase. It’s a smooth sales strategy that increases revenue by leveraging the existing customer base. So buckle up; let's understand this sales tactic in more detail.
What is cross-selling?
The sales process starts with lead generation and ends with the lead converting into a customer. The hard part is the middle - where you have to use your skills and strategies to move the prospects further down the funnel.
Now, suppose you have a prospect who already loves and trusts your SaaS business. That means half of the tasks in the sales process are already done! You simply need to talk to the prospect and make a sale.
Cross-selling strategy utilizes the same approach. Your existing customers trust your brand, and that’s why they are with you. So, if you provide them with another product or service that can enhance the experience of the original purchase, then they are more likely to buy it.
For example, when you select an item on an eCommerce website, it displays a combination of other items that you can buy along with it. Suppose, you have added a smartphone to your shopping cart, then Amazon will suggest that you can buy a phone cover, tempered glass, or earphones.
This way, when it comes to selling phone covers, Amazon sellers don't have to depend entirely on finding potential customers for phone covers. The customers purchasing a phone are also their target customers.
Another cross-selling example is when fast food joints like KFC sell meals. So when you buy a chicken bucket, complementary products like coke and fries are on the side.
Cross-selling helps you spread out and increase your revenue and ROI. Moreover, cross-selling increases customer loyalty because their experience is enhanced. Who doesn’t like coke with chicken wings?
Why is cross-selling important?
Cross-selling is not just selling related products on initial purchase to build extra cash. In today’s world, customers want more value for their money. Add-ons are their default expectation. Cross-selling helps you meet that expectation. It establishes trust and builds lasting customer relationships.
With an effective cross-selling strategy, you can improve customer lifetime value with increased customer satisfaction and customer loyalty. It is a win-win situation where both your Saas business and customer are happy in the end.
Cross-selling strategy affects your bottom line so much that it is an integral part of your sales techniques. Let’s dive into how cross-selling boosts revenue.
How does cross-selling increase your win rate?
Cross-selling helps you save your margins and spend less on customer acquisition. It brings them closer to their goals and derives more value from their original purchase. And for you, an effective cross-selling strategy pushes your sales, revenue, and profits to a new height.
Improves customer experience
Cross-selling doesn’t shove more products down the customer’s throat. Instead, an effective cross-selling strategy aims at adding more value to the purchase.
Answer these questions:
- What else should you give your customer so that they can enjoy their purchase more?
- How can you help them circumvent another challenge with an additional service?
- How can you provide greater convenience to them?
For example, you need to book flight tickets to New York. If you don’t live in New York, you need a place to stay. A ticket-booking company that can offer you a cheap stay in New York and the facility to book a flight will likely be your choice. The company is mindful of the customer’s needs and is willing to offer a complementary product that enhances their traveling experience.
The additional product increases customer satisfaction and improves the customer experience. In turn, the customer would want to return to the travel company for such deals, which provides greater convenience. Moreover, these customers are testimonials of a successful sale and they can help you put in a good word for you.
Trust goes a long way. A customer might just order the additional products without checking the reviews because they trust your recommended product. Moreover, these customers are testimonials of a successful sale and they can help you put in a good word for you.
Provides a personalized experience
In today’s world, a personalized experience is expected from the seller by default. Even on your first call, the customer expects you to know them, really understand their problem, and provide a perfect solution.
Cross-selling technique uses the customer’s purchase history to provide a personalized experience. Their faith in your SaaS business increases as you sell the products they want. It establishes a connection with your brand because the product recommendations are based on their personality and behavior.
With smart conversation intelligence tools (like Wingman), you can get rich insights into your customers and leverage them to tailor personalized conversations on call. With this AI-powered tool in your arsenal, you can personalize your sales pitch, tackle sales objections in real-time, and get live on-call assistance too.
Increases customer retention
Finding new customers means deploying more resources and time. So, most Saas companies are more inclined to repeat sales and retain customers to increase their revenue.
Cross-selling then becomes an almost necessary sales tactic to increase loyalty. It provides incentives for their specific needs and adds more value to the initial purchase. Customer loyalty is the bread and butter of your Saas business, and unfortunately, it is common for customers to lack engagement and leave. That’s why you need to keep the customer interested and minimize the costs from the churn rate.
So, with cross-selling, you are building a stronger connection and giving them more reasons to stay.
Provides a complete solution
The customer’s need is not specific to a single product. In fact, they need additional products to fulfill their goal.
For example, if you are selling a TV, the customer will definitely want a warranty to protect their gadget along with it. You can also throw in a screen cleaner, cables, and other products. Because once they buy a TV, they will not just install it and not do anything further with it.
Improves the return on investment
Finding new customers means starting the sales process all over again. Cross-selling allows you to make quick profits. The average order value (AOV) increases when the customer buys complementary items, so you get a better return on your investments.
Offering customers-related products through sales strategies like cross-selling and upselling reduce marketing and sales efforts because your customer already trusts you.
Increases customer lifetime value
“We showed that in industry after industry, the high cost of acquiring customers renders many customer relationships unprofitable during their early years. Only in later years, when the cost of serving loyal customers falls, and the volume of their purchases rises, do relationships generate big returns. The bottom line: Increasing customer retention rates by 5% increase profits by 25% to 95%.”
- Frederick F. Reichheld and Phil Schefter of the Harvard Business School conducted by Bain & Company, in coordination with Earl Sasser of HBS.
Loyal customers and satisfied customers bring greater margins, and the overall customer lifetime value increases. So the gains are not just one time, but in the long run, you are earning greater profits.
For example, you are selling credit cards to a customer who came to opt for a loan. This customer will bring in additional capital along with the interest payment.
Perfect cross-selling with Wingman
Cross-selling strategy will work wonders for you. But you need the right data and insights into your customer's mindset and buying behavior to make the most of it. Wingman helps you do that and more.
Wingman helps you really understand your customer’s needs. It records and transcribes your sales calls so that you can go back and listen to them. Don’t worry, you wouldn't have to replay the entire recording. Wingman gives you actionable insights into your customers’ behavior and helps you recognize their pain points. The story doesn’t end there.
Wingman proves to be your true wingman when you’re on a call with your prospects and customers. It provides live assistance while you are on your sales calls, tackling objections and trying to cross-sell your products. It gives you the important information and cues you need to close the deal, right when you need them. With Wingman, recommending products couldn’t have been easier.
Integrate Wingman with your CRM and business platforms, like slack, calendar, and video-conferencing tools quickly and make the most of it from day one. Know your customer with Wingman. Book a demo today!