What is cross selling ? Anyone heard of it ?I seen this somewhere before while looking at some analysis guide .
It is a marketing term for cross selling products , another similar term is upselling .
Cross-selling is the action or practice of selling an additional product or service to an existing customer. In practice, businesses define cross-selling in many different ways. Elements that might influence the definition might include the size of the business, the industry sector it operates within and the financial motivations of those required to define the term. The objectives of cross-selling can be either to increase the income derived from the client or to protect the relationship with the client or clients. The approach to the process of cross-selling can be varied. Unlike the acquiring of new business, cross-selling involves an element of risk that existing relationships with the client could be disrupted. For that reason, it is important to ensure that the additional product or service being sold to the client or clients enhances the value the client or clients get from the organization. In practice, large businesses usually combine cross-selling and up-selling techniques to increase revenue.
For the vendor, the benefits are substantial. The most obvious example is an increase in revenue. There are also efficiency benefits in servicing one account rather than several. Most importantly, vendors that sell more services to a client are less likely to be displaced by a competitor. The more a client buys from a vendor, the higher the switching cost. Though there are some ethical issues with most cross-selling, in some cases they can be huge. Arthur Andersen's dealings with Enron provide a highly visible example. It is commonly felt that the firm's objectivity, being an auditor, was compromised by selling internal audit services and massive amounts of consulting work to the account. Though most companies want more cross-selling, there can be substantial barriers: A customer policy requiring the use of multiple vendors. Different purchasing points within an account, which reduce the ability to treat the customer like a single account. The fear of the incumbent business unit that its colleagues would botch their work at the client, resulting with the loss of the account for all units of the firm. Broadly speaking, cross-selling takes three forms. First, while servicing an account, the product or service provider may hear of an additional need, unrelated to the first, that the client has and offer to meet it. Thus, for example, in conducting an audit, an accountant is likely to learn about a range of needs for tax services, for valuation services and others. To the degree that regulations allow, the accounts may be able to sell services that meet these needs. This kind of cross-selling helped major accounting firms to expand their businesses considerably. Because of the potential for abuse, this kind of selling by auditors has been greatly curtailed under the Sarbanes-Oxley Act. Selling add-on services is another form of cross-selling. That happens when a supplier convinces a customer that it can enhance the value of its service by buying another from a different part of the supplier's company. When one buys an appliance, the salesperson will offer to sell insurance beyond the terms of the warranty. Though common, that kind of cross-selling can leave a customer feeling poorly used. The customer might ask the appliance salesperson why he needs insurance on a brand new refrigerator, "Is it really likely to break in just nine months?"[original research?] The third kind of cross-selling can be called selling a solution. In this case, the customer buying air conditioners is sold a package of both the air conditioners and installation services. The customer can be considered buying relief from the heat, unlike just air conditioners.
A Life Insurance company suggesting its customer sign up for car or health insurance.
A wholesale mobile retailer suggesting a customer choose a network or carrier after one purchases a mobile.
A television brand suggesting its customers go for a home theater of its brand.
A laptop seller offering a customer a mouse, pen-drive, and/or accessories.
Incase you dont know what is up selling ,
Upselling is a sales technique where a seller induces the customer to purchase more expensive items, upgrades or other add-ons in an attempt to make a more profitable sale. While it usually involves marketing more profitable services or products, it can be simply exposing the customer to other options that were perhaps not considered. (A different technique is cross-selling in which a seller tries to sell something else.) In practice, large businesses usually combine upselling and cross-selling to maximize profit.
Upselling vs Cross-selling Upselling is the practice in which a business tries to persuade customers to purchase a higher-end product, an upgrade, or an additional item in order to make a more rewarding sale. For instance a salesperson may influence a customer into purchasing an iPhone 5S, instead of an iPhone 5, by pointing out its additional features. "And this over here is our super deluxe model." A similar marketing technique is cross-selling, where the salesperson suggests the purchase of additional products for sale. For example, he might say "Would you like some ice cream to go with that cake?" It is beneficial for businesses to use both techniques in order to boost revenue and provide a valued consumer experience. However, research has shown that upselling is generally more effective than cross-selling
Some examples are :
suggesting a premium brand of alcohol when a brand is not specified by a customer selling an extended service contract for an appliance suggesting that a customer purchase a faster CPU, more RAM or a larger hard drive when servicing that customer's computer selling luxury finishing on a vehicle, such as leather upholstery suggesting a brand of watch that the customer hasn't previously heard of as an alternative to the one being considered suggesting that a customer purchase a more extensive car wash package asking the customer to supersize a meal at a fast-food restaurant, or adding extra toppings to a pizza using mobile check-in services to send upgrade seat or service offers to flyers
It can be hard to divorce all three techniques from each other, given that the difference in each technique is minor. All techniques adopted and effectively practiced within firms are important strategies that are used for increasing revenues among current customers. An add on sale can simply be defined as a sale of additional goods or services to a buyer. In practice an add-on sale can be seen in a retail scenario; a customer could be buying a suit for a new job, after the sizes and colours are to the customers satisfaction the seller would assume that they would also need shoes, socks, a waistcoat and a belt to go with. This is a sales technique where by the seller is trying to encourage or persuade the customer to buy something extra, that may or may not be more expensive, but will still bring up the total amount of the sale. An add on sale is much more simpler than a cross sell or an up sell, this is because the new item that the seller is exposing the buyer to may cost less than the product they are purchasing, however the downfall of this technique is that saying “no” to the product being presented is more frequent. Usually two for one deals or “buy one pair and get the second pair half price” deals are the most common ways to transition your sale to that of an add on. From a customers point of view, adding on can be seen as the seller trying to make the buyer spend more money to bring up the point of the sale. This is why adding on can be difficult, familiarity and relevance of suggestions is important, you want to make sure that the items being shown still match the customers’ initial thoughts and ideas. If they do not there is a high chance of losing the sale. As told in the Journal of Relationship marketing by Kamatura Wagner cross selling is valuable selling technique used by salespeople to increase the sale by transforming single product buyers to multi product buyers. Cross selling is a technique by which the seller will attempt to increase the value of a sale by suggesting an accompanying product. Suggesting related products or services to a customer who is considering buying something. Cross selling is mostly seen in restaurants or fast food joints, the terms “would you like fries with that?” or “would you like to up-size your order?” are examples of the cross-selling technique. Cross selling can be most effective when a customer is requiring assistance – where they come to you for the purpose of cross-selling. Since the customer has initiated the sale, the mind set would have already been on the firm and its products. This would make it easier for the salesperson to conduct the technique and have it be successful. An example of an over the phone cross sell could be that a customer has just switched banks and is getting her account set up with her new bank. After the account is created the bank teller would offer her the cross sell of signing up to their internet banking app that would allow her to access her account details and pay her accounts online. If cross-selling is properly done, it will be viewed as a service, rather than a sales pitch. A downside to cross selling can be seen as the same as that of up-selling. This main draw back is known as “over-touching” the customer which in simpler terms means, giving too many cross selling options can result in the customer ignoring the efforts given, and can desensitise the customer to future cross selling offers.
Information are taken from Wikipedia .
Cross-sell is the practice of selling or suggesting related or complementary products to a prospect or customer. Cross selling is one of the easiest and most effective methods of marketing.
-A sales representative at an electronics retailer suggests that the customer purchasing a digital camera also buy a memory card.
-The cashier at a fast-food restaurant asks a customer, “Would you like fries with that?”
-The check-out form at an ecommerce site prompts the customer to add a popular related product or a required accessory not included in the product being purchased.
-A new car dealer suggests the car buyer add a cargo liner or other after-market product when making the initial vehicle purchase. A clothing retailer displays a complete outfit so the shopper sees how pieces fit together and buys all the pieces instead of just one.
Cross-selling generally occurs when the sales representative has more than one type of product to offer consumers that might be beneficial to them. Some fields in which cross-selling is most evident include those of the banking and financial services industries. Banking customers may go into the bank and sign up for a checking account and later be sold various investment vehicles such as bonds or CDs as part of a retirement plan. Investment firms do much of the same, starting off clients within a specific investment product that they need and then later identifying additional needs that their company can meet on behalf of the client.
It can also include a company which just released or introduced a new product and taps into an existing customer database to find people who might be interested in buying this product. It is kind of a mix-n-match type of situation.