Our last article had you up to speed with one of the basic musts of business, and our Marketing Consultants’ favourite tactic – up-selling. Its effectiveness should be obvious, so today we have decided to present another closely related sales tactic called cross-selling.
These 2 might as well be viewed as twins, because both generate more sales and profits requiring minimal or no investment. Again, the reason why every Business Advisor suggests cross-selling to their clients is best illustrated on the McDonald’s example.
Up-selling was a simple scripted sentence added at the end of the purchase dialogue. The McDonald’s employee asked the customer if they wanted the large portion of the product they initially ordered for a price that would lead the customer to perceive the obvious extra benefit.
In reality, the establishment made a minimal investment in both the larger-size product and the up-selling strategy to make a substantial profit. This idea is simply ingenious and shows why every business, including your own, should be using it. Cross-Selling is very similar and equally effective.
The difference from up-selling is that cross-selling would not offer a bigger purchase or quantity of the same product, but a complementary product that is related to the initial order. In the case of a McDonald’s restaurant, the cross-sell would involve a portion of French fries or a soda.
The cross-sell is performed at the same time an up-sell is – while the customer is in the “buying mode”. What would make a cross-sell even more effective is of course an obvious added value that is, perhaps, not so apparent in the McDonald’s case.
The fast food restaurant situation explains the magical simplicity that allows you to sell a product that the customer did not initially want, but then realised they do. What would make the cross-sell even more effective is to offer the related product at a discount price.
Let’s say you want to buy a pair of sunglasses, and at the very end of your purchase, you are offered a choice of a high-quality cleaning cloth for half its usual price. You are more likely to perceive the necessity of the product at this time along with the added value of the discount price.
With our Business Consultants here at CFO Advisory, the reality is that you had a satisfied customer and made considerable profit, because the complementary product cost you very little to begin with, and the cross-sell absolutely nothing.
