Introduction to Cross Selling - A beginners guide

Introduction to Cross Selling

Cross-selling is a sales technique used to get a customer to spend more by purchasing a product that’s related to what’s being bought already.

Cross-selling identifies products that satisfy additional, complementary needs that are unfulfilled by the original item. For example, a comb could be cross-sold to a customer purchasing a blow dryer. Oftentimes, cross-selling points users to products they would have purchased anyways; by showing them at the right time, a store ensures they make the sale.

Cross-selling is prevalent in every type of commerce, including banks and insurance agencies. Credit cards are cross-sold to people registering a savings account, while life insurance is commonly suggested to customers buying car coverage.

Scope of Cross Selling

 The crossing selling can take place on the liability side (i.e. different kinds of deposit accounts) or on the asset side (i.e. loans for different requirements) or between the two. It could be at the initiative of the customers or a bank can implement it as a well prepared strategy. 

Benifits from Cross Selling

The main advantage is that the cost of a new customer's contract is far more than serving the existing customer (can be up to 3-4 times), on condition of reduced costs for the bank. Further, through cross selling the benefits of economics of scale are available to the bank, which reduce the cost further and increase the profits. Another additional advantages is that the cross selling helps in building brand value if the loyalty of the customer could be endured for the brand, as in the case the likelihood of shifting the business dealings to another organisation or bank by the customer, is much less.