cross-selling

Cross-selling means to encourage the customer to purchase as many horizontal products within a product portfolio as possible (cross-buying). Horizontal products are defined as products from different product categories or business units.

The starting point for cross-selling is an existing business relationship in which a customer buys a specific product from a supplier. This is usually an “entry-level” or “core” product of the company. Within the scope of cross-selling, the supplier then aims to sell further products (add-on products) to the customer.

For example, a current account at a bank can be an entry product. Construction financing, investment advice or insurance services can then be sold to the same customer as additional products through cross-selling.

Another example from the mechanical engineering sector is the sale of the actual machine as a core product and the cross-selling of product-related services such as training.

Successful cross-selling can make a significant contribution to enable companies to realize the potential sales-related benefits of long-term customer relationships. Cross-selling can thus lead to an increase in sales while keeping the costs of customer processing constant and/or lead to a stabilization of the customer relationship, as the business relationship is based on a larger number of products.

The principal orientation of cross-selling can be characterized by the extent to which a customer has already covered his needs for the additional products. Two basic constellations can be distinguished: Firstly, a company can offer its customers additional products that the customers previously purchased from the company’s competitors. In this case, the aim is the displacement of competitors’ products. Secondly, a company can offer its customers additional products that they did not purchase so far (i.e. also not from competitors). In this case, the aim is the offer of complementary products.

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