About  |  Careers  |  Contact  |  Investor Relations  |  Locations
Internet Banking Login

Enroll in Internet Banking

Forgot User ID/Password?

User Tutorials

Find a Location Live Chat Submit Service Request Customer Feedback
Business Resource Center CommonCents Financial Wellness CommunityCents
Online Coupon Book
Fraud Prevention and Online Security Other Online Services

Calculators Credit Card Account Access Current Rates FDIC Info News Order Checks TrueNorth Travel Club

Use Cross Selling as a Low-Cost Way to Increase Revenue


Download past articles:

Financing Growth

Exclusive Tips to Financial Success

How Debt Can Become an Asset to Your Business

Packaging a Successful Loan Application

Pay Yourself First

Live Your Dream with the Right Small Business Financing

Leasing Commercial Space

Pricing Your Product or Service

Get the Loan You Want

One way to increase revenue without incurring additional costs is to sell more to your existing customers. Finding new customers requires advertising and a major investment in time and energy. Selling more to your existing customers gives you the additional revenue without the costs of customer acquisition. Cross selling adds those additional sales to existing orders. You don’t even have additional order processing or fulfillment costs.

First, decide on the products involved. Cross selling consists of persuading a customer to buy an extra product in addition to what he was going to purchase. Typically this means offering him an inexpensive product that he will need, based on his major purchase. You’ll have to identify the major products you are selling and pair them with linked products that cost about ten to twenty percent of the main product. The less expensive product should be one that the customer is going to have to buy anyway. Ideally it is something that he normally buys from another supplier so that you are not merely cannibalizing future sales.


Then decide on pricing. Some companies sell the less expensive linked products at a high mark-up. They make the sale based on offering the main product at a very low price, and then make their profit on the cross sale. This strategy reduces potential additional revenue, as some customers will not take the offer. It also risks alienating customers if they become aware of having paid too much for the less expensive product.

A better long-term strategy is to offer the cross sale at a discount. Since you are saving order processing and fulfillment costs on the less expensive product, you can afford to offer a discount while protecting your overall profit margin. This strategy will maximize revenue, as almost all customers will take advantage of a well-designed cross sale. In addition, it cements customer loyalty by rewarding them with a discount that does not cost you anything.

Finally, you have to decide on the mechanism for offering the cross sale. Typically you or your salesmen suggest the additional purchase right after the customer has decided to buy the main product. If the cross sale is attractive, it can be used as a sales tool in itself, and should be mentioned even before the customer has decided on the purchase. In any case, using cross selling as a part of your business can increase sales by ten to twenty percent without substantial effort or costs.

 

ID Theft  |  Privacy & Security  |  Site Map  |  800-442-6666
© Copyright 2005-2013 Northway Bank. All rights reserved.