When you try to increment your cross-selling you need to be careful about a handful of dimensions. But one that is key is profitability, as highlighted on the latest edition of Harvard Business Review.
Cross-selling may seem a marketer dream - you are expanding the size of your customers checks with you, without the cost of acquiring a new one. But that may actually be deceptive, as there are no free lunches - you will probably have to communicate or give incentives for that basket increase. My advice on cross-selling is:
- have a good and solid profitability analysis and carefully monitor cross-selling in-market performance. It is easy that in products with different profitabilities, one of them might mask the other's lower margin. So, think about this;
- ensure you have the right incentives to your sales people. Make sure that they are being measured in terms of profitability and not volume;
- make sure you are taking all costs of cross-selling in your analysis.
- focus on your consumer. Why would those products association make sense? What can we ensure our customer is winning with this association? Remember that consumer and customer should be at the centre - not your cross-sell intention. Don't start selling baby diapers because a 80 years old is buying baby food.
But don't be afraid to cross-sell. It may just be the right think to do. You just need to make sure you are not taking your eyes from the ball.
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