What is cross sell rate and how does AI help improve it?

Natalie Smithson
AI enthusiast | Tea addict | Focused on using AI assistants to win the working week

What is cross sell rate?

The cross sell rate measures how effectively you sell additional products or services to existing customers. This metric helps pinpoint opportunities where customers can benefit from complementary goods or services to boost your revenue and enhance customer satisfaction.

Imagine a scenario where a customer who recently bought a laptop is also interested in buying a laptop bag. Cross selling the two items can help your customers and enhance their overall experience, while also fuelling sales growth.

How do you calculate your cross sell rate?

Calculating the cross sell rate is relatively straightforward. To derive this metric, you divide the number of customers who bought both products by the total number of customers who made a purchase. For instance, if out of 100 customers who bought a laptop, 30 also bought a laptop bag, the cross sell rate would be 30%.

Why does the cross sell rate matter?

The cross sell rate helps identify customer preferences and purchasing patterns. By analysing this metric, you can tailor your offerings, improve customer engagement (even on a tight budget), and drive revenue growth. Cross sell rate can guide your business strategy and allow your teams to give personalised recommendations that enhance the customer experience. For example, by using AI chatbots to suggest complementary products based on past purchases, you can increase sales while growing customer loyalty.

What is a good cross sell rate benchmark?

A good cross sell rate benchmark typically varies across industries, but the common objective is to continually improve the percentage over time. By monitoring industry standards and competitor benchmarks, you can set achievable goals and aim to surpass them. Regularly tracking and analysing the cross sell rate can help your teams identify areas for improvement and put in place strategies to enhance performance.

Rethinking CES strategies to suit the age of AI

Cross selling is far easier when you use AI, for many reasons:

  • You can reach customers instantly at the checkout since an AI assistant can pop up whenever they make a purchase to promote complementary products
  • You can get instant feedback on your cross sell offer and improve it or change it if customers aren’t convinced it’s the most valuable or relevant choice for them
  • You can get to know your customers better with an AI assistant since it transforms your insights, giving you increased knowledge about what customers want and so what cross selling offers are most likely to be successful
  • You can personalise every cross selling offer, since an AI assistant remembers everything your customers have bought in the past, plus their habits and behaviours
  • Your customer can use conversation to browse, like they would in a bricks and mortar store, asking your assistant highly specific questions about products or services
  • You can cross sell in real time as the customer is actively placing items in their basket ― say someone’s buying a laptop, you can offer a laptop bag for it within the chat window

With this in mind, your cross selling strategy can change significantly with the use of AI. If you launch an AI assistant, it will be helpful to compare your cross sell rates before you started using AI to power decisions and after, so you can note the difference. Then continue to work on improving your cross sell rate as you scale your AI automation and feedback channels.

Our AI assistant helps us capture vital intelligence to improve the services that really matter to our customers. For example, data demonstrating that parking is the most popular topic right now, helps us make the relevant changes and allocate resources more effectively.” ~ Andy Cooper, Customer Services Manager at Coventry City Council

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FAQs

How can AI-enhanced cross-selling improve customer engagement?

AI enhances cross-selling by offering personalised product recommendations and getting instant feedback on offers to transform customer insights. With AI, you can engage customers effectively at the checkout, tailor offers to individual preferences, and optimise cross selling strategies based on real time engagement data.

Why is it essential to track and analyse the cross sell rate over time?

Tracking and analysing the cross sell rate over time helps you monitor performance, identify trends, and measure the effectiveness of your cross selling efforts. By understanding customer preferences and purchase behaviour, you can refine strategies, improve sales performance, and enhance the overall customer experience to drive revenue growth.

What role does personalised cross-selling play in customer satisfaction?

Personalised cross-selling based on AI-driven insights can improve your customer satisfaction score by offering relevant product suggestions tailored to individual preferences. By providing personalised recommendations, you demonstrate understanding of customer needs and a customer service mindset, growing trust and loyalty in your brand. This approach not only drives sales but also strengthens customer relationships, leading to long-term brand advocacy.

What are the key challenges businesses may face when implementing AI for cross selling strategies?

When integrating AI for cross selling strategies, businesses may encounter challenges like data quality assurance, system integration complexities, building customer trust in AI recommendations (especially where you must introduce the use of large language models LLMs safely), and making sure staff are aware of all the opportunities and how to make best use of them.