Cross sale choices…big or small deal?

http://blog.vendoservices.com/vendo-blog/2015/01/16/2015115cross-sale-choices

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Occasionally we take a partner question, research the answer and share it here on our blog.

Question: “How much does the cross sale affect how much money the shopper spends? In other words, how much does it matter which products I do cross sale deals with?”

Answer: “More than you might think…”

As far as we know, there has never been an analysis of cross sales performed for the industry. Since we work with 80% of the leaders we had the data so we got to work.

Let’s focus on the results we got for one of the industry leaders. These results are for its main product, let’s call it Site X, over the past 12 months. They are one of the largest cross sale buyers in the industry.

Over the past year they purchased most of their cross sales from 6 different paysites (here we’ll call them Product 1 through 6). All are top 20 sites in the industry.

We averaged the amount paid by each consumer for each cross sale product. Let’s say it was $40 (it wasn’t – that’s just an example). Then we looked at how different cross sale products compared with the average (fake) $40.

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Here are the results of Site X purchasing cross sales from 6 different paysites. Cross sales purchased from 3 paysites were below average. Cross sales purchased from 3 paysites were above average. The difference between the lowest and highest amount spent by consumers was 44% (from lowest to highest). So, if it was $40 (which it wasn’t) the lowest would be $30 and the highest would be $48. Pretty big spread.

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What does this mean? Up to 20% of how much money a consumer spends (positive or negative) is determined by which paysite you buy your cross sale from.

Product 1          -24%

Product 2          -18%

Product 3           -6%

Product 4            8%

Product 5          20%

Product 6          20%

The answer is that among 6 top sites the value of the same product sold as a cross sale can vary by 44%.

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Next, we looked at it from the perspective of a cross sale seller. We looked at how much differences in the products you offer your customers affect how much money they spend on those products. We saw similar results. In some cases there were much bigger differences, up to 80%. The smallest effect we saw was 16%.

What does this mean? The products you choose to sell as cross sales have a major impact on how much your consumers spend.

The takeaway? Who you chose to partner with for cross sales affects how much the consumer spends. Your choice increases or decreases the size of the pie. It’s a big deal.

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