The psychology of cross-selling: how to influence customer behavior

The best way to increase your conversion rate is to understand the way your customers think. 

Cross-selling, in particular, is an effective method used by direct-to-consumer (DTC) brands to increase revenue and customer loyalty. It involves making personalized recommendations for complementary products or services to customers. So, it makes sense that cross-selling has a psychological basis that actually makes it quite effective in driving sales.

In this blog post, we’ll go over some basic psychological principles that can influence consumer behaviour and how to use these to inform your cross-selling strategy.

The psychological principles

There are four main psychological principles that we’ll go through to guide how merchants can make the most out of their cross-sell offerings to their customers:

1. The principle of consistency
2. The principle of social proof
3. The principle of scarcity
4. The principle of personalization

1. The principle of consistency

The principle of consistency is a psychological concept that suggests people tend to behave in ways that are consistent with their past actions, preferences, and commitments. In the context of cross-selling, if a customer has already made a purchase, they are more likely to make another purchase that is consistent with their previous choice. 

For example, if a customer buys a pair of shoes, they are more likely to buy shoe care products or socks. This principle is used by ecommerce brands to make targeted cross-selling recommendations to customers.

2. The principle of social proof

The principle of social proof is another psychological concept that explains why people tend to follow the crowd. People are more likely to buy products that have been recommended by others, especially those they trust. 

Ecommerce brands use this principle by showing social proof in the form of customer reviews, ratings, and recommendations. In more recent years we have seen this with the rise of user-generated content (UGC) and influencer marketing.

3. The principle of scarcity

The principle of scarcity is based on the idea that people tend to place a higher value on things that are rare or in limited supply. Ecommerce brands use this principle to create a sense of urgency and encourage customers to make additional purchases. For example, offering a limited-time discount on a complementary product can prompt customers to make a purchase they might not have made otherwise.

4. The principle of personalization

The principle of personalization involves tailoring recommendations to individual customers based on their preferences and past behavior. Ecommerce brands use this principle by analyzing customer data to make personalized cross-selling recommendations. By doing this, they can increase the relevance of the suggestions and make customers feel that the brand understands their needs.

Cross-selling recommendations for DTC brands based on the principles 

With these principles in mind, there are some practical things you can action on. 

Gather data & segment customers

The best way to understand the way your customers think is to ask them firsthand through surveys and collect data on their behaviour through analytics. With iOS changes, it’s more important than ever to have access to data around your customers, and to use that data to personalize your strategy—including your cross-sell recommendations. 

Utilize product reviews & consider UGC

Leverage product reviews and UGC to showcase credibility behind your product recommendations. When you showcase real reviews from real customers and put your products in the hands of strategically chosen influencers and UGC creators, social proof can be exceptionally strong in tipping a customer toward a specific product or purchase choice. 

Consider time-bound campaigns

While the days of popups and timers may be largely behind us, you can still enable the principle of scarcity through time-sensitive campaigns. Seasonal deals and limited time offers generate the same sense of urgency to customers who are in a contemplative phase or purchasing mood.

Consumer behaviour is the compass

By understanding the psychological principles behind cross-selling, brands can create targeted and personalized recommendations that are more likely to result in additional purchases. Within ecommerce and the DTC world, psychology is actually a major driving force behind the success of marketing strategies. Brands need only remember that their customers are their true North Star.