How can you use loyalty programs to cross-sell complementary products or services?

1 Benefits of cross-selling

Cross-selling can benefit both you and your customers in several ways. First, it can increase your average order value and customer lifetime value by encouraging more spending and retention. Second, it can improve your customer satisfaction and loyalty by providing solutions to their needs and problems. Third, it can strengthen your brand image and reputation by showcasing your expertise and variety of products or services.

2 Types of loyalty programs

You can use different types of loyalty programs to cross-sell, depending on your goals and preferences. Points-based programs allow customers to earn points for every purchase or action taken and redeem them for rewards or discounts. Cash-back programs provide customers with a percentage of their purchase amount as cash back. Membership programs involve customers paying a fee to gain access to perks, discounts, or privileges. You can cross-sell by offering more points, cash back, perks, discounts, or features for buying certain products or services. Additionally, you could create tiers or levels that unlock more benefits or options.

3 Best practices for cross-selling

To cross-sell effectively with loyalty programs, you should follow certain best practices to ensure your success and avoid alienating customers. Firstly, it is important to understand customer needs, preferences, behaviors, and feedback. Utilize data and analytics to segment customers and personalize offers and recommendations based on their profiles and purchase history. Additionally, identify products or services that are complementary, relevant, and valuable to customers. Highlight the benefits and features that solve their problems or enhance their experience. Furthermore, choose the right moment to cross-sell depending on the customer journey and the type of product or service. Finally, don’t be too pushy or aggressive with your cross-selling. Respect customers' choices and preferences, give them the option to opt-out or decline offers, and don’t spam them with too many messages or notifications.

4 Examples of cross-selling

To inspire you, here are some examples of how businesses use loyalty programs to cross-sell. A coffee shop may offer double points for buying a pastry or a sandwich along with their drink, or allow customers to redeem their points for merchandise or gift cards. An online retailer may give customers a higher cash-back rate for buying products from a certain category or brand, or give a bonus credit for spending over a certain amount. A gym may provide discounts or free trials for personal training, nutrition counseling, or massage therapy, or add online classes or videos to the membership.

5 How to measure your cross-selling

To evaluate the effectiveness of your cross-selling with loyalty programs, you need to measure some key metrics that will show you how well you are achieving your goals and objectives. These include the average order value of customers who buy cross-sold products or services compared to those who don't, the customer lifetime value of customers who buy cross-sold products or services compared to those who don't, and the degree of satisfaction and loyalty expressed by customers through feedback, ratings, reviews, referrals, or retention. You can measure how your cross-selling affects your customer satisfaction and loyalty by using surveys, testimonials, net promoter score, or churn rate.