Cross-sell or Die: Get More Sales in the iPhone App Store

March 30, 2009
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Peter Farago
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The glut of applications in the App Store has made application discovery a top concern among companies releasing iPhone games and apps. Last week, 148 Apps reported that more 30,000 games and applications are available in the store, already 5,000 more than the 25,000 announced by Apple when it previewed its iPhone OS 3.0 software on March 17.

With rampant competition, companies must leverage every customer contact point to increase sales. This is where cross-selling can help. Cross-selling targets a company's existing consumers to sell them additional products. On the iPhone, the best opportunity is from within a downloaded application, usually with a link to other games or applications included on the menu screen.

While cross-selling theoretically has been around since the beginning of business, it has become far more effective since the advent of e-commerce on the Internet. In addition to allowing a consumer to quickly and easily complete a follow-on purchase, it can be tracked, measured and tuned for maximum impact.

Since cross-selling is such a classic marketing tool, not to mention easy to execute on the iPhone, we were surprised to observe several developers either not doing so, or treating it as a rushed after thought. So we took a look into our data set to ask: how well does cross-selling work on the iPhone?

The short answer is that it can be highly effective, and the following example demonstrates just how effective. After three weeks of strong sales in the App Store, sales began to decline for Company X's first application. When the second application was released, it included a strong call-to-action to purchase the first application. As the graph below shows, strong sales of the second application, along with solid cross-sell conversion, reversed declining sales of the first application.

It is worth noting that these two applications benefitted from sharing a similar target audience to which both products appealed, and that the efficacy of cross-selling efforts can vary. However, whether your application can achieve a similar lift from cross-selling is something you won't know until you test and measure it for yourself. As all markets mature - and the iPhone App Store has matured in record time - it is important to think strategically about growing your business by maximizing every precious consumer point of contact. Cross-selling remains among the most effective marketing tools.