Why Increase Cross–selling?
Cross-selling involves purposefully marketing and selling additional value-added products and services to existing customers that complement what they have already purchased or are considering buying. Cross-selling is an effective business sales training technique designed to:
- Increase revenue
- Improve margins and profitability
- Expand average deal size
- Mitigate client churn
- Increase the lifetime value of a customer
- Decrease sales cycle time
- Reduce customer acquisition costs
- Add value to existing relationships
- Establish broader credibility
- Grow current accounts
- Deliver your brand promise
- Differentiate you from the competition
For example, a recent Bain analysis in the US telecommunications industry found that convincing just 10% of current customers to purchase just one more service was worth up to $480 million of incremental annual revenue. What are the economics for you and your sales team?
Assuming that your practice areas, products, and services can complement one other, success at cross-selling requires that a salesperson has the sales confidence, sales competence, and sales conviction to help customers see the value of adding on complementary products or services.
Examples include a car salesman encouraging you to buy a cargo liner after you have chosen your dream truck. Or a fast-food employee asking if you want fries with your burger. Or an eCommerce website recommending personalized additions to your cart before you check out. Or a law firm asking if you also need advice in an adjacent practice area.
A Mistake that Too Many Sales Leaders Make
Intuitively, cross-selling makes sense. Once you have won a new customer, why wouldn’t you try to sell them more stuff?
Unfortunately, too many sales leaders over emphasize the importance of winning new clients. The research makes it pretty clear that growing wallet share of existing customers is better, faster, and cheaper than acquiring new customers. According to Invesp:
- Acquiring a new customer can cost five times more than retaining an existing customer.
- Increasing customer retention by 5% can increase profits from 25-95%.
- The success rate of selling to a customer you already have is 60-70%; while the success rate of selling to a new customer is 5-20%.
So, smart sales leaders and manager focus on how to increase cross-selling to grow revenues and profits faster.
How to Increase Cross-Selling to Grow Faster
Every sales team would like to realize the increased revenue potential of cross-selling. Data from our sales leadership simulation assessments and our sales management training point to several factors required to do it successfully.
- A Value-Added Complement
The additional product or service must actually enhance or complete the purchase and provide a clear benefit that the buyer can recognize and appreciate. It must be easy to try, easy to buy, and be seen as a natural and value-added extension of the core purchase. Great cross-sellers understand what matters most to their target clients and are able to clearly articulate (in a “non-salesy” way) how key additional services relate to their success.
Can you bundle your products and services in an attractive and compelling enough way to your target clients?
- A Strong Customer Relationship
Trust is the basis for any meaningful relationship. Certainly, the stronger the bond of trust between a buyer and seller, the better chance the seller has of influencing the sales process. Strong relationships allow your sales team to present additional insights, products, and solutions early in the game to expand the purchase and to help your client succeed.
Are your customer relationships strong enough and high enough to allow cross-selling to thrive?
- Bandwidth, Offerings, and Executive Support
Do your salespeople have the competence, confidence, and bandwidth to focus on selling more than their core offerings or product? Sales teams need expertise, time, and options to cross-sell effectively. As sales leader, provide your team with a variety of products and services that fit well together and the knowledge of how they work in the eyes of your clients.
Then ensure that company executives are committed, both with intention and resources, to supporting a customer-centric cross-selling program. If you are not ready to commit to cross-selling as a company-wide strategic priority with all of the associated rigor and support, your chances for measurable change are low.
Are you willing to make this a strategic priority at the individual, team, and organizational levels?
- Consultative Selling Skills
Successful cross-selling requires increased business acumen and advanced consultative selling skills. Sellers must understand their buyer’s business priorities and how to fulfill them more completely in a way that makes sense. Top performing sellers focus on the customer’s unique situation and needs to help define value in the eyes of the customer.
They then use the customer-defined value to design a unique combination of performance and price to give the customer exactly what they want and need in order to succeed.
Does your sales team have the knowledge and skills to change the way they sell?
- Motivation
Compensation that truly incentivizes sellers to change their approach is complicated. Presumably, they already have a sales quota. What would encourage them to add in cross-selling? It may be more money, it may be special recognition, or it may be being seen as a team player.
Do your internal experts trust each other enough to win accounts together? Are you willing to tailor your sales incentives to create the right level of cross-selling motivation while simultaneously eliminating any areas of misalignment that would hinder your cross-selling efforts?
- Organizational Alignment
An us-vs.-them mentality and short-term quarterly focus combined with long-standing functional or practice are silos can make it difficult to create cross-selling mindsets and practices to maximize the long-term value of current client relationships. For cross-selling to take hold, everyone from the revenue generators to the service deliverers must believe that it is worth the time to learn about other offerings and worth the risk to share client data and introduce others into their accounts.
How are you helping to ensure that the potential individual risks of cross-selling are worth the organizational benefits related to winning more of a client’s wallet-share?
The Bottom Line
The more your products and services can be bundled to complement each other, the more value you and your sales team can realize from cross-selling. Successful cross selling reflects a synergy for your buyers where one offering enhances another. Just like referral selling, cross-selling is a great opportunity to increase revenue. Are you ready to increase cross-selling to grow faster?
To learn more about how to increase cross-selling to grow faster, download Are Your Sales Reps Leaving Money on the Table?
0
