It is generally acknowledged that the approximate cost for acquiring a new client is 5 to 8 times more than retaining a current relationship. By applying this in the disrupted marketplace, it is logical to assume that, to increase market share, we need to cross-sell new products or services to existing clients.
Clients will also benefit from a lower cost of engagement, with greater economies of scale, by using new capabilities from existing suppliers they already trust.
Why cross selling fails?
With all this positive intent, why do cross-selling initiatives generally fail? Cross-selling fails because it is focused more on the selfish desire of the seller, than on the needs of the client.
In addition, many sales people are resistant to cross-selling because it is inherently risky. At a one-on-one engagement level with a client, there is little upside for a seller to bring a colleague to an existing client relationship for, if things don’t go well, the relationship is unnecessarily jeopardised.
This disrupted business environment means you will need to develop a strategy targeting existing clients that aims to unlock budgets in order to invest in your new products or services.
Watch: Cross-selling strategy essentials (3:36)
3 practical considerations to act on are:
1. Problems you solve: Develop a list of common problems that your organisation can best solve. Focus on the few counter-cyclical offerings that best solve these problems as your starting point (i.e., ones that save money, reduce risk, or meet a compliance issue).
2. Access to Clients: Develop a list of key contacts, who work for existing clients, who would be most receptive to exploring these issues. Identify the other key players who will need to be involved and the issues that are important to them. Pay particular attention to gaining access to the person who can create or unlock the budget for solving any problems that are uncovered.
3. Develop your cross-selling strategy: plan for each of your existing clients based on the spectrum of problems and opportunities that you’ve identified and the priorities as indicated by your client. ie concentrate your efforts on the intersection of the problems you solve, with the client contacts that care about them most.
One method to judge if you have been genuinely client-centric in your intentions is to ask yourself:
can I share my account plan with my client?
The real challenge is that our marketing message and sales team skills have been honed over the growth years to discuss the features and capabilities of our offerings. This has to be changed – the focus has shifted to the client. The conversation must be executed with a focus to uncover and develop new needs with existing clients. These new needs have to link directly to the offerings you can best deliver to the client. Your top sales people are already doing this intuitively.
One of the most effective tools for cross-selling is to boil down what the best sales people and product specialists are doing in these interactions – i.e., develop a Playbook or Battlecard for each product or service offering to help the lesser performers in your sales team develop client-centric conversations around the client’s challenges and issues.
If your sales organisation is galvanised to focus on the client’s issues and opportunities, whilst avoiding pushing products or services,
cross-selling is as simple as the waiter asking if you want a salad to go with your main course.
We expect clients will welcome any visible demonstration that you are aware of their needs. They will value you helping them to explore and develop solutions that best meet and care about their satisfaction levels in using your new offerings. Improving your cross selling success will, no doubt, lead to an increase in market share and a lower cost of sale.
As your competitors wake up to this reality, effective cross-selling will remove the barrier of entry to them doing new business with your existing clients.
Notes
1. The ‘New Normal’ is a term used to define a new and fundamental business model that has emerged as a result of the Global Financial Crisis (GFC). The ‘New Normal’ is driven by changing client values with a focus away from the Easy Debt-fast Growth models of the past.
As you look to grow revenues in tough times, here are six potential strategies to consider for your organisation:
- Weather the storm
- Do less, get more
- Lower risk, not price
- Gain a premium price
- More promotions and campaigns
- Cross-selling (this strategy)
Choosing a Growth Strategy (3:48)
