Cross Selling Techniques

Cross-selling is a very simple sales technique. If you’ve made a sale to a customer and you have other products they may be interested in, it’s simply selling them the additional products too. Ask premiercallcentre.co.uk to walk you through our Cross Selling Techniques, we can help you check everything for this criteria.

In terms of the benefits of Cross Selling Techniques, it is a very time and labor efficient way of selling as the customer already has the trust in you as a salesperson and a business.

Most businesses know how much it costs to acquire a new customer, so cross-selling has significant cost savings. And for the customer, it can often be better to limit their dealings to as few providers as possible, so if you offer another product or service they need, it can be beneficial for them too.

Cross-selling is defined by the Oxford English Dictionary as "the action or practice of selling among or between established clients, markets, traders, etc." or "that of selling an additional product or service to an existing customer". In practice businesses define cross-selling in many different ways. Elements that might influence the definition might include: the size of the business, the industry sector it operates within and the financial motivations of those required to define the term.

The objectives of cross-selling can be either to increase the income derived from the client(s) or to protect the relationship with the client(s). The approach to the process of cross-selling can be varied. Unlike the acquiring of new business, cross-selling involves an element of risk that existing relationships with the client could be disrupted. For this reason it is important to ensure that the additional product or service being sold to the client(s) enhances the value the client(s) get from the organization.

Cross-selling generally refers to selling items that are related or can be integrated with the item being sold. Rather than simply trying to get as much out of the customer as possible, cross selling can be a demonstration that you understand and care about their needs, and can suggest other items that will help them.

For that reason, for the good salesperson, many cross-selling opportunities will arise naturally. Don’t, therefore, offer a lot of unrelated products since the customer will realize their needs are not being taken into consideration.

If you keep the customer’s needs in mind, you will benefit them, making them a more likely repeat customer, and maximize the potential of each sell.

Examples of cross-selling are all around us. Do the words ‘Do you want fries with that?’ sound familiar? Or what about online bookshops such as Amazon who tell you that the other people who bought that book also bought War and Peace and the autobiography of Victoria Beckham? Or perhaps you once bought some new shoes and came away with the shoe polish too. As you can see, cross-selling can serve a practical purpose for the customer too.

For cross selling to be effective it demands some relationship between the products concerned: for example, the buyer of one may have an obvious need for the other at the same time (so estate agents can cross sell mortgages to house buyers) or the products involved may sell to the same general market. It is also possible to cross sell products that appeal to the same demographic groups (e.g. same age groups, income levels, social grades etc.).

As cross selling can lead to savings on very significant overheads such as advertising, sales forces and retail space it can be a significant source of saving. Where the potential from cross selling is not proven (as in a proposed acquisition), investors do well to be sceptical. Points to consider include the existence or not of examples of the successful cross selling of similar product combinations and whether the target markets for two products are really the same.

Cross-selling of professional services

Benefits that can accrue to the customer include the efficiency and leverage that result from using a single supplier for multiple products. When buying complex professional services, like consulting needed to make and integrate an acquisition, using one firm reduces the finger pointing that is common when a problem occurs in an area that straddles two or more services; if only one firm is responsible, finger pointing is eliminated. For the vendor the benefits are also substantial. The most obvious example is that revenues go up. There are also efficiency benefits in servicing one account rather than several. Often most importantly, vendors that sell more services to a client are harder for a competitor to displace. The more a client buys from a vendor, the higher the switching cost.

Though most companies want more cross-selling, there can be substantial barriers, including

   1. A customer policy requiring the use of multiple vendors.
   2. Different purchasing points within an account, which reduce the ability to treat the customer like a single account.
   3. The fear of the incumbent business unit that their colleagues would botch their work at the client, resulting with the loss of the account for all units of the firm.

Broadly speaking, cross-selling takes three forms. First, while servicing an account, the product or service provider may hear of an additional need, unrelated to the first, that the client has an offer to meet it. Thus, for example, in conducting an audit, an accountant is likely to learn about a range of needs for tax services, for valuation services and others. To the degree that regulations allow, the accounts may be able to sell services that meet these needs. This kind of cross-selling helped major accounting firms to expand their businesses considerably, and because of the potential for abuse, this kind of selling by auditors has been greatly curtailed under the Sarbanes-Oxley Act.

Selling add-on services is another form of cross-selling. This happens when a supplier shows a customer that it can enhance the value of its service by buying another from a different part of the supplier's company. When you buy an appliance, the salesperson will offer to sell you insurance beyond the terms of the warranty. Though common, this kind of cross-selling can leave a customer feeling poorly used, the customer might well ask the appliance salesperson why he needs insurance on a brand new refrigerator. Is it really likely to break in just nine months?

The third kind of cross-selling can be called selling a solution. In this case, the customer buying air conditioners is sold a package of both the air conditioners and installation services. The customer can be considered buying relief from the heat, contrary to just air conditioners.

Keys to Achieving Cross-Selling Success

When developing a cross-selling program, it is critically important that everyone in the organization buys into the philosophy and fully participates in the program. The foundation of every successful cross-selling program is rooted in a strong incentive system based on personal recognition and financial reward.

Because of the complexity, there also needs to be a standardized software tracking system in place to monitor compliance and coordinate cross-selling activities between specialists. The true value of any sales program can only be measured through the customer's eyes. Steps should be taken to actively survey customer satisfaction throughout the process. Once a company links specialists, business processes and data they make it easy for their salespeople to act on behalf of their customers.

Companies that fail to implement an effective cross-selling program actually do a disservice to their customers and in effect, leave the back door open to their competitors!

1. Sell first; tell later. Do not attempt to up-sell or cross-sell until you have fulfilled the first order. Trying to sell additional items too early can endanger the original sale.

2. The rule of 25. The value of any additional sale should not increase the overall order by more than 25%.

3. Make a profit. The extra items sold must make enough profit at least to cover the cost of the additional time spent in selling them. But this should not be calculated over a short time frame. Most cross-selling fails because companies think only of the next bottom line. They cannot resist trying to sell the highest-margin product rather than the most appropriate one.

4. Don’t dump junk. Resist the urge to use cross-selling to move unwanted stocks.

5. Limit and relate. Limit the add-on items to those that clearly relate to the original purchase. If a customer is buying a blazer from a catalogue, suggesting a shirt and tie makes sense; suggesting a garden hose does not. Much cross-selling of financial services fails because firms try to sell inappropriate products at inappropriate times.

6. Familiarity breeds success. The more familiar customers are with the add-on item, the more likely they are to buy it. Cross-selling is not the occasion to introduce a brand new product. Misdirected marketing at such times can turn clients away in droves.

7. Plan, plan, plan and plan again. Decide in advance, for instance, which products each additional item can be related to.

8. Train to avoid pain. Make sure that the salesman thoroughly understands the products or services being offered.

9. Test with the best, then roll with the rest. Test cross-selling first with the best salespeople. They have the drive and initiative to smooth out any of the kinks.

10. E = MC2. A cross-selling effort (E) is directly dependent on how motivated (M) the salesmen are. Compensation (C) is always a critical factor in selling, as is another word beginning with C—control.

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