Cross-selling is one of the most effective ways to increase sales, just because it’s easier to sell to existing customers than new ones. You’ve already gained their trust, and they’ve committed to at least one purchase. Most of the hard work is already done. From there on it’s just a question of how you can provide the customer with more value.
It’s a no-brainer. If your customer is going to buy them anyway, they might as well buy it from your company, which should make your business more efficient and increase customer loyalty.
Cross-selling is important, but for many companies, it is also an elusive goal. In our view, there are four major obstacles as to why cross-selling initiatives fail:
1. No Account Planning – Account planning is critical to identify which customers warrant the effort to pursue cross-selling, and when the effort should be deployed. Cross-selling may not be appropriate if your customer is in a fast-growth mode with your current solutions, or if you are having service or operational issues. As well, Account Planning forces you to think about what would be the next right thing to offer this customer, not just selling the same thing to everyone.
2. Buyers are different – For example, the persons buying IT hardware may not be the persons buying software or telecommunications equipment. Salespeople may not have the expertise and experience selling to different buyer roles, so the appropriate sales support or training must be provided if they are to be successful.
3. Compensation does not encourage cross-selling – Too often ideal products or solutions for cross-selling may have lower revenue or profit potential, and thus lower commission incentive potential. Lower commissions do not mean you need to increase compensation, but rather an indication that some of the cross-sell products need to be sold by a lower-cost sales resources.
4. Cross-selling the wrong products – If your sales team primarily focuses on strategic or complex products and solutions, asking them to cross-sell transactional or low revenue products can negatively impact your buyer relationships. For example, if your salespeople sell medical devices for complex medical procedures, asking them to sell surgical consumables may require them to work with commodity buyers that are focused on getting the lowest price. Once you play in the commodity game, other buyers may expect the same pricing behavior from your complex products.
Despite the obstacles outlined here, there is no good excuse for top management not to emphasize cross-selling as a critical priority. However, by focusing on addressing the obstacles, cross-selling success can be ensured.