Fewer than 25 percent of organizations achieve their cross-selling objectives, based on our experience and independent studies.
Cross-selling is one of the most effective ways to increase revenue 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.
Sourcing additional revenue from a new customer depends on how your organization can provide the customer with more value.
It’s a no-brainer. If your customer is going to buy a solution, they might as well buy it from your company, making your business more efficient and increasing customer loyalty.
“The reason it seems that price is all that customers care about is that you haven’t given them anything else to care about “- Seth Godin.
Cross-selling is essential, but it is also an elusive goal for many B2B companies.
Four Significant Obstacles You Need to Address to Improve Cross-Selling
Four Significant Obstacles You Need to Address to Improve Cross-Selling
Fewer than 25 percent of organizations achieve their cross-selling objectives, based on our experience and independent studies.
Cross-selling is one of the most effective ways to increase revenue 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.
Sourcing additional revenue from a new customer depends on how your organization can provide the customer with more value.
It’s a no-brainer. If your customer is going to buy a solution, they might as well buy it from your company, making your business more efficient and increasing customer loyalty.
“The reason it seems that price is all that customers care about is that you haven’t given them anything else to care about “- Seth Godin.
Cross-selling is essential, but it is also an elusive goal for many B2B companies.
To break the code to successful cross-selling, here are four significant obstacles to address:
1. Cross-selling without a Playbook
Organizations assume that salespeople skilled in selling one solution can transfer their skills and knowledge to a broader product portfolio. Skill transfer expectations often fail if the sales teams face different buyers, buying processes, and buyer needs.
If the cross-sell effort includes strategic or more complex solutions, shaping the initial customer conversations makes or breaks the ability to advance the sales opportunity.
Guidance: Sales Playbooks are essential to guide and align the cross efforts of marketing, pre-sales, and the sales team.
2. Lack of Targeting
The battle cry often starts with “sell these solutions to customers that aren’t currently buying from us!” However, there will be a lot of wasted sales effort without an ideal customer profile to target. Which customers are most likely to buy? Do we have the rights contacts? What are the organizational characteristics of customers that are a good fit for cross-selling efforts?
Targeting is essential to identify which customers warrant the action to pursue cross-selling. For example, 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. Targeting efforts also force sales teams to think about what would be the next right thing to offer this customer, not just selling the same thing to everyone.
Guidance: Develop an ideal cross-sell customer profile and criteria to prioritize which accounts to apply the sales efforts.
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 commission potential doesn’t mean you need to increase incentives but may indicate that lower-cost sales resources (if they are available) should sell products.
Guidance: Compensation plans should drive the proper sales behavior. Review your compensation plans to ensure there are adequate incentives to support cross-selling.
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 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.
Guidance: Selling the entire product portfolio makes a lot of sense for many organizations. However, there is always a risk when salespeople sell both transactional and complex products. Start by evaluating what products salespeople should be spending most of their time selling. Chances are it will be higher-value complex solutions instead of transactional products.
Top management should continue to emphasize cross-selling as a critical priority.