Posts

Cross Selling: Part 3 of 3 – How to Get It Right

/2 Comments/in , /by

This is part 3 of a three-part series. If your organization offers multiple service offerings, you may find this series of interest.

Part 1 – What’s at Stake

Part 2 – What Goes Wrong

Part 3 – How to Get it Right

In Part 1 I said that cross-selling was the single biggest growth opportunity for sales. In Part 2 I listed six ways cross-selling efforts go wrong. Let’s now talk about getting it right.

Good cross-selling boils down to One Core Concept: the scarce resource is not content, it’s relationship.

Most sellers view cross-selling as matching up an internal content expert with a potential buyer on the client side. This typically has bad consequences. It plays out in “the business card scenario.”

The Business Card Scenario

Picture this conversation:

Seller (Bob): Josephine, in our work with you at XYZ, we’ve noticed that there are some widget-related issues. If you like, we’ve got some people who are experts in widgetry – I’d be happy to introduce you to Bill. Here’s his business card.

Buyer (Josephine): Thanks Bob, I’ll keep that in mind. Let me think about it.

Put yourself in Josephine’s place. She is being asked to take several propositions on faith – to trust Bob. First, she’s being asked to trust that Bob (the seller) is competent to assess an issue of widgetry (and he’s probably not). Second, that Bob is competent to recommend Bill. Third, that this fellow Bill is himself competent at widgetry and would understand it in the context of Josephine’s business.

That’s a lot to ask! Unless Bob already has a superb relationship with Josephine, he has just asked her to ‘trust me’ without giving her any specific reason to do so.

Meanwhile, back at the office, Bob meets Bill, his firm’s internal expert: it sounds like this.

Seller (Bob): Bill, I gave your business card to Josephine, a buyer at our XYZ client. I think they’ve got some widget issues you could be great at.

Expert (Bill): Great, I’ll look forward to her call.

Which call, of course, frequently never comes. Funny how that works.

Now put yourself in Bill’s place. You’re being asked by Bob to trust several propositions as well. First, that Bob knows enough about widgetry to have successfully identified a widget issue. Second, that Bob has appropriately and fairly described you and your capabilities (and hasn’t underpriced you!). Third, that Josephine is competent on issues of widgetry. And fourth, that Josephine actually wants to talk to you.

In the Business Card scenario, Bob has successfully drawn down on his trust relationship with both his client and his internal expert, asking them in seven distinct ways to trust him.  And, asking people to “trust me” is a good way to actually destroy trust.

Notice the baseline assumption in the Business Card scenario. It assumes that the critical scarce resource is expertise in the area of widgetry. ‘If only we could get the widget expert in touch with the owner of the widget problem, all will be well.’ That is the operative assumption – and it is false.

Three Steps to the Real Issue

The real scarce resource in cross-selling is not matching up expertise with problems – it is ensuring the continued strength of the relationship such that it can survive the introduction of a third person. Here’s how it’s done, from the point of view of Bob, the seller.

Step 1a. Jointly refine the problem definition. Bob (the relationship owner) does not have to be an expert in widgetry; all he has to know is enough about widgets to intelligently define the business issue. The client knows Bob is not a subject matter expert and is OK with that – but wants to know that Bob “gets” the business case.

Step 1b. Re-affirm the client relationship. Bob discusses with Josephine (the client) what an outside expert like Bill might bring to the game. Bob assures Josephine that he will be at the first meeting, and continually available to ensure the hand off is being done well.

Step 2a. Ask the expert to make you just smart enough. Again, Bob does not have to be an expert in widgetry – he just needs to know enough to ask the right questions.

Step 2b. Reaffirm the internal relationship. Bob must assure Bill that he will get him whatever information or perspective he needs before meeting with Josephine, and that Bob will be at the first meeting, and continually available thereafter.

Step 3. Iterate as necessary. Bob must go back and forth between Josephine and Bill to ensure that each is comfortable about the problem definition, expectations, and that Bob will continue to play the same trusted advisor role he played with each client prior to this meeting.

Thinking Right about Cross-Selling

Bob thought his job was to match a technical need. And so he abdicated the responsibility for framing and owning the problem, and for making both Bill and Josephine feel his commitment to their relationship.

We too often think of cross-selling as like a data query – trying to guess at a solution to a problem from afar. But that’s hard – like throwing darts with mittens. You’re not an expert in either the content or its application to the business.

Instead, think of cross-selling as like setting up friends on a date. The date may or may not ultimately work out, but you want to make the process as comfortable as possible for each party. You want each of them to:

  • know something about each other ahead of time
  • have a basis for conversation so they can hit the ground running
  • feel an easy, legitimate ‘out’ in case the fit isn’t right
  • know that you are committed to your pre-existing relationships with them regardless of how this particular connection works out.

If you handle cross-selling in this manner, you will not need to draw down on trust. In fact, you will increase the amount of trust that each party has in you – because you have placed the relationship ahead of the solution or the sale.

Done right, cross-selling not only works, it builds trust in the process.

Cross-Selling: Part 2 of 3 – What Goes Wrong

/2 Comments/in , /by

This is part 2 of a three-part series. If your organization offers multiple service offerings, you may find this series of interest.

Part 2 – What Goes Wrong

In the first part of this series (link above) I suggested that “cross-selling done right represents the lowest cost-of-sales approach to growth.” Not ‘one of’ the lowest – the lowest.

And yet – I find massive inertia at best, and resistance at worst, to cross-selling.

If you’d like to reap the benefits of cross-selling, you’re going to have to grapple with the underlying causes of what’s kept you from it to date. There are three underlying barrier causes, and you can suffer from more than one of them. See which one best describes your situation.

Objection 1. Cross-selling is too complicated for us.

You may be thinking, “It’s hard enough to master the complexity of one product or service – we just don’t have the time or budget to cross-train everyone in everybody else’s offering.”

Or, you may think, “It’s tough enough already getting access to our clients and avoiding channel confusion; adding in the complexity of multiple salespeople from the same company calling on the same client people would just be over the top.”

Objection 2. Cross-selling is crass, overt and unprofessional.

You may be thinking, “We can’t go walking the halls with order sheets – our relationships are built on quality content, client service and trust, not on acting like hustlers.”

Or, you may think, “Cream rises to the top. There’s no harm in occasionally asking a client to put in a good word, but making a self-serving goal out of it actually hurts our image, not helps it. It amounts to asking our clients to become salespeople for us, and that demeans them and cheapens our image.”

Objection 3. We already know how to do this.

You may be thinking, “Networking within the client organization is something we do naturally. We don’t need special training to do something that got us in in the first place, we just need a little more time.”

Or, you may think, “It comes from knowing the client, and knowing how far and how fast you can push things through the organization. You can’t just barge into a situation and demand total access, there are human relationships you need to work through, and trust takes time.”

Handling the Objections.

All three of those objections (and note they’re internal objections, phrased by us in our own heads in fear of speaking to clients, rather than by clients themselves) are false. Here are the headlines:

It’s too complicated.

Myth: you have to understand all your organization’s services in order to cross-sell them.  Not true – you only have to understand them well enough to define the problem. (See part 3 in this series for how to do it).

Myth: you will cause channel confusion. Not true – if you actually have a solution. More confusion would be caused by bringing in another seller than by using you. 

It’s crass and unprofessional.

Myth: a buyer-seller relationship is inherently distasteful for the buyer. Not true – a buyer whose problems are addressed and who is treated with respect is a buyer who is delighted to buy. It’s how you do it that matters. (See part 3 in this series for how).

Myth: our clients don’t want to help us sell. Not true – if we have solutions that will help our clients’ fellow employees, they are proud to be associated with us and help us help their organization. 

We already know how to do this.

Myth: Cross-selling is no different from ongoing business development. Not true – by definition, you are dealing second-hand with both expertise and relationships. That’s very different.  

Myth: You can’t cross-sell until you’ve built up enough trust. Not true – you never want to draw down on trust. Done right, cross-selling builds trust.  (See part 3 in this series for how to do it right).

 

To summarize: Cross-selling is the least costly way to add growth. You probably aren’t doing it. You’ve probably got one or more excuses – which don’t hold up.  But there is a solution, and it’s not all that hard. Stay tuned for the final post, How to Get It Right.

Cross Selling: Part 1 of 3 – What’s at Stake

/2 Comments/in , /by

This is part 1 of a three-part series.

Part 1 – What’s at Stake

Part 2 – What Goes Wrong

Part 3 – How to Get it Right

If your organization offers multiple service offerings, you may find this series of interest.

What is Cross-Selling?

Definition: Cross-selling refers to two kinds of sales relationships with an existing customer client:

a. Selling the same service to new buyers within the existing client organization,

b. Selling new services to the same buyer within the existing client organization.

Too many B2B and services companies don’t pay attention to cross-selling. Some think it is too advanced a concept for them to grasp. Others think it smacks of selfish, unprofessional “salesiness.” Still others think they already understand it.

So it’s worthwhile being clear about the “why” of cross-selling.

    Cross-selling done right represents the lowest cost-of-sales approach to growth. 

Yes, the lowest cost.  You’ve probably heard estimates to the effect of “the cost of a dollar of sales to a new client is 4 – 7 times higher than the cost of a dollar of sales to an existing client.” (Or, read here.)

These points are usually made with respect to customer loyalty. But cross-selling falls within the “existing client” part of that formula as well. Just envision all the parts of the sale that disappear if you can quickly engage in a conversation with parts of an organization you’re already involved with.

Financial Impact of Cross-Selling

Take a second to comprehend the scope of that statement: if your cost of sales (in aggregate, not per project or sale) amounts to 25% of revenue, think what dividing that number by 4 to 7 means for your bottom line.

For example: Assume you have four service offerings – A, B, C and D. . Assume your client is currently using only A, but could benefit from B and D. Your cost of selling B to a new client might be 25%. But your cost of selling B to your existing client might be only 6%. How much is that worth to you?

On top of the lower cost of sales, existing-client sales typically take less time to develop; they can hit your income statement this year, not next. And, sales to existing clients are frequently larger than those to new clients.

But the real clincher is on the client side. Clients buying from previously-known sellers are more likely to take your advice; more likely to provide you with relevant information and to open up about pitfalls; more likely to implement your recommendations, and to do so sooner. In other words: cross-sold clients are more likely to benefit from your offerings.

The Bottom Line of Cross-Selling

Bottom line: cross-selling is a huge opportunity for a win-win with your clients. You make more money, and grow, faster and more profitably. Your client gets time-tested advice, customized by a provider who already knows them, and in whom they already have some trust. Solutions are more likely to work, to be accepted, and to be implemented.

So why isn’t there a rush to try cross-selling? Because of fears it’ll go wrong. Fears which are not unfounded.

I’ll deal with that in the next post in the series.