It can cost four times as much to sell to a new customer as it does to sell to an existing one. By cross-selling and up-selling to those already on your client roster, companies can sell more products and services, reduce the cost of sales, enhance customer loyalty and drive revenue.
Cross-selling is defined as discovering new applications for the products and services your customers already are using. It can mean forging relationships with different departments within the same company or with companies tied to your client, such as a subsidiary. You up-sell when you increase the size of existing orders — for instance, an increase in units, a product upgrade or a contract extension. This technique shortens the sales cycle by getting bigger commitments now rather than later.
Despite the many advantages of cross-selling and up-selling, many salespeople don’t use these techniques because they believe it might create an awkward situation. If I ask about other business opportunities or suggest a premium product, will my customer think I’m only interested in chasing the dollar?
The way to avoid such awkward conversations is to (1) start cross-selling and up-selling at the onset of every new business relationship, and (2) position yourself a trusted advisor versus a product pusher. Your conversations with your customers should focus on the immediate need (how can we help you today?) and the bigger picture (how can we grow together as your needs change?)
According to Adrian Miller of Adrian Miller Sales Training, to secure a cross-sell or an up-sell, you need to continually ask these questions:
- Are there other decision makers or influencers in the company I should get to know?
- Are there other locations, divisions, departments and subsidiaries that could benefit from my product or service?
- Does my customer have plans for relocation, growth or downsizing, which could affect our current business arrangement?
“There are always questions to ask, data to confirm and information to be gathered,” Miller says. “Try to learn something new on each and every contact.”
Harness the Power of Listening
Listening to your customers enables you to make adjustments to your pitch, product or service as the relationship evolves.
“Don’t listen so you can sell a product or solution. Listen to see if you can be the solution for them — not just your product/service, but you as well,” says Karen Pryor of P2E Marketing. “The majority of the time, it’s the established connection that the customer is buying. After all, there are a lot of people doing what we’re doing, just under another logo.”
Make Yourself Visible In-between Sales Calls
Sometimes your clients don’t know about your company’s other products because your communications are based on the issue that initiated the relationship. To educate your clients, Pryor recommends including them in e-newsletters and other external communications that promote your products and services.
“Now, I say this with the understanding that the e-newsletter is not all about the company,” Pryor says. “It’s about providing relevant market or industry information to clients and prospects, which also helps to position you as an expert.”
Enlist Your Service Team to Plant Seeds
Reut Schwartz-Hebron, founder of the Key Change Institute, says it’s the service people who often prepare customers for the up-sale or cross-sale. Train your service providers to have ongoing conversations with clients about what’s happening in their organizations and to plant the right seeds.
“Have service providers share stories of relevant successes, under the umbrella of providing perspective on a similar experience another client had,” he says. “You will be giving clients great information and value and offering important points of reference, and it helps the client gradually build a picture of what else can be done, which is a natural win-win.
“This strategy works beautifully for sales efforts that are not pushy, often allowing the client to initiate promoting you internally, which feels much better for everyone involved,” Schwartz-Hebron says.
Seek Out Potential Partners
An effective way to expand your business is to be a subcontractor for a customer that is already an established name in a market you want to enter, says Lourdes Martin- Rosa of Government Business Solutions on government contracting.
She says this is particularly true in the government sector. A study by American Express OPEN found that business owners who team up win 50 percent more contracts. However, be selective in your partnerships.
“Do your homework to make sure your teaming partner has a good reputation by checking their credit history, working capital, past performances and if they have any current teaming relationships,” says Martin-Rosa.
Business information resources, such as Hoover’s and USASpending.gov (for government contracts), come in handy for this research. Specifically, Hoover’s Family Tree Viewer will show you how your customers are tied to other businesses.
Make It Easy
The key to cultivating long-term, profitable business relationships, says Miller, is making it easy for your customers to work with you.
Be flexible in what you offer and in how you conduct business. Avoid the “one size fits all” approach and tailor each business relationship to the client’s needs. “Flexibility is a must if you have competition,” Miller says. “When you are rigid with what you offer, you are giving your competition an edge.”
Also, being slow to respond is a surefire way to lose a client. Millers suggests that if you don’t have an immediate answer for your client, respond with “Great question! Let me research that and I’ll have an answer for you by [specific date].” Develop a timeframe in which you return all queries and stick with it.
The secret to cross-selling and up-selling is to treat your customers as prospects. They might have elected to do business with you today, but that doesn’t guarantee anything for tomorrow. The campaign trail, so to speak, never ends. You should always be working for their “votes.”
“Just like in networking, you need to approach them appropriately, share willingly and be patient. Business development is a process, not a quick transaction,” Miller says.