A while ago we showed you how to make client relationships better, focusing on building loyalty and engagement through ongoing, inclusive dialogues.
Once you have that successful, long-term relationship with your clients, you can start thinking about how to translate that trust into greater share of your client’s wallet.
Cross-selling is a great way to get more out of your existing clients while strengthening your relationships. But while it’s a common sales tactic, it’s not an easy one to pull off. Before you start pitching a cross-sell to your clients, consider the following top three tips about communicating and cross-selling:
1. Don’t try to upsell
Cross-selling is not the same as upselling, and failure to understand the difference between the two strategies can derail an entire transaction.
Upselling involves encouraging a customer to buy a more expensive product than the one they were originally considering, or to buy ‘upgrades’ and additional features. Think airlines that offer seats with extra leg room, or car manufacturers that offer upgrades on features like seats and wheels.
Cross-selling, however, is the process of getting a client to supplement their original purchase with another complementary product. British Airways does this on its website, offering its customers the opportunity to book hotel rooms and car rental when they buy a flight.
When you’re cross-selling, you’re effectively getting your client to buy an extra service or product – not just an upgrade or a more expensive version of the one they initially wanted.
This is why you must make sure to position the product you’re cross-selling as complementary to the initial purchase. If you try to cross-sell a product that isn’t relevant or is too expensive, you might jeopardise the entire relationship.
2. Avoid ‘bundling’
There’s a reason fast food outlets offer meal deals, cable television companies sell channels in packages and Microsoft sells its software in an ‘Office’ pack.
Bundling complementary products together in packages is an easy cross-sell and makes people feel like they’re saving or getting more for value for money. But while bundling might boost short-term demand for your products and services, it could have a negative effect on your sales over time.
Why? Research into the psychology of pricing has shown that consumers (your clients) find it easier to see the value in ‘unbundled transactions.’ John T. Gourville and Dilip Soman explain:
‘Quite simply, it is far easier to identify and account for the cost of an individual product in an unbundled transaction than within a bundled transaction. The one-to-one relationship between price and benefits in an unbundled transaction makes the cost of that item obvious, creating a strong sunk-cost effect and a high likelihood of consumption.’
Instead of bundling and creating ‘special offers’, focus on how you communicate the value of each of your products and services. Highlight the one-to-one relationship between your price point and product benefits in every sales pitch and presentation. You’ll boost sales, and avoid negotiating complicated ‘bundle’ deals in the process.
3. Pitch to the right people
Not every client is an opportunity to cross-sell.
In fact, researchers writing in the Harvard Business Review found that one in five cross-buying customers is actually unprofitable. These customers tend to overuse customer service across all channels, default on loans, breach contracts and spend in small, fixed amounts at a time.
It’s important to do your research on a client before you attempt to cross-sell another product or service. Think about your experience with them in the past and ask yourself:
- How much time, on average, do I spend on account management or ‘customer service’ tasks for this client?
- Are they reliable when it comes to invoices and contracts?
- How much have they spent on my products and services? Are they flexible with their spend or tied to a budget?
A bit of due diligence will help you decide where to concentrate your efforts, and cross-sell effectively to the clients who will be the most receptive.
Cross-selling is a great way to extend and strengthen your relationship with your clients while earning more of their wallet share, but communication is the key to cross-selling success.
So before you start cross-selling, remember to:
- Articulate how your products and services are complementary
- Clearly express the relationship between the price and value of your products
- Do your research and pitch to the right clients.