Cross Selling

The Challenge

It has long been accepted wisdom that it’s easier to expand share-of-wallet with existing customers through cross-selling than it is to find new customers. Most of those who try to exercise this truth, however, succumb to the temptation to look at their array of products or services and decide how many of these could be added to the portfolio of the customer’s purchases. Unfortunately, this approach has been shown to fail every time. Effective cross-selling starts with an analysis of what needs the customer has (particularly those they may not be aware of) that the seller can answer in unique and differentiated ways.

There are several trends that provide an increasing reward for those companies that crack the cross-selling code:

• Consolidation of suppliers—Merger and acquisition activity has opened new markets in many industries
• Moore’s Law—There is an ever-decreasing time-to-market for new products
• Organic growth—Wall Street is increasingly rewarding organic growth and ignoring growth by acquisition  

Why do so many cross-selling initiatives fail? 

Cross-selling initiatives generally fail for one or more of three reasons:

1. Risk Aversion
2. Inept or Inapt Salesmanship
3. Flawed Business Logic

How Huthwaite Can Help

The first step is to develop a mechanism for your salespeople to assemble an understanding of the needs and opportunities of each client. Especially important are the needs and opportunities that the customer doesn’t see.

Second, you need to develop a cross-selling plan within your company. This plan needs to be derived from the spectrum of problems and opportunities you’ve identified: Where are the places that you can meet the needs or seize the opportunities? Be mindful of how you can position yourself unique from the incumbent competition and those that may compete for the business.

The final step is to prioritise your planned problems and opportunities in the context of who you know inside the account that would be most receptive to that message. Who internal to the customer can coach you on how to refine your understanding of the customer’s competitive landscape?

Huthwaite has been studying the differences between successful and unsuccessful cross-selling for a number of years. Even in companies with highly skilled consultative sellers there is a strong tendency to revert of “rolodex referrals” as the primary driver of a cross-selling initiative. Our advice would be to tread with caution and low expectations. There is a way to do it right, but it is not the so-called obvious or intuitive approach.