By Mike Jacoutot, Managing Partner
In my 34 years in business, I have never heard a customer or prospect say, “We want to increase the number of suppliers we work with.” Nope. Never.
What I have heard customers and prospects say hundreds of times, “We want to reduce the number of suppliers we deal with.” Sound familiar?
That last customer quote leads me to believe that customers would prefer to purchase more products and services from a smaller number of suppliers, requiring improved reporting, communication and teamwork from the suppliers’ different divisions.
In Patrick Lencioni’s book The Five Dysfunctions of a Team he states,
“Not finance. Not strategy. Not technology. It is teamwork that remains the ultimate competitive advantage both because it is so powerful and it is so rare.”
I couldn’t agree more.
For the purpose of this article, I will define teamwork as everyone having a shared vision; clear roles and responsibilities; delivering their best to help the entire company succeed; and keeping personalities and differences from negatively impacting the group’s performance. That is where leadership comes in.
Here are keys to effective cross-selling:
Analyze your current penetration rate and set goals for improvement. If you are only selling 10% of your customers multiple lines of business, then set a goal to achieve 33% cross-selling. Go public with the goal, track and communicate monthly.
Identify the best candidates for cross-selling. Loyal customers are typically the best candidates as they will “pound the drum” on your behalf with referrals inside their organization. Ask them for referrals.
Communicate to your team that the best defense against competition is a strong offense. There is a chance your competition is trying to expand services within your customer. If they are a Butler Street client—I can guarantee it. To paraphrase Big Tom Callahan from the movie Tommy Boy, “With customers, you’re either growing or you’re dying, there ain’t no third direction!” What is your team doing to advance the relationship?
Recognize and reward your team for cross-selling. On monthly conference calls, recognize the people and teams who do the best job cross-selling and working with each other. Compensate them for doing so. Remember: recognized and rewarded behavior gets repeated, unrecognized behavior goes away.
Train your team on cross-selling. Cross-selling across multiple divisions and multiple sales people is more difficult than you think and requires teamwork. Salespeople are highly territorial. You have to effectively explain the “WIFFM” (what’s in it for me) and support cross-selling with key account management and high degree of teamwork.
Bain and Company states it costs 6-7x more to sell a new customer than an existing one. Why not make cross-selling a top priority in your organization this year?
At Butler Street, we specialize in helping companies grow through key account management and cross-selling into their existing customer base. Our proprietary tools and cross-selling analysis has helped our clients dramatically increase their cross-selling AND client retention. Click on CONTACT and let’s talk.