Cross-selling and up-selling are powerful techniques that leverage your sales resources to drive significantly more revenue. By taking the time to understand the full scope of underlying issues driving prospects to consider new solutions, you’ll uncover previously invisible opportunities to close bigger, more profitable deals with new and existing customers. Here is a Great Sales Story that demonstrates the concept. The author is anonymous.
A keen country lad applied for a salesman’s job at a city department store. It was one of those massive stores that have every department imaginable. In fact it was the biggest store in the world – you could get anything there.
The boss asked him, “Have you ever been a salesman before?” “Yes, I was a salesman in the country,” said the lad. The boss liked the cut of him and said, “You can start tomorrow, Friday morning, and I’ll come and see you when we close up.”
When the boss looked up the young man the next day at closing time, he saw him shaking hands with a beaming customer. After they parted, he walked over and asked, “Well, that looked good! How many sales did you make today?” “That was the only one,” said the young salesman. “Only one!?!” blurted the boss. “Most of my staff makes 20 or 30 sales a day. You’ll have to do better than that! Well, how much was the sale worth?”
“Two hundred twenty seven thousand, three hundred thirty four dollars and change,” said the young man. The boss paused for a moment, blinking a few times. “H… H… How did you manage that?!?” “Well, when he came in this morning and I sold him a small fish hook. Then, I sold him a medium hook, and then a really large hook. Then I sold him a small fishing line, a medium one, and then a big one. I then sold him a spear gun, a wetsuit, scuba gear, nets, chum, coolers, and a keg of beer.
I asked him where he was going fishing and he said down the coast. We decided he would probably need a new boat, so I took him down to the boat department and sold him that twenty-foot schooner with the twin engines.
Then, he said that his Volkswagen probably wouldn’t be able to pull it, so I took him to the car department and sold him the new Deluxe Cruiser, with a winch, storage rack, rust-proofing, and a built-in refrigerator. Oh, and floor mats.”
The boss took two steps back and asked in astonishment, “You sold all that to a guy who came in for a fish hook?!”
“No,” answered the salesman. “He came in to buy a blanket.”
“Yeah, an extra blanket for the couch. He just had a fight with his wife and was sleeping on the couch. I said to him, ‘Well, your week-end is ruined, so you might as well go fishing…'”
It can cost four times as much to sell to a new customer compared to an existing one. By taking advantage of existing relationships and ongoing contacts with customers, companies can sell more products and services, reduce the cost of sales, enhance customer loyalty and drive revenue. It’s often said that inefficient sales practices leave money on the table. In fact, when you fail to sell smart, it’s worse than that. When you have a solution that your customer should have bought, but didn’t, you not only left the sale on the table: you left the entire customer’s ROI there as well. What if you could make each sale more profitable, and outflank the competition every time?
Today’s top performers embrace cross-selling and up-selling—closing more business at higher profits and capturing market share in the most efficient way possible.
Cross-Selling: Extend Relationships and Create Opportunity
Cross-selling starts with taking a larger view of the client organization: looking at all the possible relationships involved, and where those relationships intersect with the number of relevant solutions for that customer. By expanding the discussion to include additional buyers and products, a top performer can get a better picture of a customer’s enterprise goals, make a better recommendation and create the opportunity for much bigger deals.
Up-Selling: Expand Orders and Improve Customer Utility
A companion method Winning Sales Organizations use to increase revenue is called up-selling. Up-selling means securing a larger commitment: a commitment to buy additional units or a more expensive, premium version of the solution. In this case, what’s good for the customer is also good for you: the cost and risk of an up-sale is significantly less than that of an original sale. With this in mind, the winning sales person always asks the client, “What else should we be looking at? How can we make this work even better for you?”
The Challenges: Why Salespeople Don’t Cross-Sell/Up-Sell
Selling is ultimately about building “trust”. And that trust is hard-won, often leading to the perception that asking for other relationship opportunities or suggesting a premium product would jeopardize the current position. Of course, it’s not as simple as,
MacDonald’s classic: “You want fries with that?”
For a professional salesperson, the very worst time to start thinking about cross-selling and up-selling is when the customer is placing the order. The time to start is at the very beginning of the sales process — ideally at the qualification stage.
Countless studies report that selling to existing clients is far cheaper than trying to sell to new clients. Yet sales organizations struggle to implement effective cross-selling and up-selling initiatives. With all the documented opportunity to create bigger deals, better customer relationships and secure customer loyalty and market share, why don’t cross-selling and up-selling happen more often?
One of the most common reasons is “fear” caused by the misperception that asking for more raises the risk of losing the existing order. That fear may be accompanied by a feeling that there is not a level of “trust” in the relationship that justifies pitching additional products. These two factors (fear & trust) then lead to delay in asking for referrals.
By taking the time to gather in-depth information about customers and prospects, salespeople can gain a greater insight into their accounts, uncover new business opportunities, and avoid many of the fears that get in the way of performing cross-selling and up-selling activities. Conversely, a lack of quality business information translates into missed cross-sell and up-sell opportunities—and lost business.
Cross-selling and up-selling success comes from the following; understanding your customer’s business, asking the right questions, doing the research, and leveraging quality information.