Conventional business wisdom asserts that it costs much more to acquire a new customer than to retain an old one.
While that may be open to debate, it is certainly true that in many cases, attention to existing customers can result in higher revenues from those companies. One approach is to mindfully implement a cross-selling strategy.
Cross-selling is defined as selling additional products or services to an existing customer. This could mean selling them products from different divisions or interesting them in a broader array from one line.
Ideally, cross-selling creates value for the customer, with a net gain greater than the sum of the parts.
To illustrate these concepts, Crossbridge Communications, LLC, has published a case study featuring The Polar Companies, a manufacturer of industrial lubricants and cleaners serving the automotive industry and other manufacturers.
The company also provides environmental and waste handling services and consulting. With contraction in their customer industries, they found that overall sales were shrinking.
But one salesman had been able to grow sales. He found that customers who chose both products and environmental services saved money. However, the sales team was failing to communicate that on a consistent basis.
Using the top salesman’s approach as a template, the company created a process to cross-sell to the entire customer base. The techniques applied by Polar, with a resulting $1.8 million increase in revenues over three years, are common-sense customer-service principles.
Successful cross-selling is founded on the belief that each customer, no matter the size of the order, is important. By nurturing an initially small relationship, the Polar salesman grew annual orders from one customer that began at $5,000 in sales and increased to almost $100,000 over five years.
Stellar customer service results from understanding your customer’s needs and challenges and then determining how your products and service meet those needs.
Not only does this create stronger relationships and increase sales, it provides valuable input and insight that can be applied to product modifications as well as research and development efforts.
The more your salespeople know about their customers’ operations, sales cycles and strategies, the more easily they will be able to cross-sell your products and services. Being consistently responsive to calls and helping customers solve problems will build relationships.
An effective cross-selling program will start with educating your sales force on the entire array of goods and services you offer.
Which configuration of these can help create value for your customer? Value can be defined as saving time or money, improving productivity, or solving a problem.
Encourage your staff to think creatively as they work with customers. Do they have the flexibility and authority to build individual packages and solutions tailored to customer requirements?
This level of engagement and service is sure to reveal new opportunities and boost sales through deepened customer loyalty, as it did in The Polar Companies. Why not maximize the customers you already have before chasing those elusive new ones.