Any experienced or successful businessperson will tell you that it’s easier to make a sale to an existing client than it is to sell to a prospect. This is true for virtually any industry, regardless of whether it sells widgets or services. With an established value-added relationship with a current client, you are at an immediate advantage over any potential competitor seeking to sell your client a service or product. Not only is selling to current clients less expensive, but also the selling cycle is usually much shorter. You can often skip reference checking and a prolonged request for proposal (RFP) process, and cross-selling seldom involves the finer points involved in closing a deal.

Although these benefits are generally acknowledged in the business community, many companies stubbornly resist cross-selling. This is particularly puzzling during the sluggish periods of an economic cycle, when cross-selling can be an effective means to maintain growth targets.

There are plenty of reasons — or excuses — for failing to cross-sell. They range from the typical to the absurd. Many of these may sound familiar:

• Specialization is keeping staff very focused on what they know best. Therefore they sell only those services or products that they are most comfortable with.
  
• A fear of losing control of the client account prevents some staff members from aggressively selling the strengths of other staff or the expertise of other areas of the company.
  
• Workloads and staffing concerns prevent employees from offering their services more widely.
  
• Because the company has failed to articulate a cross-selling strategy or identify specific cross-selling targets, its approach to cross-selling is reactive instead of proactive in presenting new products and services to clients.
  
• Additional products and services often are being provided to current clients as a mere extension of existing ones instead of the new products and services they truly are, complete with their own value and set of benefits. As a result, these extra items are not properly reflected on invoices or monthly reports.
  

More Than Just Growth
Cross-selling is more than just a vehicle to growth. Many companies fear growth, especially during tight labor markets when providing additional products or services to clients threatens to overextend staff resources. Certainly that’s a legitimate concern. But such companies overlook the value of cross-selling as a vital tool for client retention as well as for growth. Consider a study several years ago that found that the more services a client bought from a firm, the more likely that client would be to stay with the firm for life.

The study also showed that among clients who purchased only one service from a firm, only 12 percent stayed with that firm for more than three years. In comparison, 98 percent of clients who bought five or more services from a firm never considered switching firms. Clearly, a goal for every company should be to have as many clients as possible buying multiple products and services.


Developing a Plan and Setting Goals
Inertia is a powerful force, and getting started along the cross-selling path is often the most difficult step.

Determining if your company has "cultural" impediments to cross-selling is the critical first step. Team building and other exercises may help to emphasize the importance of cross-selling. Creative compensation programs can also provide employees with incentives to cross-sell and help to create an atmosphere in which everyone in the firm helps sell. But beyond working toward a cultural shift, another vital step is the creation of a formal cross-selling plan, to be incorporated into the marketing and practice development initiatives of the firm.

To begin the process, you must do what may appear to be obvious — you must study your client base.

• Identify which products or services each client buys and who has the key relationship with that client.
  
• Create a list of cross-selling opportunities for specific new products or services appropriate to each client.
  
• Develop a matrix defining what the company will present to each client and when.
  
• And finally, compile all the information into a calendar format that will serve as the basis for your plan.
  

Other important components to include in the plan are a list of specific goals and a list of what kinds of marketing support may be needed.

The Final Piece of the Puzzle
The final piece of the puzzle in creating an effective cross-selling environment is training. Everybody involved should receive some instruction — in everything from identifying opportunities to practicing proper closing techniques. And training classes that focus specifically on your company’s products and services are preferable to more general sessions.

Cross-selling is a tremendous vehicle for accelerating growth and improving client retention for the firm. Take the time to create a plan, to set objectives, and to commit to these goals. The results will speak for themselves.

Three Keys for Effective Cross-Selling

• Examine the firm’s culture. If there is resistance to cross-selling, make sure everyone in the firm recognizes the benefits of cross-selling: increasing revenues, enhancing client relationships, building on the firm’s reputation, and improving client retention.
  
• Create a formal plan. Take the time to outline cross-selling opportunities with specific clients. Identify who will approach each client and how that client should be approached. Record specific goals and targets. Evaluate your success after a predefined period.
  
• Train everybody involved in the cross-selling process. And remember that an effective cross-selling program involves many people, not just top executives. The investment of time and money for training will be returned handsomely in the future.