Buyer behaviour has changed – customers are more demanding and more empowered with technology, access to product reviews and information.
People have the means to research products and services right in the palm of their hands, and they make up their minds often before they get in touch with company's salespeople or ordering online — knowing just what they need and how much they want to pay. This is made even harder for businesses with all the competition targeting the same people. When it comes down to it, new customers and new sales are harder to come by.
So what do you do to make sure your revenues and profits continue to grow? Get your current customers to buy more of course! Better known as cross-selling, a sales strategy by which you offer your current customers relevant products / services to complement their purchases in a subtle, useful fashion.
The art of cross-selling is a widely known sales strategy amongst salespeople, perhaps due to the array of benefits it brings:
- Low cost - The costs incurred by any organisation for cross-selling is much less than that of new customer acquisition. It is generally believed that acquiring a new customer costs 3 times the cost of keeping a customer.
- Better customer retention – When it comes down to it, your customers stay because they’ve seen value out of what you’ve provided them. Cross-selling enables you to increase that value by offering additional products / services that complement their current product / service. Ultimately, you will see better customer retention rates.
- Immediate sales – Sales from cross-sell opportunities generally happen at the end of the sales cycle. Therefore, the sales happen almost immediately and your revenue is obtained without going through the complete sales cycle.
Despite the clear benefits, not many businesses make cross-selling a routine practice. Typically, the way businesses come across a cross-selling opportunity is if it jumps out at them, perhaps through a customer enquiry. Inadvertently, this means there are potentially other cross-sell opportunities that they are not seeing, and these businesses are missing opportunities to increase sales.
So what can you do to fix it? Here are 3 steps how:
1. Understand the needs of your customers
The first step to uncovering cross-selling opportunities is to really understand your customers' needs. Of course any business need stems from a problem the business is trying to solve. So it is important that you understand your customer's challenges at this point in time and how to solve them. Then you can truly understand what they need.
By understanding your customers’ needs, you can determine the types of products and services that can deliver them the value they seek.
2. Keep an eye on what your customers are purchasing
Of course, the understanding of your customers’ needs will need to be supplemented by data of the purchases your customers are making. After all, you need to know exactly what they are buying to make sure you can cross-sell the right product / service to complement their purchases.
3. Identify the gap
When you have the key pieces of the puzzle, i.e., what they need and what they are buying, it becomes easier to determine the gap – the product or service they need that they have not purchased. It doesn’t matter whether they have purchased it from the competition or whether they have not purchased it at all, what matters is that your customer is not buying it from you. And that makes it a cross-sell opportunity.
Seems easy, right? It is, if you have all the information about your customers’ purchases. But for businesses that don’t have the complete view of what their customers are buying, identifying cross-selling opportunities is not easy, and in some cases downright impossible.
The key is to have a tool that can give you complete visibility of your customer’s buying habits, this can be in the form of sales analytics or Business Intelligence. The critical element is the technical capability of this tool to show you exactly the sales that you have made and to which customers over a specific time period. Supported by records or notes from past sales conversations, you will be able to determine the customers' needs and pinpoint those who present potential cross-sell opportunities. And then, you can act on it.