You’ve just acquired another business and you want to create some synergies, by selling the newly acquired company’s products through your other subsidiaries. So how do you do it? This is a classic cross-selling problem. Or you may have launched a new consulting offering that you want to sell to existing customers who already buy your existing software product. This is also a cross-selling opportunity. Or as CEO you realize that the % of group sales achieved by cross-selling is pitifully low e.g. < 5% and you want to transform this performance. These are all reasons for a new cross-selling initiative. The research certainly supports the view that its much cheaper to sell to existing customers than finding brand new customers. So why is it so difficult?
Here are eight tips I’ve used in the past to solve this problem:
1. Tell your sales teams a story. Give them the big picture of your strategy. So let’s say you are in a narrow industrial sector like “Valve Controls” but by acquiring other companies you have aspirations to become the global leader in “Industrial Controls”. Then explain to your sales teams the bigger ambition. Give then a bigger story to tell their customers.
2. There are three things a world-class sales team must understand to optimize performance: product knowledge, customer& market knowledge, and an effective diagnostic sales process. Put that into the context of cross-selling and you can see the need for training. If the sales team of division A are going to have an insightful conversation about division B’s product line you need to teach them. Teach them about the products and how they deliver outcomes for customers and the type of diagnostic questions that uncover symptoms and needs. Otherwise your sale team members are just throwing bland ideas across the table e.g. “ by the way George do you know we also sell universal sensors”.
3. Role-play, using a division A’s sales professional to mimic division A’s customer. Once trained, let a division B sales professional try to sell to the pretend customer. This takes hours of practice but the rewards are spectacular.
4. Incentivize your sales teams. Let’s say you want to incentivize division B’s sales team to sell division A’s product. Why should they? You have to make it rewarding. Is there a danger that a division B’s salesmen gets distracted, sure. But you’re not expecting the division B salesmen to close the sale. They are merely acting as a highly qualified lead generator for division A’s sales team. Keep incentives simple, measureable and realistic.
5. As soon as you get success at cross-selling a customer, build a case study around it and teach it internally.
6. Be careful not to sell a “Bundle” of different quality. Let’s say you are in recruitment – selling world class IT contractors to Pharma clients. You launch a new division, as yet unproven, to sell say, contract scientists to the same clients. Be careful. Selling a collection of services to a customer is only as good as the weakest part of that service offering. So they better all be remarkable or you will quickly underwhelm that loyal customer. This danger exists today in every business especially in legal practices, IT service businesses, and recruitment service businesses where the talent pool is not evenly distributed!
7. Build marketing content that talks to the bigger cause, the bigger story. Look at GE’s story telling on the Internet of Things (IoT). It’s really a story about cross-selling. GE is really saying to customers – look, there are huge gains to garner by embracing IoT, but you need to consider all parts of GE as a partner to achieve your goals.
8. Mapping customers in detail becomes even more important when you aspire to cross-sell. How customers make decisions, the issues they face, and their corporate objectives become key to map and understand. This way, global sales directors/COOs can formulate insightful strategic engagement strategies that match your group capabilities with the outcomes your customers desire.
The objections and how to handle them:
1. Sales professionals are very defensive of their special relationship with their customers. They will often resist new products and ideas being pushed on their customers without their ownership. I’m not offended by that. I quite like it. I don’t want customers dumped on with crazy ideas either. However let’s say the customer is a key strategic account, I would suggest the following tactics. Explain to the reluctant sales professional that you are putting together a C-level team including him, to have a face to face meeting with the customer’s C-suite, to review potential larger collaboration deals.
2. The sales teams on either side of an acquisition don’t believe in each other’s products. Of course post-acquisition, we’re all one big happy family. But cross-selling is not happening. Choose your top sales professional from the acquirer’s team and bring her on board. The right incentives, story, collateral are all put in place. Drive the success of that top sales person quickly and get some early wins. Now broadcast that cross-selling success across all sales teams and watch the news spread (health warning, the products all need to be remarkable as noted in point 6 above).
These are just some of the practical ways I’ve forced through successful cross-selling. At the end of the day, selling your products and services is all about trying to improve a prospects’s performance. And remember a prospect is a person not a company. It could be the CEO, the production manager, or the restaurant manager. And if you have a whole family of products that could improve that prospect’s performance, then you need to cut through the politics and objections and get the job done.
TPP scale companies by implementing the right process with the right people at the right time. Reach out at Ian@TPPBoston.com