Wednesday, November 11, 2015

Why Cross Selling Usually Doesn't Work

No doubt you're aware that it's easier and more cost-effective to sell to existing clients than to new ones. That's reflected in the fact that 70% of architectural and engineering firms' work comes from repeat clients. So naturally most firms make it a priority to sell additional services—what's called cross selling—to existing clients.

Unfortunately, this common-sense approach falls short more often than not. Lack of success with cross selling is among the most common complaints I hear when helping firms improve their rainmaking process. Why is this so difficult? Here are the reasons I uncover most often, and what you can do to overcome them:

Discomfort selling outside your area of expertise. Not that this is a legitimate reason why cross selling doesn't work, but it certainly qualifies as a popular excuse. Ironically, many of these same professionals who feel inadequate to cross disciplinary boundaries to talk to clients about their needs will gladly pass the torch to the firm's business development specialist— despite that individual's lack of technical credentials.

Solution: Specific expertise can be a hindrance rather than a help in sales. It tempts you to look for problems that fit your skills rather than openly exploring needs from the client's perspective. Learn to ask great questions and develop your general problem solving abilities. Then bring in the proper expertise when necessary.

Management inadvertently promotes a lack of cooperation between business units. The fact is that many firm leaders complain about the paucity of cross selling while ratcheting up the pressure for individual business units to meet their sales budgets. You can't expect people to look out for the greater corporate good when the focus (and the pressure) is predominantly on how well their own group performs.

Solution: Reward people for succeeding at cross selling, or dispense with the notion that it will ever work. The firms that excel at cross selling are typically those that actively promote cross-business unit collaboration in general. Or better still, they organize as a single profit center to minimize the inter-company competition.

The difficulty of engaging different buyers within your clients' organizations. In concept, it seems straightforward to expand business with your best clients. But the reality is often quite different. For much the same reason as my previous point, your current client contacts may not be that motivated to introduce your firm to other parts of their organization. They may love you, but what's in it for them? Plus they may not know their colleagues in other business units well enough to provide you much leverage.

Solution: Selling succeeds when you can create win-win scenarios. The same is true in motivating your clients to help you cross sell. Focus on those opportunities where it's in their interest for you to serve other parts of their organization. For example, can you export a winning solution or approach to another business unit where your client contact gets the credit?

Distrust in your colleagues to deliver. Most professionals are understandably reluctant to entrust their client relationships to peers who might not uphold the same standard of care. So they resist cross selling efforts involving individuals or groups they aren't confident will come through. This situation is far more common than many firms recognize because it's rarely discussed openly.

Solution: If you suspect this problem exists in your firm, it's best to investigate it through private conversations. To encourage transparency, avoid taking sides or putting people on the defensive—simply uncover the facts (remember, perceptions in such matters effectively form the reality of the situation). Once you feel you understand the concerns, then work with the involved parties to try to resolve the issues identified.

Lack of client focus. I once participated in a planning meeting where one of the firm's executives began sketching a matrix that listed their top clients and what services they were providing to each. The purpose of this exercise was to identify where their best cross selling opportunities existed. But the most important question was ignored: What other needs do our clients have that we might help them with?

Perhaps the most prominent reason cross selling doesn't work is the lack of true client focus. When you approach the issue motivated by self interest, you're unlikely to have many productive conversations with clients about new services. Don't you think they can detect what's really driving your interest in the subject?

If you're genuinely motivated to serve your clients, cross selling becomes a natural byproduct of your commitment to help. It's driven by the client's needs, not your firm's desire to sell more. Plus, client focus is the secret to overcoming most of the problems listed above. There should be no discomfort in serving, no lack of incentive to help clients succeed. Navigating the client's organization is easier when you offer true business value. And subpar service and quality within your firm is no longer tolerated.

So my advice for cracking the code on cross selling is this: Pursue a culture of true client focus. It's not a quick fix, but it is the most powerful way to solve your shortcomings at cross selling—not to mention a whole host of other corporate benefits.