We work with multiple clients and over and over have come to understand the importance in cross-selling and how it impacts bottom line. The facts are simple – from advertising, educating prospects and all the steps needed to nurture a new lead to the point of trust – new customer acquisition is costly. Acquisition is typically 3-5x more expensive then cross selling into the existing account base.
Cross-selling accounts for greater than 70% of most B2B company’s annual incremental revenue growth and over 25% of total revenues each year.
And, there are two basic types of cross-selling:
1. Selling to more products to existing buyers
2. Selling to more buyers in existing accounts – a goldmine for revenue and profit growth
So, why do most companies tend to over-invest in new customer “acquisition?”
Why require significant investment of marketing and sales resources and when you could invest more in cross-selling to “known buyers” – where firms are more likely to grow?
Cross-selling is a challenge because existing customers – accounts or buyers – expect their suppliers to know them well. They expect quality interactions, requiring tailored engagement and personalized offers/content. But too often, existing customers are “orphaned” because sales and marketing teams lack complete customer information or don’t have the ability personalize content and offers.
Consider This: How many of your existing customers are “marketing email suppressed” because sales is worried about marketing damaging the relationship? This is the case more often than you think. For those that marketing can touch, how many customers receive generic messages, content, and offers that lack relevance and specificity?
How to Win:
Successful cross-selling requires companies to power BOTH marketing and sales teams and not fear the additional outreach (from either marketing or sales).
3 things your teams need:
- Aggregated Data: This includes detailed account profiles, buyer/user profiles, historical interactions, product purchases, usage data, and other data to increase customer knowledge and drive relevant messages. It’s about more than CRM data, and includes the integration of internal and external data to provide a robust picture of the customer.
- Analytics to Prioritize Targets, Content, Offers: Your teams needs to develop and deploy a battery of “predictive analytics” that flag customer needs, likely next purchases, and attrition risk, arming marketing and sales teams with the triggers and prescription they need to take action.
- Customer Engagement Tools: Tools that allow you to remain front and center for existing customers, so you are there when they are ready to buy. Anticipating your customer’s needs and engaging at the right time is crucial, independent of the channel your customer prefers. After all, your competitors don’t stop marketing to your customers!
Ultimately, there is massive potential for organizations to “crack the code” on cross-sell…
However, because of the inherent challenges in getting it right, most organizations fail to realize this potential and are underwhelming their existing customers in the process. The best organizations solve this problem through improved customer data, predictive analytics, and focused outreach to customers via their preferred channels.