CROSS selling, a practice that has been gaining momentum in big businesses for many years, could prove a successful tool for small businesses. The aim of cross selling is to get more value from each customer.
CROSS selling, a practice that has been gaining momentum in big businesses for many years, could prove a successful tool for small businesses.
The aim of cross selling is to get more value from each customer.
It can also help build trust in a business and, if done correctly, can extend the customer-business relationship.
However, if done poorly, cross selling can simply make customers cross.
Banks have been among the most aggressive appliers of the cross selling approach, trying to get customers interested in their financial planning or insurance offerings. Channel 9 even tried it recently when Tony Greig and fellow cricket commentators took the time between overs to plug the latest shows the station has to offer.
Marketing Centre managing director Michael Smith said cross selling worked best when customers had a high level of trust with the organisation.
“People who do cross selling well are those that generate a high level of trust, such as HBF or the RAC,” he said.
“Businesses have gone from asking ‘how much do I make from a product’ to how ‘much do I make from a customer’?
“That drives the thinking that a business can put up with one unprofitable product to gain a profitable customer.”
Mr Smith said the things driving organisations that were successful at cross selling were trust, the capability of the product they were trying to cross sell, and their ability to deliver it as well as their competitors.
He said companies also needed a culture that drove cross selling, or the idea would not work.
Business Today CEO Deborah Pitter said there had to be some synergies between the product the company was trying to cross sell and the product it traditionally offered.
“Where a lot of people go wrong is trying to go outside of their core business,” she said.
“You also have to make sure that the demographic mix of the product you are offering is right. The offer has to be matched to the target market you are focusing on.
“You have to consider whether your customers would see the fit.
“In these difficult days small business people need to stick to the knitting to survive.”
Small Business Development Corporation managing director George Etrelezis said cross selling was all about adding value for the customer and the business.
He described cross selling as “adding value to the point of sale”.
“You often have a related product or service that you could cross sell,” Mr Etrelezis said.
“But you have to be careful of overextending the goodwill of your customers. Don’t press things on the customer that they don’t really need.
“You don’t want to oversell to the customer, especially when the customer has budget considerations, because that can cause you to lose them. You can usually work out whether they have budget concerns by the way they negotiate the purchase.
“If cross selling is done well it can emphasise the value of your business’s advice to the client and help build trust.”
Mr Etrelezis said the SBDC was an active cross seller to its clients.
“If someone rings us regarding information on business planning we alert them to the workshops we run on that and even to the mentoring service we offer,” he said.
Caron Marketing Group CEO David Stephens said cross selling could be a valuable tool for small businesses, providing they got the right mix of products.
“There are aspects where you get companies together and put compatible products together on a brochure. That can prove successful,” he said.“But it can be a lot of hard work getting other people to promote your products.”