Over the past few weeks I’ve read a number of blogs and articles seemingly hell bent on crucifying “cross selling”. I’m still not sure what cross selling ever did to offend our thought leaders however I believe we need a lively and spirited debate around such topics in our quest to win, and grow, our clients.
It’s with this spirit in mind that I approach this topic as somewhat of a contrarian. I argue that cross selling must be a significant part of any firm’s business development strategy. Further I propose that when cross selling is done correctly clients not only tolerate it, they thank you for it.
Putting cross selling into perspective
To mount my defence of cross selling, allow me to use an allegory.
Take a moment to imagine that you owned a Formula 1 racing team. As the team’s owner your job is to win races (and trophies!) and to keep the fans happily supporting your team. You achieve this goal through having great drivers, an excellent support team and fast racing cars.
Now picture yourself sitting in the office one day when your head engineer drops by for a visit. They tell you that they’ve developed a super fast car that has the potential to dramatically improve your win rate.
As you start rubbing your hands with glee they tell you about the one catch. This car requires an especially competent driver to be at the wheel. Put a novice, or complacent, driver in charge and the chances of an accident go through the roof increasing the risk to your team, the competition and the fans.
The way I see it you’ve really got two choices: Firstly, you can take the safe route and keep the engineers working on the car in the garage until they uncover a way to reduce the risks. Or secondly, you can put the car on the track and make sure that every driver is up to the task of expertly handling the vehicle through to success.
This decision puts you in a bit of a bind because the former strategy has much less downside while the latter offers you a chance to achieve your KPIs (and the fans’ adulation) much more quickly.
I would suggest that there are two questions whose answers will help you make your decision:
1. Is the upside worth the risks? And,
2. How do we ensure our drivers are better at handling the car on the track?
Is it worth putting the fast car on the track?
As with any business development tool, cross selling is only worth implementing if you believe you’ll get a good return from the investment of your time and energy. To answer this question I defer to three thought leaders and researchers who have analysed this topic in much greater detail than you or I.
Dr George Beaton, of Beaton Consulting, has posted a number of blogs highlighting a fascinating correlation between the number of service lines billing a client and their overall satisfaction. Beaton analysed more than 7000 respondents and concluded “the more practices of a firm a client uses, the more satisfied they become” (read the full post here).
Professor Heidi Gardner of the Harvard Business School earlier this year published the results of her research in a fascinating article titled “When Senior Managers Won’t Collaborate”. In it Gardner shows a strong link between increasing numbers of practice groups serving a client and higher revenue. The revenue increases were much greater when the firm is selling the services in an “integrated” fashion (i.e. complex projects requiring a number of separate subject matter experts) but still apparent when selling discrete services.
Gardner also linked the number of practice groups to increased client loyalty using the following quote from a Fortune 100 General Counsel to make her point: “I could find a decent tax lawyer in most firms. But when a tax lawyer successfully teamed up with an intellectual property lawyer, a regulatory lawyer, and ultimately a litigator to handle my thorniest patent issues, I knew I could never replace that whole team in another firm.”
Finally Tom Snyder and Kevin Kearns, in their landmark book “Escaping the Price Driven Sale”, found that well executed cross selling (or brokering all of the strengths of your firm) was one of the reasons given by clients who chose NOT to select the cheapest supplier, even in commodity markets.
I look at all of this research and see a very strong case. If you want greater client satisfaction, increased loyalty, less price pressure and higher revenue then increasing the number of service lines working for your client must be a corner stone of your client strategy. The upside outweighs the risks and the fast car should definitely be on the track.
That said implementing cross selling shouldn’t feel like you’re taking a gigantic leap of faith. In part 2 of The Cross Selling Delusion I’ll explore how we can reduce the risk of an accident by sharpening the driving skills of our professionals. You may be surprised to learn that this isn’t as difficult as one might think…