Companies today are highly focused on “leveraging the product portfolio” to effectively increase profits in a competitive market. Cross-sales can be as much as 75% less costly to generate than original sales.
Unfortunately, in setting sales targets, executive management often over-estimates an organization’s ability to cross-sell — especially when new products or services are introduced, a merger or acquisition has occurred or activist investors apply pressure to grow revenue.
If your company is experiencing cross-selling challenges, knowing the reasons why is the key to finding effective solutions.
When companies’ financial growth goals require their sales team to close significant cross-sale opportunities, they often fall short of the mark. The common cross-selling problems that challenge organizations include:
Many sales reps distrust their colleagues’ competence; they don’t want someone else jeopardizing ‘their’ account.
For cross-selling, reps need to be up to speed on offerings outside their business unit and the customer pain points they address; this knowledge is often unexpectedly limited.
Sales reps know the buyer contacts for their own products and services but may not be familiar with buyers for different offerings, even within the same customer organization.
Either too many sales people get involved or the right subject matter experts (SMEs) aren’t included in deals.
The way sales are credited and rewarded hinders rather than helps. Further, Leadership has set the wrong or too many targets, causing a sales force with cross-selling skills to still land short.
Expectations on pricing can be different at the customer level. Different buyers might have vastly different budgets and perceived expectations on the price to value.
To set your sales team up for success, reps need training in effective cross-selling strategies. Company-wide goals should align everyone in the organization, no matter what business unit they serve. And processes and policies should encourage cross-selling. The right strategies can help your team:
A large fintech company came to Axiom Consulting Partners with several of the typical issues that prevented them from reaching their cross-selling targets. Their sales crediting and incentives — set up to reward “primary sales” made by individual sellers — worked against the goal of increasing cross sales through cooperative teamwork.
One significant problem was that commissions for “primary” sales and cross-sales were paid at different rates which created a perception and prioritization issue. Sales reps often argued over how to code a sale. The system disincentivized them from closing the lower valued cross-sales.
Sales were also credited by a percentage system when multiple reps were involved. This sometimes resulted in too many sellers trying to get involved in too many deals, provoking complaints from harried customers. At other times, sales reps would avoid including appropriate SMEs in deals because they didn’t want to share incentive pay.
Further, when hunters became involved with “at risk” renewal sales, add-ons would be treated as primary sales credits instead of cross-sale credit, motivating hunters to insert themselves into these deals and push out the original opportunity owners.
Cross-selling success should be addressed at the rep level and the organization level.
At the rep level, focus on developing and supporting a team selling/SMEs approach. Since cross-selling works best with sales reps that know accounts well, it’s important to deepen and broaden client relationships by involving multiple team members early in the sales process and utilizing SMEs at crucial stages.
Also productize cross-selling to make it simpler for your reps. From a Sales Operations perspective, dedicate an internal resource to prioritize and manage cross-selling opportunities and build out an account plan/sales map based on cross-selling objectives. Sales enablement activities to train your sales team to cross-sell are a must. And be sure to align your incentives with your goals.
At the organizational level, the focus should be on understanding and building up the market. Your marketing team should assess buyer personas, build awareness and conduct TAM and other studies to understand what your customers need. Put your data science team to work uncovering hidden patterns in existing customer data to identify customers who are likely to buy and to be profitable. You want to help your sales organization target the best cross-selling opportunities without wasting time.
It can also be helpful to develop customer journey maps to help define the sales process. Consider offering trials or freemium services.
Once our fintech client’s issues were identified, solutions could be implemented. They changed the incentive program to compensate primary and cross-sales at the same full commission rate, making both equally rewarding and important to sellers.
They also eliminated division of credit. If an opportunity owner makes a cross-sale with the assistance of a SME from another group, both participants receive 100 percent credit. Sellers are more willing to bring in other resources, knowing they aren’t reducing their own pay.
Hunters are no longer allowed to step in on “at risk” renewals.
Many companies have problems with their cross-selling goals, but the benefits are worth pursuing. We believe that sales teams can boost cross-selling profitability with the right training, processes, incentives and data support. If you’re ready to understand what would work best to move the needle on your company’s cross-selling success, let’s chat.