The Enterprise Council on Small Business (ECSB) conference in October featured some new research on the dynamics—and possibilities—of cross-selling among small and medium-sized businesses. Some of the results probably mirror what most of us have experienced in our 2012 planning: More than nine out of 10 companies plan to increase their emphasis on cross-selling in the coming year. This, despite the fact that the ROI of cross-selling continues to decline with almost two-thirds of the programs studied missing their goals.
So why do marketers continue to tilt at the cross-selling windmill? In many cases, it’s because we’re buying into three popular myths.
Myth # 1: We Have the Incumbent Advantage
Sure, you’re doing business with that targeted prospect. But so, too, are a whole roster of other suppliers, vendors and service providers. SMB buyers in particular are likely to level this particular playing field by inviting your fellow “incumbents” into the mix. However, two-thirds of them are going to continue to shop around among non-incumbents.
Myth #2: We Have a Strong Relationship With Our Customer
That’s all well and good and may give you a very good chance of keeping your current business. But as for cross-selling efforts? Not so much. The study found that far from being a leading factor in purchase decisions, relationship strength ranks near the bottom when it comes to selecting additional or complementary products and services.
Myth # 3: We Have a Long-standing Relationship
Many companies and brands are proud—perhaps rightfully so—of their status and “the name you’ve known and trusted since …” But rather than being an advantage, tenure actually can be a handicap when it comes to introducing new categories of offerings. In addition to the risk of being typecast as that supplier of a specific line, your customers have had many more opportunities for a less-than-satisfying experience with your quality or service.
The Good News
Not all of your cross-selling efforts need be in vain, however. The ECSB research demonstrated that business decision-makers are most receptive to cross-sell efforts at the beginning of a new relationship. The likelihood of successfully selling in additional or complementary products and services is particularly high during the three months immediately following the initial transaction.
Building this understanding into your customer on-boarding process provides a bright window of opportunity for successful cross-selling. A well-planned on-boarding program provides an opportunity to not only listen, gather data, diagnose problems and improve overall satisfaction, but also introduce more offerings at a time when the propensity to buy additional and complementary products is highest. Too many brands are leaving incremental sales on the table by not taking advantage of this window of opportunity. You still need relevant messaging, meaningful offers and customized/personalized points of contact to develop the dialogue. But in this, like many endeavors, timing is everything.
gyro is a member of and agency for ECSB.
by Judy Rudolph Begehr
Senior Vice President – Account Planning
Cross posted at Ignite Something on the Forbes CMO Network