Cross Selling

Cross Selling

When I was sixteen and still at school, I worked in a department store on a Saturday. Cross selling was made easy for me then. For a while I worked in the menswear department. Someone came in to buy a shirt, and because all the related goods were displayed next to each other it was straightforward to ask whether the customer wanted a pair of cuff-links or a new tie to go with the shirt. If they bought a tie, the next cross sale was to suggest they also buy a spot-cleaner for the tie. A friend of mine worked Saturdays in a DIY store. Similar rules applied. Someone bought a tin of paint, and the cross sale opportunities were perhaps a paint brush; a brush cleaner; or even one of those implements to help keep lines straight. The basic rule to cross-selling then were - if you have a number of products to sell, group them together so that the customer doesn’t have too much of an effort in seeing the relationship between your products. That’s not to say that it will happen. Often the customer needs to be told about the relationship and have the idea planted verbally that they could buy more than what they originally came in for.

40 years later and the same rules apply. Trading on the Web has even made it possible to display not only your own diverse product range on the same page, but also relationships and partnerships with other companies. Yet research shows that simply because goods are displayed together does not hugely increase buyer behaviour.

Cross-selling from the sixties has evolved into CRM (customer relationship management) in the 21st Century. The theory is that the more products organisations sell to customer; the lower is the probability that the customer will buy elsewhere, and the more profitable that customer relationship will be.

CRM systems make it easy for the salesperson to identify additional sales opportunities. The first product a customer buys adds to the customer database of knowledge the company has about the buying habits and profile of the customer. If it’s a really sophisticated CRM system it will flag up to the salesperson cross-selling opportunities, and in some cases even provide the salesperson with the words to say.

Yet once again, research shows that even giving salespeople the words to say has increased cross-selling by only a very small percentage. Why?

Simple – selling is still very much a human face to face activity, and as such buyers are motivated by emotional feelings as much as by logic. The logical relationship between products and services can be totally overridden by the feeling that you are being sold to or that the salesperson is being less then honest in his or her desire to sell you something you didn’t appear to want at the outset.

Retailing should be relatively easy. Your goods are on display. The customer buys something and the relationship between the other products on display is understandable to you both. Therefore a confident suggestion about the relationship often works.

• If your business is more complicated, or your goods are not in the customer’s face (you might not have retail premises) then you need two things:

A story which includes your full range and explains how they are related, and/or Customer databases which highlights the relationship – but which should still rely on the story in point 1.

• If you have a database be careful about telling the customer how much you know about them. Imagine you buy your cigars at the same tobacconist every week to be told – ‘I see that you’ve bought our product seven times this year, and yet my database reveals that you don’t smoke’.

No matter what you know about the customer it’s still better to have them tell you verbally in answer to a question. All of us like talking about ourselves, no matter how much the other person already knows about us.

It is clear that in a competitive marketplace it will be the people who can sell more to each customer and effectively stop the customer buying from the competition who will survive. The future appears to be that in marketplace where the rules of specialism seem no longer to apply that your specialism could become a competitor’s cross-sell. So we either form commercial relationships with other supplies, or we run the risk of them supplying our specialism.

I was in a German coffee-shop in the UK the other day that also sold clothes and kitchen accessories. I haven’t worked out the relationship or indeed the story – but people were buying. Cross-selling has moved into a new arena!