Roger’s company is upgrading its computer equipment, and he needs to purchase 20 new wide-screen monitors. After doing his research, he’s decided on the latest high-definition, 21-inch monitors he found online. Proceeding to check out, he gets a pop-up window that asks if he’s interested in HDMI cables or a docking station.
“I do need those,” he thinks and purchases those, as well.
Roger has just experienced the fine art of cross selling.
All companies are looking for ways to increase sales. An important avenue of revenue for any business that is oftentimes overlooked is add-on sales, which includes cross selling and upselling.
CROSS SELLING AND UPSELLING
Both upselling and cross selling strategies can earn a business significantly more money. Think of these strategies in terms of buying a new car. Upselling would involve selling a more expensive model and cross selling would mean selling additional accessories for that model. For this article, I’m going to focus on cross selling.
Retail giant Amazon reports that more than 35 percent of its sales come from cross selling. That’s an eye-opening number. How much more revenue could a company be making if it implemented an add-on strategy?
There are only two ways to increase a company’s sales:
- Search for new customers; and
- Sell more to existing customers.
Which choice provides an easier route to increased sales, is more likely to happen, and is thereby more beneficial? The answer to these questions is No. 2 — sell more to existing customers.
Existing customers are already familiar with your business and trust you. Therefore, they are much more comfortable and willing to buy more. As a seller, finding new customers is difficult, time-consuming, and expensive, because you’re starting at square one. You first have to find them and close the deal. Then, you have to follow up and make sure they’re happy with your products or services. It may take weeks, months, or even years to foster a successful relationship. With existing customers, you have already accomplished all that. Return on investment (ROI) is also much higher with existing customers. A Bank Intelligence Solutions (BIS) study found that it costs a company eight to 10 times more to sell new customers than current customers. If customers are invested in your company with multiple products, they are much more likely to remain customers.
WHO WINS — THE CUSTOMER OR COMPANY?
One huge advantage of cross selling is that it benefits customers and the company.
Customers win with the convenience of buying several different products or services from a company they already trust. Many times, if complementary items are bundled, customers may get discounted pricing. The company earns a larger piece of the pie and strengthens their bond with their existing customers.
When customers reach the approval stage of the sale, or the checkout page online, it is the ideal time to make a pitch to them. Why is that? Customers have already decided to purchase and are much more willing to buy more at that exact moment. Buyers have already exhibited trust and confidence in you and your company. The one-on-one interaction between buyers and sellers lends itself to that ideal moment, which makes the sale just a little bit sweeter.
A recent study by SmartFocus found that sales increase an average of 3 percent when sellers show customers an add-on product at the time of checkout. An additional 3 percent over the course of the year can add up to some real money, especially for companies in low-margin businesses in highly competitive markets.
TECHNOLOGY TO THE RESCUE
Technological changes have increased the ease of the cross sell.
Electronic ad displays take the pressure off technicians who have been expected to not only complete their repairs but also attempt to cross sell and upsell. Have you ever heard a tech say “I don’t want to sell” or “I’m not any good at selling?” Certainly you have.
When using technology to sell, product ads are presented automatically on smart devices on every call as customers are about to sign off on invoices. Basically, new technology takes the selling out of the hands of technicians, making it much easier to reach customers at that magic moment when the add-on sales opportunities arrive. And, when the app is making the presentation, technicians relax, add-on sales improve, and the average service ticket price goes up.
Coolfront Technologies provides four products for the service trades, including Coolfront Books, Coolfront Mobile, Coolfront Moments, and Coolfront Agreements. Coolfront Mobile is a zero-cost flat rate pricing app that helps contractors increase profits and improve efficiency and consistency in their service departments.
Certainly, all techs are not cut out to push product, but Coolfront Moments offers featured product ads that do the selling for the tech and helps maximize cross sell opportunities.
Maintenance agreements are another strategy to add to a company’s products and services portfolio. When customers sign up for an agreement plan, they are guaranteed one or two maintenance visits per year and are much more likely to remain customers for months or years to come. Customers gain peace of mind knowing they will have priority service throughout the year. If the agreement is setup on a monthly payment plan instead of a yearly fee, it becomes even more attractive. Coolfront Mobile invoices display repair discounts to bring attention to and promote the cross selling of maintenance agreements. When customers can see the amount of money they will save on a repair by signing up for a maintenance agreement, it often induces the purchase of an agreement.
So what are the takeaways from this article? Simple.
- Technology, such as tablets, smartphones, and apps, provides the impetus for ramping up your cross-selling capabilities;
- Now is the time to implement a cross-selling program. It takes minimal work and can pay huge dividends; and
- Coolfront offers programs that can help you with your cross selling and maintenance agreement programs.
Publication date: 6/5/2017