Cross selling among key accounts
Cross-selling among key accounts? Easier said than done… ! 3 practical tips for progress.
And with this, Sir, Madam …. ? Which customer has never heard this famous open question at the baker’s or the market? If it is well put, it is often successful.
However, this cross-selling approach, which consists of marketing the part of the company’s offer that is not purchased by the customer, is far from being as natural in B2C as in B2B in complex environments.
Indeed, studies on the subject show that up to two thirds of initiatives aimed at developing cross-selling fail, this being largely due to the sales function. This theme is a recurring concern for CIOs in search of organic growth, as it is easier to increase turnover with customers than with prospects! Failures are very painful when mergers and acquisitions are carried out on the assumption that the addition of the two entities’ offerings will improve the commercial efficiency of the merged entity. On the contrary, it is not uncommon for commercial productivity to be degraded and the hoped-for synergies to be a distant mirage.
Many companies come to Halifax to consult us on these issues, aware of an under-exploited growth potential for their turnover. A few examples: a world leader in insurance resulting from the merger of a loan insurance business and an assistance business, a distributor of medical equipment covering many surgical specialities, an industrial manufacturer wishing to develop the sale of its services.
Of course, complex selling contexts are characterised by a long sales cycle, numerous stakeholders on both sides, co-construction of the solution in often sophisticated technological and legal environments, but is this enough to explain the underperformance in cross selling?
A team of German and American researchers has studied the issue, interviewed more than 300 salespeople and their managers working in a biotech company offering a wide range of products and services to the pharmaceutical industry and published their findings in the prestigious Journal of Marketing. They highlight three factors that promote cross-selling and offer practical advice.
Firstly, develop the adoption of the company’s offer by the sales staff:
We only sell well what we know well. This simple advice is often followed by multiple product trainings, but according to researchers, the effectiveness is only partially reflected in the results. How do we ensure that all salespeople know the entire company’s offering and the concrete use cases? How do you ensure that all sales people have a deep understanding of the company’s capabilities and resources to meet latent and poorly formalised demand? Our experience at Halifax reveals the power of artificial intelligence solutions in reinforcement and adaptive learning that allow us to promote this learning in the long term among the sales force by adapting to each individual. Companies, faced with the complexity of innovations, disruptions in business models, and protean competition, can no longer wait to modernise the product skills of their sales staff!
Secondly, promote ‘transformational’ management based on a clear and inspiring vision, embodied by managers who act as a ‘role model’ and ambitious objectives that encourage teamwork:
This approach stimulates strong intrinsic motivation and is preferable to a transactional, ‘stick and carrot’ approach focused on performance indicators. The ‘Yakafokon’ injunction is over… Make way for managers who give breath and meaning to cross selling! The effort required in complex environments for sales teams is significant and the ability of management to activate it by means of a medium- to long-term discourse with a precise strategic meaning for the teams pays off in this respect.
Finally, handle incentives with care depending on the management approach:
In the case where managerial discourse and behaviour are oriented towards result indicators (transactional approach), bonuses or variable shares appear coherent and can improve performance. This is known, even if the effect is short term. On the other hand, these same incentives can be counterproductive when the managerial approach is transformational. Explanation: external incentives, in this case ‘incentives’, can reduce the intrinsic motivation that is absolutely necessary to develop cross-selling in complex environments. Shortcuts such as ‘if that’s the way it is, I’ll go for the simplest thing and sell what I know well’ can appear and thwart the efforts patiently made to give a systemic meaning to the sales action!
Source: C Schmitz, YC Lee & GL Lilien: Cross Selling Performance in Complex Selling Contexts: An examination of Supervisory Compensation-based Controls. Journal of Marketing, May 2014.
Did you like this article? Share it