Ever have one of those moments when you’re mid-conversation with one of your best clients, you say something about another one of your offerings, which you believe would be very helpful to them? And all of a sudden, the entire conversation changes? It’s like you’ve been transported a million miles away because there’s suddenly so much distance between you now.
This is what it’s like when your cross-selling strategy doesn’t work.
Why Does Most Cross-Selling Advice Backfire?
Standard cross-selling strategies treat your existing customers as revenue to be optimized. Ouch.
Strategies that forget your existing customers are people and not simply revenue sources will never work in the long run. Your customers will start seeing you as a salesperson instead of their partner. Worse, they’ll see you as just another vendor that they can pick up and put down with little thought.
A CEB survey found that 85% of customers won’t respond to cross-selling that misses their actual needs. Gartner’s research shows that up to 90% of companies that attempt cross-selling fail at it.
Sobering, right?
What Is a Bad Cross-Selling Strategy Costing You?
Acquiring a new customer is expensive, 5 times more expensive than retaining a current one. So every client you lose by heavy-handed cross-selling is more costly than the sale you were trying to make.
That’s just from a financial perspective. The perception cost might be worse.
If a client feels like you prioritize your sale over their needs, you’ve damaged the relationship, and they’ll remember it. They’ll probably even share their experience with others. And in small, tight-knit communities, the story will travel quickly. Suddenly, you’re the business owner who’s always selling something.
That’s not someone people refer to. And it will take some serious effort to rebuild your reputation.
There is another way to cross-sell. You can do it while building loyalty and reputation.
What Does Cross-Selling Look Like When It Builds Customer Loyalty?
The most effective cross-selling doesn’t feel like selling at all. Think about the last time someone you trusted gave you the name of a great restaurant, contractor, or accountant. Did you feel sold to? Probably not – unless it was their restaurant, or contracting or accounting business.
This is how you make your cross-selling work best.
Effective cross-selling includes recommending your own complementary products or services to your clients. But extremely effective cross-selling involves connecting your clients with the people and resources they need next, even when there’s nothing in it for you on the surface.
When you become the person who always has a great referral you can vouch for, things shift dramatically. You’re the one people call first for everything. According to LinkedIn, 88% of buyers say they purchase only from someone they see as a “trusted advisor.”
Becoming a trusted advisor requires you to keep your customers’ needs ahead of your need to make a sale.
When you consistently do this, the revenue will come. When your clients count on you and your team for guidance, you’re building loyalty and even raving fans who will refer to you again and again. This is how you consistently attract, win, and keep your ideal clients.
How To Turn Cross-Selling into a Referral Engine
One example I often walk business owners through is from the wedding industry.
Imagine a bridal florist with a great reputation, a solid client base, and who creates beautiful arrangements. She’d occasionally suggest upgraded centerpieces or additional bouquets for the bridal party as part of her cross-selling strategy. It worked sometimes. And at others, it fell really flat, and the distance in the conversation became a chasm.
So, she stopped thinking about what else she could sell. Instead, she started thinking about who else her clients needed.
She mapped out every vendor a bride or groom might interact with. Some of the vendors on her list were the jeweler, wedding planner, venue, dress shop, baker, and invitation printer. Then she thought about the order in which they might interact with all of these vendors – including her business, which wound up in the middle of the list.
Her next step was to create relationships with every business on her list so she could create a referral chain.
When a bride or groom mentioned they needed a wedding cake baker, she had a name ready. When the wedding planner needed a reliable florist, guess who got the call? Every vendor above her on the list became a referral source. Every vendor below her was someone she could send business to, and who remembered her for it.
Just one referral a month in each direction generated tens of thousands of dollars in additional annual revenue. And it did it without ad spend or awkward sales conversations.
This revenue was hiding in plain sight the whole time. She just had to stop looking at cross-selling as a solo act.
She was generous with her clients, as were the others in her referral chain. They all focused on making sure these weddings were wonderful. This is a cross-selling strategy that works well because it’s a win for everyone involved.
Can You Build This Kind of Cross-Selling Ecosystem on Your Own?
You’re probably already thinking about your own version of a referral chain. Which businesses serve the same audience you do, just at a different stage? Which comes before and after you in your ideal client’s journey?
Excellent! That’s exactly what I hoped you’d be thinking.
For some business owners, this is all it takes to create a cross-selling strategy that works instead of fracturing client relationships.
Others get stuck between loving the idea and creating a referral chain that works. There’s a lot that goes into the creation. Identifying which partners are most valuable to include, finding the referral partners who can strengthen your reputation, building mutually beneficial connections… This is one of those things that seems simple at first glance but actually has a lot of moving parts to successfully implement.
The florist didn’t figure this out for herself by herself or overnight. But she did begin by asking the same questions you’re thinking through right now.
If you’re ready to explore what your cross-selling ecosystem could look like, let’s talk. Schedule a 15-minute call to see if you’re a fit for my process.
