We all know that it’s easier to grow existing business than it is to find and win a new account. But as American industry focuses on minimizing transactional costs and maximizing efficiencies, successful distributors tell us that cross-selling is more important than ever.
Sourcing priorities are changing. Sure, price almost always remains a primary driver. But as the cost of adding new employees rises alongside benefits like healthcare, companies want to accomplish more purchasing without adding people. If you’re an existing vendor, you’re in a powerful position to make that happen.
Executed well, cross-selling enables higher levels of service, deepens account penetration, and decreases the frequency and likelihood of competitor footholds. Here’s how.
1. Enable a Higher Level of Service
Cross-selling increases your ability to invest back into an account. The economy of scale you reach through increased sales volume provides lots of opportunities. As buyers’ expectations for service, support, training, and troubleshooting grow, bigger sales can position you to deliver better custom solutions. In the end, even those additional products or programs not tightly connected to your best expertise are worth the effort – as the focus shifts to bundled discounts, convenience, dependability, and your ability to impact overall costs.
2. Deepen Your Account Penetration
Cross-selling provides great opportunities to touch more people and to bring more decision makers to the table. As freight, logistics, transactions, and inventory considerations come to the forefront, so too will a number of new contacts within your account. Then, fresh opportunities will crop up for you to bring more of your people to the table, too. At a time of dynamic changes for many companies, you’ll know more of their key people and they’ll know more of yours.
3. Limit Opportunities for Competition
Cross-selling takes sales opportunities off the table for others. Then, as you deliver volume discounts, transactional efficiencies and bundled services, you’ll pull the ladder up behind you. Remember, as switching costs rise, the chances of a competitor earning and keeping a foothold are reduced. As the number of items sold to an individual account increases, the whole will become greater than the sum of the parts.
Customers are Open to It
I used to believe that buyers were inherently resistant to cross-selling. But over the years I’ve learned that isn’t so. Forty two percent of purchasers say they add products or services to what they buy from a vendor “sometimes” or “frequently”, says Forum Corp., a Boston-based company focused on sales and workplace learning. And nearly three in four buyers routinely look to the reps they know for new products or services, while nine in ten say they value suggestions for alternative products or services.
It’s more important than ever to leverage existing account relationships. Increase the numbers of items sold to an account and you’ll position yourself for better program support, a deeper connection to your customer’s organization, higher switching costs, and greater customer satisfaction. The strategy isn’t new. But, as sourcing priorities change and the complexities increase, so too can the power of existing sales relationships.
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