Why Cross-Selling doesn’t work

When new sales management arrives in a long established company that is active in multiple markets with different product lines, ‘cross-selling’ is often on top of the new director’s agenda.
Selling different product lines into the same customer is the sales Walhalla.  It allows sales teams to reach their targets by increasing the share of wallet.  A lot easier than hunting for new customers.

Also many acquisitions are done because senior leadership teams believe in the synergies caused by cross-selling.  But realizing these synergies is often easier said than done.

If you are the person that needs to make the decision, it is often not easy to find a mental framework that allows you to structure the thinking around this topic.

I structure these discussions with the following framework I developed.  Through focusing on two major areas, the customer need and the purchase point within an organization, you can get a pretty clear view on your chances of success.

The first focus area handles the customer need.  Do the new products you want to offer, fit in the same solution space as the existing products the customer already buys?  When products are in the same solution space, they solve problems for the customers that are closely related to each other. As an example you can consider the selling of a ‘Car Loan’ when a customer buys a car.  Both products are related to solving the same issue and as such in the same solution space.  When products are part of the same solution space, there is considerable more likelihood of cross-selling.

The second area covers the ‘Purchase Point’.  The main question here is whether the same individual/department at the customer has the authority and budget to decide on the purchase of the new products.  If this is the case, your chances of cross-selling increase, if not, they decrease.

These two focal areas can be combined in a single two-by-two matrix:

By mapping your product portfolio on this framework, you will quickly visualize your chances of success and steer your sales teams in the right direction.

If you want to learn more about this, please don’t hesitate to contact me at WidePeak.com.

Leave a Reply

Your email address will not be published. Required fields are marked *