The practice of selling or suggesting related or complimentary products to a prospect or customer. Cross selling is one of the easiest and most effective methods of marketing. In the financial services arena, cross selling can mean selling different types of investments to Investors, or even insurance to investors, or tax preparation to retirement planning clients. Definition: A sales technique In which the salesperson recognizes what a customer is purchasing and will make suggestions or recommendations of other related merchandise the shopper may also be interested n purchasing.
Also Known As: Suggestive Selling Examples:Len our store we do not have salesperson so It Is the Job of the cashier to cross-sell to shoppers. The cashier Is trained to suggest related merchandise based on the items the customer has decided to buy. Cross-selling is the action or practice of selling among or between established clients, markets, traders, etc. Or the action or practice of selling an additional product or service to an existing customer. This article deals exclusively with the latter meaning. In practice, businesses define cross- selling in many different ways.
Elements that might influence the definition might include the size of the business, the industry sector it operates within and the financial motivations of those required to define the term. The objectives of cross- selling can be either to Increase the Income derived from the client or clients or to protect the relationship with the client or clients. The approach to the process of cross-selling can be varied. Unlike the acquiring of new business, cross-selling involves an element of risk that existing relationships with the client could be disrupted.
For that reason, it Is Important to ensure that the additional product or arrive being sold to the client or clients enhances the value the client or clients get from the organization. In practice, large businesses usually combine cross-selling and up-selling techniques to enhance the value that the client or clients gets from the organization (and vice versa). – Cross-selling of professional services Benefits that can accrue to the customer include the efficiency and leverage that result from using a single supplier for multiple products.
When buying complex professional services, like consulting needed to make and Integrate an calculation. The use of one firm reduces the fingerprinting that Is common when a robber occurs in an area that straddles two or more services; if only one firm is responsible, fingerprinting is eliminated. For the vendor, the benefits are also substantial. The most obvious example is an increase in revenue. There are also efficiency benefits In servicing one account rather than several. Most Importantly, vendors that sell more services to a client are less likely to be displaced by a competitor.
The more a client buys from a vendor, the higher the switching cost. Though there are some ethical issues with most cross-selling, in some cases they can be huge. Arthur Andersen’s dealings with Enron provide a highly visible example. It Is commonly felt that the firm’s objectivity, being an auditor, was compromised by selling internal audit services and massive amounts of consulting work to the 1 OFF barriers: 1. A customer policy requiring the use of multiple vendors. 2. Different purchasing points within an account, which reduce the ability to treat the customer like a single account. . The fear of the incumbent business unit that its colleagues would botch their work at the client, resulting with the loss of the account for all units of the firm. Broadly speaking, cross-selling takes three forms. First, while servicing an account, the product or service provider may hear of an additional need, unrelated to the first, that the client has and offer to meet it. Thus, for example, in conducting an audit, an accountant is likely to learn about a range of needs for tax services, for valuation services and others.
To the degree that regulations allow, the accounts may be able to sell services that meet these needs. This kind of cross-selling helped major accounting firms to expand their businesses considerably. Because of the potential for abuse, this kind of selling by auditors has been greatly curtailed under he Serbians-Cooley Act. Selling add-on services is another form of cross-selling. That happens when a supplier shows a customer that it can enhance the value of its service by buying another from a different part of the supplier’s company.
When one buys an appliance, the salesperson will offer to sell insurance beyond the terms of the warranty. Though common, that kind of cross-selling can leave a customer feeling poorly used. [citation needed] The customer might ask the appliance salesperson why he needs insurance on a brand new refrigerator, “Is it really likely to break in Just nine months? [original research? ] The third kind of cross-selling can be called selling a solution. In this case, the customer buying air conditioners is sold a package of both the air conditioners and installation services.
The customer can be considered buying relief from the heat, unlike Just air conditioners. [edit]Examples 1 . A Life Insurance company suggesting its customer sign up for car or health insurance. 2. A wholesale mobile retailer suggesting a customer choose a network or carrier after one purchases a mobile. 3. A television brand suggesting its customers go for a home theater of its or another’s brand. . A laptop seller offering a customer a mouse, pen-drive, and or accessories.
Cross-selling stands for being able to offer to the existing bank customers, some additional banking products, with a view to expand banking business, reduce the per customer cost of operations and provide more satisfaction and value to the customer. For instance, when a bank is in a position to sell to a deposit customer (say saving bank or term deposit), a loan product such as housing loan, credit card, personal loan or vice-versa, this would result into additional business and lead to low per customer cost and higher per customer earning.
Revived focus : In the present day context, the cross selling has come into focus, as some of the new private banks (ICC Bank) have been able to offer to their customer a variety of products and thus generate more business through cross selling. But for most of the public sector banks, in particular, the concept in its new form, is still at its evolutionary stage. Scope of cross selling : The crossing selling may take place on the liability side (I. E. Different kinds of deposit accounts) or on the asset side (I. E. Loans for different requirements) or between the two.
It could be either at the initiative of the customers or a bank can implement it as a well prepared as for a bank, the cost of contracting a new customer is much higher than to serve an existing customer (may be up to 3-4 times). Further, through cross selling the benefits of economies are available to the bank, which reduce the cost further and increase the profits. Another additional advantage is that the cross selling helps in building brand value if the loyalty of the customer could be ensured for the brand, as in that case the likelihood of shifting the business dealings to another organization/bank by he customer, is much less.
Strategies for cross selling: The existing client base of the banks could be used by them for the purpose of cross selling after carefully charting the profile of the customers. For this purpose, the banks can undertake studies for various products and various geographical areas to understand the potential available for cross selling. The banks may undertake some of the following steps: ; Collection of data and preparation of data base of the customers, because the entire exercise of cross selling is based on such data base of the customers. Identification of customers and products that could be offered and then charting the strategy to offer the products. ; Imparting proper training to the staff to create team spirit and sharing with them the strategy for undertaking cross selling. ; Selecting target customers and narrowing down the product range, or even development of new products if necessary, to meet the specific needs of the group. ; Effective delivery. The bankers have to remember that Cross-selling is not a transaction based activity, it is primarily, a relationship building exercise.
