"The aim of marketing is to know & understand the customer so well the product or service fits him & sells itself."Achieve this level of customer intimacy and cross buying becomes a possibility.
The Economist recently laid out 10 rules for effective cross selling:
1 Sell first; tell later. Do not attempt to up-sell or cross-sell until you have fulfilled the first order. Trying to sell additional items too early can endanger the original sale.
2 The rule of 25. The value of any additional sale should not increase the overall order by more than 25%.
3 Make a profit. The extra items sold must make enough profit at least to cover the cost of the additional time spent in selling them. But this should not be calculated over a short time frame. Frederick Reichheld, a marketing expert at management consultants Bain & Company, says that most cross-selling fails because companies think only of the next bottom line. They cannot resist trying to sell the highest-margin product rather than the most appropriate one.
4 Don’t dump junk. Resist the urge to use cross-selling to move unwanted stocks.
5 Limit and relate. Limit the add-on items to those that clearly relate to the original purchase. If a customer is buying a blazer from a catalogue, suggesting a shirt and tie makes sense; suggesting a garden hose does not. Much cross-selling of financial services fails because firms try to sell inappropriate products at inappropriate times.
6 Familiarity breeds success. The more familiar customers are with the add-on item, the more likely they are to buy it. Cross-selling is not the occasion to introduce a brand new product. Misdirected marketing at such times can turn clients away in droves.
7 Plan, plan, plan and plan again. Decide in advance, for instance, which products each additional item can be related to.
8 Train to avoid pain. Make sure that the salesman thoroughly understands the products or services being offered.
9 Test with the best, then roll with the rest. Test cross-selling first with the best salespeople. They have the drive and initiative to smooth out any of the kinks.
10 E = MC2. A cross-selling effort (E) is directly dependent on how motivated (M) the salesmen are. Compensation (C) is always a critical factor in selling, as is another word beginning with C—control.