Cross-Selling - It's About Connecting with Customers
By Terence Traut, Entelechy, Inc.
What do TiVo®, XM Radio®, and the Do-Not-Call List have in common? They represent the collective voice of the prospective saying, "leave me alone; do not annoy me with commercials and other direct solicitations for products and services."
According to research we conducted in our white paper entitled, Effectively Using Cross-Selling and Up-Selling to Increase Revenue AND Customer Service (available free at http://unlockit.com/TS-HPCS.htm):
• Over 70% of Personal Video Recorder (PVR) users skip through television commercials (and Yankee Group estimates that fully half of US households will have this technology in four years! (1))
• Satellite radio has eight million customers and expected to double to over 19 million subscribers by 2007. (2)
• Over 100 million people have signed up for the Do-Not-Call list, with severe penalties to companies violating the law (in December, 2005, DIRECTV was slapped with a $5.3 MILLION penalty for Do Not Call violations).
• Return rates for the types of outbound marketing and advertising efforts listed above have fallen below 3%. (3)
Consumers are clear in their directive to us: stop the bombardment of irrelevant, ill-timed advertising.
It's not that consumers have stopped consuming. On the contrary, they are buying; for example, consumers spent over $20 trillion dollars on household goods and services in 2003, four times what they spent in 1960 according to The Worldwatch Institute. (4)
As a result of the lackluster results of outbound marketing and the increasingly limited reach of traditional advertising, more and more companies are looking to optimize opportunities in inbound customer calls and use service reps to take advantage of ongoing contacts with customers to position additional products or services.
With 2.1 million customer service representatives in the US (5) handling billions of customer calls annually, inbound customer service calls provide a huge opportunity for cross-selling - if done successfully.
The Key is Connecting with the Customer
Consumers are willing to purchase additional products or services from customer service representatives. In a 2004 Forum Corporation survey of 1,624 world-wide respondents - averaging 43 years old and with an annual family income of $56,000 - it was found that:
• 88% of customers value service reps who suggest alternative products or services that better meet their needs.
• 73% are interested in learning about new products or services the company is promoting.
• 61% tend to ask service reps about these products or services.
• 42% said they purchased additional products or services "sometimes" or "frequently". (6)
The Forum survey found that consumers are most likely to buy when the customer service rep:
• Focuses on the customer's needs instead of pushing a product.
• Solves the customer's problem first, before talking about additional products or services.
• Describes how the products or services will benefit the customer. (7)
Conversely, when a customer service representative didn't seem to pay attention to customer needs (i.e., used a script, continued to sell after the customer said "no", or pushed products that were not useful to the customer), customers were not only unlikely to buy, but became highly irritated. (8)
Cross-Selling Training
Most companies train their customer service representatives to ask questions to solve problems. Transitioning to sales is extending those existing skills, since selling is really nothing more than good problem-solving. At the same time, cross-selling skills can be unique and can be as foreign to customer service reps as another language.
In order to effectively cross-sell through the service channel, start with an assessment of current abilities and compare them to cross-selling competencies. When working with clients to increase sales through their service channel, we at Entelechy start with the following list of cross-selling competencies and customize where needed.
An employee skilled at cross-selling:
• Views cross-selling as an extension of customer service and a way to solve customer problems.
• While addressing the reason for the customer call, listens and identifies clues to additional customer needs.
• Successfully addresses the customer's original reason for the call before discussing additional products or services.
• Uses checkbacks to ensure that issues have been addressed, messages understood, and actions agreed to appropriately throughout the call.
• Throughout the call, listens for clues that may identify the caller's predisposition for cross-selling (both in terms of product/service need AND in terms of receptivity).
• Successfully transitions to cross-selling by asking questions to investigate and/or clarify additional customer needs identified during the call.
• Matches appropriate products/services to meet specific customer needs.
• Positions the customer benefits of these products/services in terms and tone that demonstrate helpfulness to the customer.
• Ends discussion of additional products/services if the customer objects.
• Recognizes buying signals.
• Closes the sale by asking for confirmation by the customer.
Training must provide demonstrations of these skills in action. Charlie Gargaly, customer service master trainer at Entelechy is adamant that the training show the skills being applied by THESE reps in THEIR environment: "Generic training doesn't work here. Customer service reps need to see 'one of their own' successfully demonstrating the skills." Gargaly recommends using video to capture vignettes of real reps demonstrating the specific skills; use the videos in training to demonstrate and discuss the skills. (For a list of customizable customer service modules from Entelechy, visit http://unlockit.com/TS-HPCS.htm.)
Conclusions
It's all about connecting with the customer. If your customer service reps ask questions and position products in the mode of solving customer problems, they'll make the customer feel taken care of and appreciated. When done right, cross-selling and upselling will do more than sell products; it can increase customer satisfaction and retention.
Download your free copy of Effectively Using Cross-Selling and Up-Selling to Increase Revenue AND Customer Service at http://unlockit.com/TS-HPCS.htm and increase the effectiveness of your cross selling efforts.
Endnotes
(1) "DVR/PVR Pave the Way to IPTV," Telephony, Dec 12, 2005, Vol. 246 Issue 24, Special section p2-3.
(2) "Satellite Radio," eMarketer, Nov 2005, http://www.emarketer.com/Report.aspx?radio_sat_jan06
(3) "The Elusive Prize Effective Cross Selling," Insurance and Technology Sept. 2005 http://www.insurancetech.com/news/showArticle.jhtml?articleID=170704148
(4) "The State of the World: Consumption by the Numbers," The Worldwatch Institute, 2004.
(5) Occupational Outlook Handbook, 2006-2007 edition, Customer Service Representatives, Bureau of Labor Statistics, U.S. Department of Labor, http://www.bls.gov/oco/ocos280.htm
(6) "How Customers View Cross-Selling," The Forum Corporation, 2004.
(7) Ibid.
(8) Ibid.
Terence R. Traut is the president of Entelechy, Inc., a company that helps organizations unlock the potential of their people through customized training programs in the areas of sales, management, customer service, and training. Terence can be reached at 603-424-1237 or ttraut@unlockit.com.