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Cross-selling 1
Cross-selling
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 service 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
acquisition, the use of one firm reduces the fingerpointing that
is common when a problem occurs in an area that
straddles two or more services; if only one firm is responsible,
fingerpointing 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 account.
Though most companies want more cross-selling, there can be
substantial barriers:
1.1. A customer policy requiring the use of multiple
vendors.
2.2. Different purchasing points within an account, which reduce
the ability to treat the customer like a single account.
3.3. 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 the Sarbanes-Oxley 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. 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?"
http://en.wikipedia.org/w/index.php?title=Sarbanes-Oxley_Acthttp://en.wikipedia.org/w/index.php?title=Auditorhttp://en.wikipedia.org/w/index.php?title=Enronhttp://en.wikipedia.org/w/index.php?title=Arthur_Andersenhttp://en.wikipedia.org/w/index.php?title=Consultanthttp://en.wikipedia.org/w/index.php?title=Professional_serviceshttp://en.wikipedia.org/w/index.php?title=Up-selling
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Cross-selling 2
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.
Examples
1.1. A Life Insurance company suggesting its customer sign up
for car or health insurance.
2.2. 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.
4.4. A laptop seller offering a customer a mouse, pen-drive, and
or accessories.
References
Harding, Ford (2002). Cross-Selling Success. Avon,MA: Adams
Media. p. 230. ISBN 1-58062-705-6.
Wittmann, Georg (2006). Cross-Selling Financial Services to
Small and Medium Enterprises via E-Banking Portals.
Gteborg: Proceedings of 14th European Conference on Information
Systems. p. 8.
http://en.wikipedia.org/w/index.php?title=Home_theater
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Article Sources and Contributors 3
Article Sources and ContributorsCross-selling Source:
http://en.wikipedia.org/w/index.php?oldid=541299997 Contributors:
Alexhuntrods, Astirmays, Axkey, Btyner, Busy Stubber, Chrisgt,
CommodiCast, Crocodile Punter,
Demonkoryu, Discospinster, Dvdpwiki, Dvishnu, Fbooth, GTBacchus,
Hooperbloob, Jacob Finn, L Kensington, LuisVillegas, Martin451,
Materialscientist, Michaelzeng7, NormanEinstein,
Philippe31, Raghunathan.george, Rlevse, Ronz, Satori Son,
Slightsmile, The Land, Thegn, Twalls, Twopenguins, UncleDouggie,
Valiantineus, 88 anonymous edits
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