By: Sid Shah and Michael Soto
Large firms have vast internal resources that often go un-leveraged. Among these are an array of existing relationships with clients. It is common knowledge in the sales world that it is far easier to upsell to an existing client than to undertake the business development process to identify, pitch and win a new one. Furthermore, when done right, cross-selling helps clients too since the client does not need to expend resources to go find another company, build and manage multiple relationships. However, while cross-selling is a commonly cited aspiration, actually doing it runs into a host of difficulties. Morten Hansen has identified 4 main barriers to collaboration a) Competition, b) Narrow Incentives, c) Too busy d) Fear. Modifying incentive structures can be politically difficult but nonetheless seem technically more straightforward than transforming corporate culture and shaping relationship networks effectively. For this reason, I’ll focus here on the latter.
Let’s assume that you run a large firm and are interested in promoting cross-selling. You’ve set up the right incentive structures so that employees benefit from collaborating and don’t see their work as a zero-sum game, where someone else’s benefit is their loss. And yet, employees persist in working with their own clients and either actively withholding information that can benefit their colleagues or simply not proactively sharing it. You may be tempted to set up a ‘Cross-selling’ initiative to highlight to your employees the importance that senior management places on this activity, but I would suggest you don’t do that. Cross-selling is ultimately about relationships and trust. Before I’m going to introduce my client to a colleague I need to 1) know what services my colleague can offer 2) trust that my colleague will do a stellar job, knowing that experience will impact the relationship I have with my client – even if that’s another project that I’m not directly involved with.
I’d argue that the second is often unaddressed, perhaps based on the belief that as employees they are required to operate in the best interest of the firm. Although if they don’t trust a colleague it may in fact be in the best interest of the firm to not lose that existing client in the process of trying to upsell.
A common response to the first prerequisite is to create a database or directory listing out the array of services the firm offers, with a description of each, who to contact for more information etc. Anyone who has looked at one of these may recognize the immediate sense of (superficial) understanding followed by a return to the previous task at hand.
The key to each of these challenges is building strong, authentic relationships. But before you run to organize a networking event under the umbrella of a corporate wide cross-selling initiative think back to your own experience at those. At their best, they are a fun gathering of a large group of people who end up speaking to those they already know or exchanging business cards with strangers under the false belief that is what ‘networking’ is all about. As was recently stated in an HBR article, the best way to build the value of your network is to avoid traditional networking events altogether.
The reason is that these events are too transactional, too focused on the deal and therefore not sufficiently focused on the main prerequisite – building the relationship.
As a leader who wants to promote cross-selling your first task should be to foster an environment where relationships blossom across department lines, not just for the deal but before it and even without sight of it. As the title of Harvey Mackay’s book states, “Dig your well before your thirsty.”