Monday, December 06, 2010

Going for Broke could leave you broke

Advice today from Pat Mcgraw:

How Do You Eat An Elephant?

Posted: 29 Nov 2010 06:00 AM PST

Elephant and Dust by Namibnat

Congratulations – you just turned a prospective customer into a first-time buyer!

Now what? Do you turn your attention immediately to other prospects? Or do you have a plan to further develop your new customer so that you can capture more and more of their wallet/budget?

What’s your strategy for cross-selling and up-selling?

Cross-sell: To sell a product or service that complements or adds value to another purchase, also refers to selling an existing customer another product or service, or the sale by a salesperson of some part of the company’s total product range for which another division or salesperson has prime responsibility.

Up-sell: 1) prompting customers to buy upgraded products when they had intended to buy something of lower value. 2) to sell a prospect or customer a product or service of higher value or a series of additional smaller priced items.

Early in my career, I was given the opportunity to join a small, family-owned business as their director of marketing. Of course, part of my duties included major account sales since “….marketing is an expense and we need sales if we want to hit our goals.”

About 30-days into my new job, I somehow managed to get an appointment with a senior-level executive with one of the larger employers in the state at the time. This was someone who could have a very significant impact on my employer’s revenue and profits.

Now, there was no way this person was going to suddenly shift their entire budget over to my company – we would need to start slow, build trust, play to our strengths and come up with a strategy for picking up new pieces of business over time.

If we sold him one service and failed to work the account, we were leaving money on the table and blowing a fantastic opportunity.

So, I decided the best way to eat this elephant was one bite at a time.

We started off with small, emergency projects that his current vendors struggled to handle. Over time, as we proved ourselves, we saw more and more projects come our way.

Within 6 months, we had 2 dedicated employees working on this account and they were becoming a major part of our revenue stream.

One day, the client had an emergency and I happened to be in his office when he found about it. Since it was something we could do, I told him we would be happy to help out – and we knocked that opportunity right out of the park.

Three years later, our overall business had tripled and this one account was worth about 5% of the total revenue. We had managed to takeover about 75% of their business by then and we probably could have taken more. But we didn’t want to rush it – after all, successfully eating an elephant requires patience, determination and a long-term strategy.

So, what’s your strategy for cross-selling and up-selling? How will you capture a greater share of your customers’ budget over time – becoming their primary supplier rather than a secondary or tertiary supplier?

If you have stories of success – please share! I would love to hear how others have grown relationships over time.

Sphere: Related Content

No comments: