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Casual Articles - The Importance Of Up Selling And Cross Selling To Increase Margins
“If that was the problem, why didn’t she come to me directly?”These are the words of a distraught boss who lost Sarah, his highest performing sales rep to another company. The reason: more money, more opportunity and extra time off to go to Texas to see her ailing mother.The boss, a hotel owner didn’t want to lose Sarah. In fact, he had just invested in sending Sarah to a mandatory training in Atlanta and now he was losing her. Had he known she was quitting he wouldn’t have sent her to the training.As he scratched hi
Let’s take an example:-
Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling ?10,000 per day, the value gap i.e. system or no system, is ?2000 per day. If the system is down it would cost ?200 to ?400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth ?200 to ?400 per hour.
Value Added Argume
As an entrepreneur, solo-preneur, or business owner you are by position a leader. As a result, it only makes sense that you strive to improve your leadership skills and get the most out of life for everyone in your sphere. Here are 10 ways to improve your leadership skills:1. Have a clear vision of yourself, others, and the world.Who are you? What do you stand for? What is your life’s purpose? What is your business purpose? How do you want to influence others? How do you want to contribute to others? Start by answering these
Value is the worth of something when compared with something else. For example, value would be a high pay back for small outlay, also discussed in terms of ROI i.e. return on investment. Pay back is the tangible return delivered by the benefits of your products and services. The greater the pay back, the greater the value to your customer and customers certainly want value.
The Value Formula:
The formula for calculating value is the benefit minus the cost of achieving or acquiring the benefit i.e. value + benefit - cost. So, it is important that we use rigorous questioning techniques to uncover as many needs as possible, for which we can offer, benefit oriented solutions. We need to be able to explain and sell benefits. The more needs we can uncover, the more benefits we can deliver, the more benefits the greater the pay back, the greater the pay back the higher the value, the higher the value, the better the chance to up sell and cross sell.
Proving Value:
Using the funnel questioning technique will uncover needs, if they are there to be uncovered. However, it is one thing to uncover the need it is another thing to prove that there is adequate pay back and value in fulfilling the needs.
Having uncovered the needs we must probe and find out as much as we can about those needs and the implications to the customer if they are not met or fulfilled. We do this by asking past, present and future questions i.e. “How did you use to do this?” (Past), “How do you do this now?” (Present) and “How do you plan to do it?” (Future).
What we are trying to establish is the difference between what the customer used to do and how he does it now. If we can establish this then the comparison between what they are presently doing and what they may be able to do based on our solution, will be easier to grasp. This is important, because the difference between them doing something and not doing it is the “value gap”. We need to find value gaps that we can attach a price to, so that we can justify the benefit in terms of added value.
Let’s take an example:-
Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling ?10,000 per day, the value gap i.e. system or no system, is ?2000 per day. If the system is down it would cost ?200 to ?400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth ?200 to ?400 per hour.
Value Added Argume
Job loss affects most of us like any
other loss in life. Yes, there are other
losses that are greater, but this one
comes close too!From my experience, job loss can
make anyone sick! There can be
terrible anger; anger which turns
into depression. Even euphoria,
has its other side; depression is
it.Relief at getting out of a bad job
should be enjoyed while it lasts.
Relief and euphoria can prepare
the job loser with a second wind!It's at the time when anger,
depression and frustration set in
that the
The Value Formula:
The formula for calculating value is the benefit minus the cost of achieving or acquiring the benefit i.e. value + benefit - cost. So, it is important that we use rigorous questioning techniques to uncover as many needs as possible, for which we can offer, benefit oriented solutions. We need to be able to explain and sell benefits. The more needs we can uncover, the more benefits we can deliver, the more benefits the greater the pay back, the greater the pay back the higher the value, the higher the value, the better the chance to up sell and cross sell.
Proving Value:
Using the funnel questioning technique will uncover needs, if they are there to be uncovered. However, it is one thing to uncover the need it is another thing to prove that there is adequate pay back and value in fulfilling the needs.
Having uncovered the needs we must probe and find out as much as we can about those needs and the implications to the customer if they are not met or fulfilled. We do this by asking past, present and future questions i.e. “How did you use to do this?” (Past), “How do you do this now?” (Present) and “How do you plan to do it?” (Future).
What we are trying to establish is the difference between what the customer used to do and how he does it now. If we can establish this then the comparison between what they are presently doing and what they may be able to do based on our solution, will be easier to grasp. This is important, because the difference between them doing something and not doing it is the “value gap”. We need to find value gaps that we can attach a price to, so that we can justify the benefit in terms of added value.
Let’s take an example:-
Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling ?10,000 per day, the value gap i.e. system or no system, is ?2000 per day. If the system is down it would cost ?200 to ?400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth ?200 to ?400 per hour.
Value Added Argume
You're now CIO - welcome to the hot seat!The CIO is probably the hottest seat on the "C" suite in terms of pressure and demands and that gets reflected in terms of a short tenure in the job. As individuals, they are typically bright, intelligent, hard-working and committed - and yet when you visit the offices of their colleagues frequently they are demanding that their CIO needs to go and go soon.How long does a CIO last?In the bad old days around the turn of the millennium - in the times of the dot-com crazy years of
Proving Value:
Using the funnel questioning technique will uncover needs, if they are there to be uncovered. However, it is one thing to uncover the need it is another thing to prove that there is adequate pay back and value in fulfilling the needs.
Having uncovered the needs we must probe and find out as much as we can about those needs and the implications to the customer if they are not met or fulfilled. We do this by asking past, present and future questions i.e. “How did you use to do this?” (Past), “How do you do this now?” (Present) and “How do you plan to do it?” (Future).
What we are trying to establish is the difference between what the customer used to do and how he does it now. If we can establish this then the comparison between what they are presently doing and what they may be able to do based on our solution, will be easier to grasp. This is important, because the difference between them doing something and not doing it is the “value gap”. We need to find value gaps that we can attach a price to, so that we can justify the benefit in terms of added value.
Let’s take an example:-
Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling ?10,000 per day, the value gap i.e. system or no system, is ?2000 per day. If the system is down it would cost ?200 to ?400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth ?200 to ?400 per hour.
Value Added Argume
The history of the downfall in companies has consistently shown a common weakness: Not letting go of what they are not great at executing.Core competencies are the identified areas of expertise a company has leveraged in the marketplace. What these companies rarely are capable of is creating value in non-core functions like human resources, technology, sales & marketing and transportation.Third party outsource management companies are flourishing as more businesses come to grips with the reality of higher efficiencies and
What we are trying to establish is the difference between what the customer used to do and how he does it now. If we can establish this then the comparison between what they are presently doing and what they may be able to do based on our solution, will be easier to grasp. This is important, because the difference between them doing something and not doing it is the “value gap”. We need to find value gaps that we can attach a price to, so that we can justify the benefit in terms of added value.
Let’s take an example:-
Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling ?10,000 per day, the value gap i.e. system or no system, is ?2000 per day. If the system is down it would cost ?200 to ?400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth ?200 to ?400 per hour.
Value Added Argume
Before you even begin to look at engaging seriously in lots of sales networking effort, it is useful to look at your own temperament or disposition,. This is the individual’s internal desire to network and to find value and enjoyment from the whole process of building relationships, which will in turn lead to increased salesFor some people this will be an almost irrelevant issue to debate. Their motivation to want to talk to people regularly and to network is naturally high. Talking to strangers in supermarket queues,
Let’s take an example:-
Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling ?10,000 per day, the value gap i.e. system or no system, is ?2000 per day. If the system is down it would cost ?200 to ?400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth ?200 to ?400 per hour.
Value Added Arguments:
You should always be looking for opportunities to offer more features that will be of benefit by asking the customer to tell you areas in which they would like to see greater support or additional services. If you say “Mr Smith we would like you to upgrade to our gold support agreement, you will receive earlier notification of software upgrades” the usual response will be, we don’t need them. Far better, using reasoning and questions to manoeuvre the customer into a position where they ask or enquire about additional services, explain to you what the possible outcome would be if they did not have those additional services and then you present a value added argument, to fill the gap.
Summary:
The best product, at the best price does not always win the order; we have all been outsold by a competitive salesperson probably offering less of a solution and sometimes even at a higher price. By selling benefits, not telling about features, the prospect will understand the pay off that your solution will deliver. Do not leave them to work it out for themselves, they might not bother!
If you can identify the need for more services and explain, using benefits, how you can meet those needs, it will be a lot easier to up sell and cross sell.
Copyright © 2006 Jonathan Farrington. All rights reserved
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