The concept of cross-selling is a topic of hot ethical debate. Enron has helped fuel this debate in accountancy. A Wall Street Journal article trumpeted: “Before Enron, greed helped sink the respectability of accounting” and went on to rail against accountants selling “anything under the sun”.
What can we – in construction – learn from this? Is cross-selling bad per se? Or does it depend on how and why it is done?
At a recent partner retreat, a Chairman was heard to suggest business goals, which included “squeezing more out of our clients” and “exploiting client relationships more”. How would you feel as a client reading those words, especially if the next day your client service partner suggested it would be a good idea to arrange a client service review meeting?
It is possible that the Chairman may have been misquoted, but it is also possible that he is being ‘misquoted’ daily within the firm.
Another commonly stated and misguiding aim is to “win a greater share of our clients’ wallets”.
In the early stages of a project, I asked the members of a key client team to describe a two-year ‘vision’ for their client relationship; what would success look like in two years’ time? This is what they came up with:
- Achieve 40% of the client’s total spend
- Win all major development work
- Secure work in the US, Far East and Australia
- Target overall profitability to be 20% above the firm’s average
On the face of it these are pretty focused aims. However, there is nothing here about (for example) increasing investors’ return on investment or about the client increasing their market share by 10% in selected markets through the retention of more key personnel. In fact, there is nothing here about the client at all.
But does it matter why we are looking to cross-sell? After all everyone knows that, at the end of the day, the reason we are in business is to make money.
Here is why it might matter a great deal. I looked up the word ‘ethics’ for a seminar we ran recently and this is what I found:
“ETHICS represent a norm or standard of behaviour in support of a set of VALUES which in turn depend on PURPOSE.”
Depending on the purpose, different things will be valued and different behaviour will be the norm. If ‘a greater share of my client’s wallet’ is my purpose then anything that achieves that will feel acceptable, providing I do nothing illegal or unprofessional of course. I might, for example, try to sell my clients all the services my firm has to offer, whether they are interested or not. In meetings I might listen out only for problems rather than trying to get a full understanding of the client’s situation. I will be tempted to pounce on opportunities as they appear until the client may start to feel a little punch drunk.
And yet the greatest shame is that as a firm we probably have something to offer that would be of immense value to the client and his business. The problem is that the client may have stopped listening some time ago when I tried to sell him something he did not want.
But what if my, and the firm’s, avowed purpose is different? What if I am focused on building long-term client relationships and am genuinely only interested in doing the things that would add real value to the client’s organisation over the long-term? Then my behaviour will be different. Then I might, invest time in understanding the business, with real enthusiasm. I might find non-chargeable ways to constantly help my contact and his business. I might recommend non-competing advisers who can add something special even if their fees might come from the same pot as mine this year. I might even recommend competing advisers for some of the work because they are better at it, at least in the short-term!
But I would also be exploring ways in which other services we offer could be of value. On that basis, and with the client’s blessing, I would be best placed to develop a multi-service relationship with the client and their organisation. I would be cross-selling.
Purpose is central to behaviour. So, Rule One of ethical cross-selling is: “What’s in it for the client?”
However, even if our motivation is pure, will our clients believe us? That will depend on how they see us. For ethical and successful cross-selling the key is to be, and to be seen as, a trusted adviser.
For that reason Rule Two of ethical cross-selling is: “Trust comes first – fee income comes later”. If you are a trusted adviser cross-selling is easy.
Therefore if cross-selling is a key strategy of the firm, the first priority must be to develop the skill of fee earners in building and maintaining trust. It means developing their ability to convince clients of their credibility, competence and compatibility.
Credibility (meaning that the client believes us and believes in us) comes from confidence (in all situations, not just in talking about our ‘specialist subject’), initial impact, honesty and delivering as promised (everything, every time).
Competence (meaning that the client believes we can do what we say we can do) is demonstrated through knowledge and expertise, a track record and by using searching (non-manipulative) questions as you seek to genuinely understand the situation and the client’s business – not just his or her ‘needs’ or ‘problems’.
Compatibility (meaning that the client believes he or she can work with us) is built by demonstrating interest (not just taking the client out to lunch), active listening, adapting behaviour (not just ‘being ourselves’), showing we care and revealing vulnerability (which is in conflict with many professionals’ instincts).
Are these behaviours teachable? Yes – some but not all. Are they all? No. Of key importance are the core values of the person doing the cross-selling.
Ethical cross-selling is done by people with core values that characterise a trusted adviser. These values must be more than skin deep! They need to be genuine and held strongly enough to withstand the many temptations towards short cuts and quick rewards.
So, does cross-selling deserve a bad reputation? No, but it depends on the ETHICS of the situation: Why cross-selling is done – the PURPOSE;
How cross-selling is done – not through a process of sell, sell, sell; and
Who does the cross-selling and what they genuinely believe is right.
Our experience tells us that the ethical way to cross-sell is also by far the most effective way. Firstly your clients will prefer it and secondly your fee earners will be comfortable doing it.
And, as an added bonus, the name of your firm will never appear in the newspapers for the wrong reasons!
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- Making a Breakthrough Published 14th May 2009