WHO ARE YOUR BEST PROSPECTS for new business? Your current customers. Yet many resellers find it difficult to get into the habit of cross-selling and upselling the people who already trust them.
“Less than 50 percent, and probably far fewer, channel pros even attempt to cross-sell and upsell,” says Keith Lubner, managing partner of Philadelphia-based Channel Consulting Corp. “It’s eye-opening and mind-boggling how little some are doing.” Lubner works with his IT solution provider clients to list everything in their portfolios, and then provides a map tool to chart which current customers would be receptive to add-on solutions. “People often only think of cross-selling within the same product line, like pitching Azure to Office 365 customers. But when you understand the synergies between vendors you really make service and sales improvements.”
Ronnie Parisella, co-founder and managed services consultant for New York-based channel consultancy the MSP Foundry, sees the same problem. “With every client we make a cross-sell matrix for their particular products and customers to show them where the opportunities are,” he says. “Fewer than 10 percent have a real awareness of what they’re selling to customers and what they could be providing. Customers are buying everything else they need from somebody, so why not you?”
Pay Attention to Profitability and Utilization
The two things you should pay attention to are profitability and utilization, notes Parisella. “The average business owner doesn’t know either number—or how to make them better,” he says. ”After a few hours of our three-day engagement with new clients, they have an epiphany and say, ‘I’ve been doing that wrong,’ and we can start working for real.”
Parisella describes three techniques for identifying upsell and cross-sell opportunities. “First, know your clients. Most MSPs don’t. Dig deep and learn where your customer is spending money. Second, make the client sticky by controlling everything. That means bandwidth, phones, printer maintenance agreements, everything down to their kid’s home backup. Third, never let a customer wait for a callback. If you’re still working on a problem, tell them before they ask. If they have to call it opens a distrust split.”
Most channel pros know the benefits of cross-selling or upselling, but struggle with execution. Lubner did a fast-track study and asked solution provider CEOs how they planned to grow their businesses. “Over 85 percent said cross-selling and upselling,” he recounts. Resellers who use Lubner’s tools and plans report they see significant growth, increasing their service business 40 to 50 percent around the products they sell to clients. “We optimize their product and services matrix and visualize it to help the sales team enhance their opportunities,” he explains.
An aspect of your business that can be optimized is any expertise in verticals, such as financial services, education, or healthcare, to help customers attain their business goals. “Focus on the business outcomes you get by blending and cross-selling all the value-added products and services you bring to the table,” says Lubner.
“Each client does things incorrectly in their own way,” says Parisella. “Is the Office 365 market saturated? Microsoft adds 1.2 million O365 accounts per month. MSPs should be easing that rollout.” He compares the approach of Google Apps to Microsoft Office 365. “Microsoft gave away their Exchange server business. One paid O365 license allows you to bring up one Azure Active Directory Domain Controller, so customers can put their business in Microsoft’s cloud for free. And while I’ve been a Google reseller for years and years, I’ve never met a Google rep.”
He believes the market is still the frontier, and helps his clients make the most money possible on this opportunity. “One O365 sale can be a nightmare for a customer to cut over. Your clients need O365 engineers and deployment managers. Offer those services.”
Lubner drills down as well. “Cross-selling is just one part of it. When prospecting, develop the ability to connect layers on top of layers. You can’t make recommendations to a customer unless you know what products and services you can offer to improve their business.”
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