Cross-Selling Is An Untapped Gold Mine

Many producers have fallen into the proverbial cross-marketing trap of just telling their clients they have other products available–such as life and health insurance, and financial planning services. Indeed, it would not be uncommon for a p-c producer to tell the client: "We have an employee benefits department that can help you with that, too, if you are interested. Let me know and I will get them to call you."

That is cross-marketing. It is making the client aware that there are other products available through your firm. Too often the clients response is: "We are happy with our current situation, but thanks for asking." It is not cross-selling in the truest sense of the word.

Cross-selling, at its very core, is no different than selling a new piece of business. Yes, the originating producer has a relationship now, but there is still an incumbent that owns the line of business that the cross-seller wants. Plus there is a decent chance that the buyer is fairly satisfied with his or her current employee benefits agent.

Cross-selling is both art and science. To me, the art of cross-selling has to do with the originating producer knowing when to bring in a partner who has different products and expertise. It has to do with timing, empathy, listening and relationship skills.

But there is a science to this business as well. The cross-seller must think of every commercial account as an opportunity. It is an opportunity that some other agent already has, and it must be looked at as a new sale.

The cross-seller must look at every opportunity with the attitude that someone must lose for him to win. He must acknowledge that there is an incumbent who owns the business, and only one of them will receive a commission.

This attitude and philosophy will create a more assertive and strategic approach, and will significantly increase the probability of winning and booking the new revenue.

For the sake of clarity, let us identify the four parties in a cross-selling situation.

The Buyer: A client of the agency in one line of business.

The Producer: The first one in–the one who sold the business and is working to retain and expand the line of business.

The Cross-Seller: Has an opportunity to obtain a new piece of business, but does not have it now.

The Incumbent: Has the line of business, such as group health, that you want.

Tapping into this gold mine of revenue takes work and pays significant dividends for the agent and agency, but not all agencies have benefited from it, for two reasons.

The producer does not create cross-selling opportunities, because the producer never asks.

The producer asks for the opportunity but gets told no, not interested.

With a little thought you could easily determine several reasons that the originating producer never asks.

No confidence in his cross-sell partner.

No money in it.

Not worth the risk–just does not want to take a chance on screwing up a good relationship.

Superiority complex–as in, nobody is as good as me.

I am tired of taking them in on all my accounts and never getting anything in return–the "leach" theory.

Whether these are good reasons or not, it hardly matters since they are real in many producers minds. As a result, the cross-seller never even has a chance. The solution–change the people, change the compensation and change the culture.

Lets start with a situation in which a producer asks for the business, but is told no, not interested

Now, we are getting to the real problem with cross-selling. Most of the time, the cross-seller has no strategy. They have not done their homework on the opportunities where they want to get introduced. They cannot tell you who the incumbent is on the life and health part of the business. They cannot effectively articulate how they are better or different than the incumbent.

As a result, the originating producer does not have the ammunition to get the client interested in seeing the cross-seller.

A cross-selling opportunity should be looked at exactly the same way you would a brand new piece of business. It should start with a pre-call strategy. What is that? Let me explain.

A pre-call strategy on a new account starts by finding out who influences the buying decision within your prospective account–such as the CFO, COO, the Human Resources Department, the president. It then causes you to find out who the incumbent is (agent, agency and carrier) and how long they have had the account. (A pre-call worksheet may be downloaded from The Wedge Group Web site at www.thewedge.net/forms.)

Now that you have the information needed, ask yourself this basic question: "Why do they (the prospect) need me?"

They need you because of what you do that the incumbent does not–your proactive services and your strengths where the incumbent has weaknesses so that this prospect is being underserved.

It is your responsibility, as the cross-seller, to articulate what makes you different and better and give it to the producer, in the form of sound bytes. With this information, the p-c producer has the ammunition to blow this opportunity wide open, and radically improve your chances of winning and booking the commission.

It is time to stop purely relying on your good name and experience, and hoping that the p-c producers client relationship is enough to get you in the door.

What is the secret to cross-selling? Without a doubt, a huge part of cross-selling is for the cross-seller to have a clear and concise competitive advantage. I believe that knowing these "Four Steps of Competitive Advantage," shortened to KASS, will help:

Know It–It is imperative that you absolutely know your competitive advantage, which can be defined as areas where you have strengths and your competition has weaknesses. There are many incredibly talented and skilled producers. They have years and years of experience and have helped numerous clients, but they cannot clearly define how they are better. You must know it and be able to define it.

Articulate It–It is not enough to know that you are better; you must be able to clearly and concisely articulate the differences. If you know in your heart and in your head that you are better than your competition, but you cannot effectively articulate how you are better, it is as if you are not better–you must be able to articulate the differences.

Show It–You must also be able to show it. That means having written service timelines delineating what services you will provide and when. It means having unique worksheets, spreadsheets or reports that really help a client understand what they have, what they need and what you will do about it.

Share It–When you know your competitive advantage, you can effectively articulate it and have a means of showing it, and then it is easy for the originating producer to share it with his/her client and get you in the door.

Seeing these golden opportunities for what they truly are will put you on the path of making more money in a shorter period of time. Now, put what you have learned into action, for without action this is just another great column.

Randy Schwantz is president of The Wedge Group in Argyle, Texas. He is author of "The Wedge: How To Stop Selling and Start Winning" and "Breaking The Sales Barrier: How To Develop Million Dollar Producers," both published by The National Underwriter Company, parent of this magazine.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 20, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.