Cross-selling (Part 1): How can firms make the most of their conversations with clients?
In a softer market, professional services firms will need to sell a wider range of services to their existing clients. And there’s much more they can—and should—do in this respect.
Here’s a story: In the middle of an economic downturn, we were working with a consulting firm that wanted to know why it wasn’t winning more business. Then, as now, the key question we were being asked by professional services firms was: “Our pipeline is weaker—is that us or the market?” The truthful answer to that question, then as now, is that it’s both. A better question is: Which is having the greater impact?
With this particular firm, the answer was them. Client after client told us that these smart, lovely, and respected people didn’t come with suggestions about how they could help their clients in other areas. Why not? Because the consultants were worried that they’d be viewed as aggressive salespeople, and that they’d lose the trust of their clients. “There’s a line,” agreed one of the clients we interviewed. “We absolutely don’t want to be sold stuff we don’t need. But these people are nowhere near that line: There’s so much more they could be doing in this organisation.” Nearly twenty years on, those comments perfectly encapsulate today’s issue.
Account management is the primary mechanism through which professional services firms cross-sell. By having conversations with their existing contacts, account managers can explore areas of concern on the client side and suggest ways in which the firm can help.
The problem is that account management has inevitably become less visible—and less important—because of hybrid working. Data that we’ve been gathering since 2017, which tracks the relative importance of factors clients consider when broadly deciding which firm to hire show that account management, which was ranked fourth at the very beginning of 2021, had dropped to 13th 12 months later.
This doesn’t mean that account management isn’t important (our ranking is relative) but it does suggest that it’s not having the impact on clients’ thinking that it might. And how could it? When it’s harder to meet someone for a casual chat, there are limited opportunities to have the informal discussions that surface issues and explore solutions.
But a lack of opportunity to cross-sell shouldn’t be construed as clients’ reluctance to engage. Our latest research into post-pandemic account management found that only 1% of clients don’t want professional services firms to talk to them about possible projects in other areas, while 47% say they’re always interested in what firms have to say. The biggest proportion—52%—are happy for firms to cross-sell, but only under certain conditions.
What are those conditions? The firm needs need to have finished the work it was hired to do and to have done a good job; without this foundation, cross-selling will always be seen as an aggressive sales pitch. It helps, too, if the partner or account manager has visibly demonstrated their commitment to understanding what the client needs—In other words, their suggestion is driven by evidence of a client’s need, rather than a push to meet a sales target.
Price, though not the most important factor, can be an issue. Professional services firms sometimes try to use cross-selling as a means of pushing up their price point: “You bought us to help implement your strategy. We can also help you redefine or improve your strategy, but our daily rate is higher.” However, if firms are planning to use the same people who just completed an excellent implementation project, clients will question why they should pay more—clients associate a fee rate with a person, less so a service.
But the biggest hurdle firms need to jump when trying to cross-sell their services is demonstrating they’ve also delivered strong results in the area in which they’re proposing. Sixty-nine percent of the clients in our research said this was a key condition for a firm to be considered for work elsewhere.
The message for firms, therefore, is not to shy away from cross-selling—but to plan and prepare carefully. Clients are willing to have these conversations, but they don’t believe that expertise is automatically transferable from one service to another. Account managers obviously have a powerful role to play here. Next month, we will explore the critical success factors that define their relationship with clients.