Cross-selling is an effective tool for making a profit

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The effectiveness of the development of financial institutions directly depends on the quantity and quality of services sold. So, for example, in the banking sector - these are sold loans, installments, loans and other services, in insurance companies - these are insurance policies for cars, real estate, life insurance.

The sale, together with the goods and services necessary for the client, of some additional additional goods is called cross-selling. In other words, it is a cross-sale of services or products.

The main task of such methods is to increase the income side of the organization. Often, products that are sold using these methods are highly profitable, but less popular, and therefore they are offered as a "load" with other popular products.

Types of cross-selling

Conventionally, they can be divided into sales in the service sector and in the field of goods. In the service sector, this type of sales is often represented in banking and insurance activities.

The difference between this sales technique in different business areas

Cross-selling banking products is a combination of services that differ in their purpose. For example, if a person has a loan, you can also sell a payment card along the way. Thus, the load on the client will be much higher, the profitability of the institution will be higher. Another example: a company applied to a bank for a line of credit. The bank decided to lend, but taking into account the opening of a current account and the transfer of a salary project.

In this case, we see a voluntary-compulsory variant of such an implementation of a current account and a salary contract.

Cross-selling in insurance has also become very popular. Almost any insurance company strives for comprehensive customer service. That is, if you contacted an insurance company to insure real estate, you will definitely be offered other types of insurance (life, car, etc.). Selling other products of an insurance company along with the main one is a cross-selling in insurance.

Trading and Selling Methods

Cross-selling in retail is a little different from cross-selling in finance. Here they are presented more as an addition to the main sale than as a separate product. For example, when buying a smartphone or computer, you will be offered an additional service or software for a fee. In this way, goods that sell poorly are promoted.

What are the benefits of these methods?

• Promotion of services that don't sell well.
• Cross-selling often generates high returns,Therefore, the use of such a technique significantly increases the financial performance of the company. The return on equity and the liquidity of the organization increase, which significantly improves the statistical indicators.
• The desire of organizations to move to the European quality of cooperation, where a significant part of the profit (up to 30 percent) enterprises receive from additional services that are sold through cross-selling.
• The use of this technique enables the organization to make "universal soldiers" out of its managers, since the implementation of this method in practice is possible only with excellent knowledge of all the company's products by the staff.