Thought leader: Cross selling – fact or fiction?

It is a part of the mantra of most firms that cross selling is a ‘good thing’ and something everyone should practice. Partners are encouraged to cross sell (and, in some cases, rewarded for doing so) and it has become almost an unquestionable priority.

The critical issues are what is actually meant by cross selling and whether it is always a good thing. The first issue is important because many partners hesitate to cross sell, as they define it, because they do not believe that they are very good at it. The second issue is important because it deals with the process of cross selling.

Sophisticated clients segment legal services by the value of each service to them, not to the lawyer. The higher the value to the client, the more likely they will want to meet with the people who will provide the service. A person who is not part of the ‘supply team’ is unlikely to be able to sell the service. All such a person can do is to engineer an introduction between the client and the key members of the firm who will provide the service.

Is this cross selling? Well, in one sense, maybe, but in reality, it is cross-referring or facilitating an introduction. The sale is actually completed by the people who will deliver the service. Partners who feel they lack the knowledge and skill to cross sell should focus more on ensuring a client meets a number of people in the firm, people who are very good at providing services the client requires. Introductions are usually seen as less fearsome than selling.

Cross selling can occur at the lower-value end of service provision. Where a client is already using the firm for a particular service (or services) they might be cross-sold for another service that is of low importance and where the price is right.

Cross selling might also occur at higher-value levels where the firm has a good reputation in a particular service and the client has a high level of trust in the partner doing the cross selling. Situations such as this, however, are somewhat unusual.

Is cross selling a good thing?

It can be good for the law firm. Evidence demonstrates that a client is more ‘locked in’ to a firm when the client is buying three or more separate services from the firm. Developing existing clients should carry lower marketing costs than developing new clients. Hence, a firm can benefit significantly.

It is not as clear, however, from the client side. Clients complain of being pestered by partners to buy additional services from the firm when the client is perfectly happy with their existing suppliers. Some partners seek to convince a client to buy services that the client never, or hardly ever, requires. Many clients become resistant to cross-selling overtures because they are so badly managed.

Convincing a client to expand the range of services they buy from one firm requires a high degree of skill. Understanding the needs of the client, knowing what might trigger a switch in suppliers and being able to persuade the client that an introductory meeting with key individuals in other practice areas, is a skill that needs to be honed. Very few partners are able to do it naturally.

So, yes, seek to expand the range of services that a client buys from a firm. It can be good for both the top and bottom line. But treat it more as a widening of contacts within the firm and, above all else, do it in a professional and skillful manner.

Alan Hodgart is the founder of Hodgart, an international consulting firm. He can be contacted at mail@alanhodgart.com