Almost every business has a core product or service that accounts for most of its profitability and attracts more customers. However, it is also common to have other secondary products, which have a good profit margin but are not the main attraction. If you want to optimize your sales, then you must implement a cross-sell strategy.
This method is effective in virtually every type of business, including an Insurance Broker. It’s just a matter of understanding how it works and what to do to put it into practice.
Follow and understand more about cross-sell and its benefits.
What is cross-selling?
Translated as “cross-selling”, cross-selling is a sales strategy that consists of offering a complimentary product along with the main sale. For example, a drink that comes with a sandwich at a diner. Within the context of an Insurance Broker, if someone takes out car insurance, you can also offer life insurance and vice versa.
Be careful not to confuse cross-sell and up-sell. The first is focused on delivering a greater quantity and variety of services, while the up-sell tries to increase the value of the sale by offering a similar product, but of higher quality. Still, in the previous example, it would be like recommending accident insurance with broader coverage.
It should also not be confused with the combined purchase, which is when two or more products are mandatorily sold together, even if one of the components is not of interest to the customer. This is a prohibited practice in article 39 of the Consumer Protection Code.
What are the advantages of cross-selling?
This sales strategy is widely used in various sectors and brings very evident results. Some of the main advantages that we can highlight are below.
Increase in average ticket
The average ticket of a company is the average of the value of all its sales. For example, if two sales are made, one at R$10 and the other at R$20, the average ticket of the two will be R$15. If this number is very high, it means that each closed deal brings a higher return for your business.
Cross-selling is a very effective tactic to raise the average ticket. Each successful cross-sell implies a higher total obtained in the same sale. Even if it is a low-value product the principal, it still adds to its profitability in that period.
Greater variety of products and services
Having a product that will be your “flagship” is a good strategy to optimize your sales. Thus, the focus of your promotion and your other strategies can be directed to a more specific group of customers, something that improves the efficiency of your sales.
However, if you want to broaden your target audience, it is worth expanding your range of products and services. With more complementary options, your customers will have the opportunity to customize their purchases and get a combination that best meets their specific demands.
Raises customer satisfaction rating
Many customers who come to their CLU Insurance Broker do not understand exactly what they need in terms of coverage. Most are interested in additional benefits in contracting the service, but do not know about them or do not know what their cost-benefit ratio is.
In this context, cross-sell is also a way to bring more satisfaction to your customer. If you know your audience’s needs, then you can offer the complementary product that best meets those expectations. Over time, this practice will also contribute to the reputation of your business and lead to attracting more customers.
How to apply the cross-sell in the Insurance Broker?
As a strategy, cross-selling is straightforward: offer a product that complements the main sale. That’s why there are so many ways to put it into practice. However, it is common to have some doubts at the beginning. Here are some tips and best practices to make your implementation easier.
Know your customer profile
The most important thing before starting to cross-sell is to understand the type of customer you are serving and what their pain points are. Within an Insurance Broker, this task is usually easier, as you normally work with consultative sales and the recording of information on an ongoing basis. If a professional is in direct contact with the client, it’s easy to ask what their demands are.
Doing market research and tracking changes in your target audience is still important. This helps prepare Brokerage professionals to better serve customers and offer the right product.
Choose relevant products
One of the key features of cross-selling is that the secondary product must always be complementary and relevant to the main product. You could offer a chair as a cross-sell of a sandwich and vice versa, but the customer looking for one of these products is unlikely to be interested in the second.
The same principle applies to the sale of insurance. If a customer comes to your office looking for insurance for a property, for example, offering insurance for their car is not necessarily the best idea, as it does not correlate with the previous product. It might work, but the chances are lower.
don’t force the sale
The biggest mistake many businesses make when cross-selling is trying to sell too aggressively. Considering the previous example, let’s say the seller insists on offering home and car insurance in the same package, even if it’s not in the customer’s best interest. The customer is likely to give up the purchase just because of the inconvenience.
The goal of every cross-sell is to close more deals, yes. But for that, you need to add more value to the customer. Without it, you will lose more sales than you gain with this strategy.
Now that you know cross-sell and know how to apply it, it’s time to adopt this strategy in your Brokerage. Don’t forget to track audience opinion and total cross-sell to see if you’re getting the results you want.
Do you have any more questions? Then leave a comment with your question below.