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While 99 per cent of advisors say cross-selling is critical or important to growing their business, less than half consider themselves effective at it.metamorworks/iStockPhoto / Getty Images

Cross-selling is one of the simplest, yet most commonly overlooked strategies financial advisors can use to grow their businesses.

That’s according to Ray Adamson, vice president of insurance solutions at Equisoft Inc. in Toronto, who has spent a significant part of his career coaching financial services firms and advisors.

Finding new products and services to sell to existing clients is a far more effective approach than focusing on new clients alone, Mr. Adamson argues in How to Create an Effective Cross-Selling System for Your Practice, an e-book he authored that was published last fall.

“The chance you can sell a product to a new customer is about 15 per cent,” the e-book says. “But when you sell to existing clients your odds improve dramatically – to almost 50 per cent. Couple those dramatic splits with the fact that it costs six times more to sell to a new customer than to sell to an existing one, and it’s plain to see that cross-selling presents a tremendous opportunity for growth.”

Mark Halpern, chief executive officer and founder of Inc. in Markham, Ont., agrees with this sentiment – but adds that the practice is equally beneficial for clients.

“Clients appreciate it tremendously. It makes you extremely referable,” Mr. Halpern says. “It secures customers for life. They have no need to go someplace else.”

Although the vast majority of advisors recognize the value of cross-selling, many fail to tap into it, the e-book says. While 99 per cent say cross-selling is critical or important to growing their business, less than half consider themselves effective at it. This is often because advisors focus their energy on reaching new clients, he argues, and forget about the ones they have in front of them already.

“Often, when we’re in business, our mindset is we have to continue to attract and acquire new clients, new relationships. And that’s true, but often what I find is we do that at the expense of our existing relationships,” Mr. Adamson says in an interview. “But if you’re not mining the opportunities within your existing relationships, and [...] ensuring that your existing clients have all of their needs taken care of by the services and products that you can deliver to them, you’re missing out.”

The best approach to cross-selling is to be strategic about it, he adds, and that starts with setting goals. Figure out where you want to see your business go and create a road map to get there, including meeting schedules, conversation templates, client events and other small, tangible checkpoints.

For example, Mr. Adamson suggests using an agenda template for review meetings with existing clients to ensure that each conversation opens doors to cross-selling opportunities.

“[If I were an advisor,] I would review where we’ve come from, determine where we’re at currently and then look to the future,” he says. “My goal in that isn’t to make sales. It’s to do a true review meeting and be an advisor for my clients. And then, if I have sales opportunities, I want to I want to separate that out and do a different meeting.”

Rob Neil, president, insurance advisor and investment representative at Neil and Associates Inc., which operates as part of Quadrus Investment Services Inc., in Grand Prairie, Alta., keeps a checklist of questions handy during client review meetings. That helps him ensure that he addresses every issue his clients are facing.

Mr. Neil stresses the importance of patience throughout the client review process. It may take years to help a client come around to the value of a certain product, but starting the conversation without being “overly salesy or pushy,” will work wonders in building their trust, he says.

“It’s a long game,” Mr. Neil says. “Make sure they know you care, that’s the most important thing. Once they know you care and that you have their best interests at heart, that opens up a lot of opportunities.”

Mr. Adamson also suggests segmenting your client base in developing a plan for cross-selling-related communications. By breaking clients into groups by profitability, advisors can identify who to approach first for annual review meetings, who to connect with remotely via e-mail or questionnaire so they can make the best use of their time.

Although Mr. Adamson is keen on the segmentation approach, he acknowledges that it’s not every advisor’s preference. Many worry that by prioritizing certain groups of clients, they inevitably end up leaving out others who fall into lower-priority categories. But the majority of advisors end up doing this process whether they realize it or not.

In addition, he points out that segmentation should only be used to determine how advisors approach clients proactively – not how they handle clients’ crises or emergencies reactively.

For example, the message in the e-book is that “segmentation doesn’t mean turning away clients who need help, it’s about what you plan to do to sell more to your top clients. I ask concerned advisors a simple question: ‘If someone calls your office today, will they be taken care of?’ The answer is always yes. Segmentation isn’t about limiting service when clients need help. It’s about being clear about how you will sell more to top clients.”