Question

Please answer in as close to 2 paragraphs as possible. Give examples and break the answer down thoroughly, please.

What are the benefits of cross-selling and referrals?

Answer 1

Cross selling is one of the technique used in the market place that has many benefits. The first benefit is the retention of existing customers to the company. In cross selling, a company sells other company products to the existing customers. For example, a financial intermediary sells its mutual funds to those customers who have already purchased the life insurance policy from the same financial intermediaries. It means that company is able to generate business from the existing customer base. It increases the value, because it does not require expenses in general. The second benefit is the increase in sales revenue as well as profits of the company. Since, it is the another dimension of business development using the existing customers as a target audience, then it enhances the revenues earned by the company. It also increases the customer life time value that happens as one customer buys relatively more products from the company. The third benefit is the stronger integration of the company and its products within the needs and demand of the customers. Specifically, from a B2B perspective, a business that buys the products, becomes most valued client of the company. Besides, other benefits are the development of trust and scope of getting new customers.

Regarding referrals, it is a form of initiative in sales and marketing that brings many benefits to the company. The first benefit is the enhanced value of trust, that is shown by the existing customers who make a referral of the products of the company. It makes an important statement about the quality of product and the quality and credibility of the services offered by the company. The second benefit is  the increased level of revenue generation opportunities as customers created via referrals buy the product and help company earn higher revenue. Besides, it also improves the return on investment made by the company on its marketing initiatives. The third benefit is increased level of retention rate. It is also an outcome of trust and value created upon the customers. It gives long term benefits to the company that increases the overall marketing reach of the company. Besides, the other benefits are the increased level of engagement, automation of the sales and marketing process and the creation of brand awareness and value positioning among the customers.