Cross-Promotion Isn't Just for the Profit

When I discuss the opportunities that cross-promoting varied product and services that a single firm offers, most professionals are quick to latch on to the profit potential.  While that’s certainly true and a desired outcome, there is a subtler and potentially more important result, client engagement. Bringing all the products and services a firm has to bear to a client is a powerful vehicle to becoming an irreplaceable partner.  Cross-promotion is advantageous for the additional profits but even more valuable as a means to solidify client engagement.

The power of cross-promotion became clear to me years ago while I was working with a small group of investment managers.  They were looking to grow their revenue but were concerned about retaining clients and brining in new business.  Most of the investment managers had little time for business development because they were managing client accounts.  During a strategy meeting we went though their core services.  There were two, investment management and financial planning, any other services they offered were subcontracted out and not profitable enough to focus on.  It turned out that 90% of their business came from investment management. 

The natural question was, “Why are only 10% of the profits coming from financial planning?”  Most of the investment managers admitted that they were used to managing the investments they had under contract and rarely discussed financial planning. So as a group every investment manager made a commitment to discuss their financial planning services with their top ten clients.

Months later when we reviewed results, I was blown away. 75% of their clients decided to move forward with financial planning.  Several of the investment managers actually had clients leave competitor’s financial planning services to consolidate their account in one place.  The overwhelming feedback the investment managers got from their clients was that the clients had no idea they offered any financial planning and would prefer to get financial advice from the person managing their investments.

While these results were uncommonly positive based on the preexisting relationship the investment managers had with their client, it’s a good illustration of the power of cross-promotion.  The surface level advantage is that the firm brought in additional revenue from its existing client base.  The deeper advantage is that it laid new inroads into the client relationship and strengthened the client engagement bond.  The stronger the client is engaged with a company the more critical that relationship becomes.  Companies that have cross promoted their products and services have less client attrition because they are bringing all their benefits to bear as a valued partner, not just a vendor of a single product or service.