Many research organizations after conducting research over many years have concluded that, it costs less money and time for maintaining the existing clients instead of attracting new clients. It seems selling more products to existing client is easier than acquiring a new client. It just needs to make a good relationship to get advantage from existing clients.
Generally, cross selling is a selling technique which is used to sell finance related or the complementary products. This can be understood by the example of an insurance broker offering different types of insurance products to his client, by focusing on protecting the wealth of the client. There are two types of cross selling: Upselling and down selling.
Upselling is a selling tactic where the seller makes the client to buy or invest in more expensive financial product in an attempt to make more profits. For a given product or combination of products, the seller specifies the more expensive financial product or suggests a huge investment decision to his clients for making profits in the form of commissions or the interests obtained from the investment. Thus a successful upseller is aware of his client’s background and budget, and understands better what the particular client might need.
Whereas, down selling is a selling technique, where the seller suggests a cheaper financial product or a less investment scheme as an alternative. Here, the seller or the broker agent suggests client to invest in schemes which will give more profits to the client rather than the seller. He may suggest for the systematic investment plan in mutual funds, variable recurring deposit etc which reaps high returns in long term investment.