Cross-selling: an extra product or service offered to an existing client. Also known as “Add-ons” in tutor parlance.
Profit Margin: Revenue – Expenses / Revenue
Consultative selling: the practice of recommending products or services to meet a client’s true goals.
Tutoring firms can benefit in a predictable and measurable way by cross-selling products to current clients. One of the nice things about cross-selling is that it creates a higher level of engagement between tutor and client.
Most folks reading this now have probably engaged in add-ons (or cross selling) just to provide excellent client service without actually understanding the inherent benefit to their business.
As the Test Prep & Tutoring world becomes more commoditized this client-centric approach allows smaller firms to differentiate from larger concerns.
Said differently, Tutoring is generally customized for a particular purpose to suit a particular need. The closer we get to understanding and addressing those needs, the more unique and individualized our offerings. This tends to make cross-selling both credible and consultative.
How then does one leverage cross-selling to positively impact the business? It comes down to discipline and consistency. While some parents or students will ask directly for help in a subject outside of their primary focus ( think about how often you have heard “my son needs to prepare for the SAT—oh–and do you tutor Physics as well?), other parents may not be as well informed nor as strategic. Ask yourself “has every client from the past asked for additional hours or services?” Most often the answer is no which simply means there is an opportunity for you to start the dialog. Now ask yourself “of the clients that have asked for additional hours or services, have the outcomes benefited my top line?” Most often the answer is a resoundingyes. Assuming this is true, the simple answer is to offer everyone of your clients something more; something valuable…and something directly relates to the client’s need. This is where discipline and consistency come in: in order to create the most value from the practice of cross-selling, one should approach every client at some point with the idea of adding on hours, services, or both.
But some folks feel uncomfortable suggesting additional products or services because it feels less like teaching and more like sales. The reality is, however, that parents or tutoring clients themselves often need and want more. The reasons may vary from wanting a competitive edge on a test, to needing to have a better understanding of an admissions time line, to needing to improve a GPA. If one can shift frames from “salesperson” to “consultant,” a liberating and impactful change can and often does follow. Profitability and providing excellent tutoring services are not mutually exclusive.
Okay, so assuming you have shifted frames from a sales mentality to a learning consultant, you simply need to surface opportunities to help, or to recognize when someone needs help–and then, well, help them. But how do you know what and when to broach the subject? Although this is a complex question I have two fairly good suggestions:
1) Start by truly understanding your client’s needs by spending a good deal of time on the front end of the relationship. If someone is signing up for SAT tutoring you can think “great, I’ll schedule a great tutor and we’ll set up sessions for Tuesday and Saturdays,” or you can seek to learn a bit more about the student’s goals, target schools, high school transcript, and GPA profile. Surfacing some additional information generally helps one uncover the true need behind the initial request. Once these needs are understood, recommendations can be made.
2) Focus on cross-selling right now. This point in the year is typically the high point for all manner of high school standardized tests (ACT, SAT, AP) including subject tests. Moreover, the timing to have a final impact on one’s high school GPA is coincidental as well. Even if you have not spent a great deal of time on the front end, the college admissions time line is working in your favor.
The Business Implications of Cross Selling
Cross-selling is profitable, primarily because one does not need to spend additional $ to market to a lead base. In this regard, the ROI is much higher than the ROI from a new client. Additionally, the back end processes are less difficult to navigate because a rapport has been built with the client, tutors have been delivering service, the location has been determined etc.
Lastly, although the impact to revenue may be small at times, for example when someone adds one or two incremental hours of prep, the impact to profit margin is extremely high. Why? Essentially, with cross-selling the primary and sometimes the only expense is labor which means more of the service revenue travels directly to the bottom line.
If you haven’t begun cross-selling, now is the perfect time. If you are a veteran of the tutoring field, challenge yourself to surface these opportunities with every client. You won’t be disappointed.
To learn more about the content of this article, contact Kevin Organisciak at email@example.com