Don’t put your eggs in the same basket!

Inspired by Warren Buffet this statement simply means that in the context of investing one should practice management of associated risk by investing in different areas. It has never happened that things go bad in all areas at once. This article however, will expand on the practical aspect by sharing renowned tactics the author also implements in order to show the reader how the chasm between theory and practice can be bridged. Knowing a great piece of advice is good but executing it is everything!  

Cross selling

What is cross selling?

Cross selling is selling a related product to an existing customer. An example of cross selling is when mobile network operators (MNO) also sell cell phone hand sets to their subscribers. Another one is in the multi level marketing sector when a distributor also sell membership packages to food supplements customers .  A barber can also sell after shave lotion, skin care products and perfume to his or her regular hair cut clients. A cell phone repair guy can offer premium services which are provided at a customers’ place away from the workshop and these target clients who are sensitive to leaving their gadgets.

I think through these examples you might have gotten the idea about what cross selling is all about. If you have your own examples you are welcome to share them in the comment section below. Now lets go to benefits. What are benefits associated with cross selling ?

Benefits

Why cross selling?

Through cross selling, selling is easy because its built upon existing trust already available in current clients. Your current clients become a core upon which to build a bigger market share. People buy if they see value and value is a matter of belief. When people trust you already its easier for you to make them believe in the new product you are introducing .

So how does one get started with cross selling? To answer this lets look at one of the ways that enabled me to easily get started with cross selling called referral contracts.

Referral contracts

How to get started with cross selling?

A referral contract is when you agree to share income with a chosen supplier of quality products or services for cross selling. The idea here is you don’t need to have capital for new products but simply identify a business already selling the same products and become its referrer of clients for a commission. The idea of commission is customer-focused because your involvement will not bring about price increases that are made in order to accommodate your top up. Its also important to work with a business that is trustworthy and has respect. Once you make a successful referral the commission due to yourselves must be respected.

Through referral contracts you begin diversifying your portfolio and indeed giving heed to wisdom. But its also important to take a look at how some can become jerks of all trades master of none all in the name of Buffet’s saying, “ Don’t put your eggs in the same basket!”

Jerk of all trades master of none

I think this is all about doing unrelated things at the same time. The result is the opposite of risk mitigation because everything will go wrong if you don’t know what you are doing.The same Buffet who said “Don’t put your eggs in the same basket” also said never invest in what you do not know. Indeed there is a difference between taking calculated risk and carelessness, a free fall and falling on a parachute!