Cross-sell / up-sell programs are a key tactic for growing revenue from existing customers. But companies first need to determine the fastest route to revenue by channel, identify which customers to target, when to target them, and the best products to cross-sell or up-sell. This is where the analysis gets tricky.
You often have so much data about customers that it is difficult to cut through the clutter and get a complete picture. In addition, the specialized marketing and sales analysis skills needed for such analysis make it difficult to find the kernels of insight residing in the data.
Business Intelligence (or, BI) applications provide you with a clearer picture of your customers’ buying behavior and help you understand which customers offer the greatest potential for cross-selling and up-selling your products. The applications do so by providing answers to questions like these:
Who are my most profitable customers? As the economy continues to change, marketing and sales executives must now reprioritize geographic markets and customer segments instead of focusing on markets and segments that were historically profitable. As a result, it’s prudent to take a very granular approach to geographies and segments, to pinpoint areas for growth and replace broad-based strategies with highly targeted ones.
When do customers buy? Review historical buying patterns like customers who bought from you last year but did not buy this year. If you are more aware of when customers are likely to buy, you can ensure that sales and marketing campaigns target them in the time leading up to this.
What is my customer retention rate? Examine your customer churn data and consider reaching out to customers that have recently left you. Perhaps they felt neglected in terms of service and account management but were otherwise happy with your products. Or perhaps their new supplier isn’t as good as they promised.
What’s my customer’s Propensity to Buy (PTB)? Determine those customers who are most likely to purchase new products or more existing products based on the recency of their purchases, frequency of their orders and the value of their purchases.
Business intelligence solutions can also provide insight into the relationship between products, customers and channels. For example, what products should we sell as a bundle? What products influence the sale of other products?
And to tie it all together, business analytics can provide the insight needed by sales managers to evaluate the performance of cross-sell, up-sell, and retention programs. For example, which sales and marketing campaigns were effective? What key factors may lead a customer from momentary dissatisfaction to defection to a competitor? Have revenue and sales pipeline grown?
On the flipside of that, BI systems can also shed light on what some may call the “dark side” of cross-selling. In a Harvard Business Review article on the topic, research by the authors found that one in five cross-buying customers is actually unprofitable because they tend to overuse customer service and return more of the cross-sold products they purchased. Business intelligence systems can identify these “bad apples” early on in the cross-selling cycle – providing the first step toward neutralizing their impact on profitability.
Net – net. With access to customer performance information coming out of a BI system, your Sales teams won’t have to struggle to identify potential opportunities. Marketing won’t need to rely on best guesses about which customers to target with relevant offers. And the customer-centric analytics offered by a BI system will give your CSRs the information they need to increase customer sat and subsequently prevent customer churn.
Categorised in: Intelligent Analytics
This post was written by Pat Hennel