Extending Upselling and Cross-Selling Efforts (2,414 words)
Cross-Selling After the Fact
Upselling during a call is a customer service function, whether managed with high-tech tools, such as a real-time database, or low-tech means, such as a buyer's expertise. Cross-selling after the call is a database function.
For example, Lillian Vernon segments its lists extensively to mail specialized versions of its catalogs to the right customers: the kids' catalog to a parent and the kitchen catalog to an avid cook. Instead of renting prospect lists, cross-selling this way allows companies to fully leverage their customer files to identify potential affinities between catalog or product lines.
Upselling and cross-selling products are core components of marketing programs for financial and telecommunications sectors as well. Not only does cross-selling benefit the bottom line, but it actually boosts retention rates for churn-prone industries. According to RightPoint's Faulkner, customers who buy many services from a company almost never churn.
American Century Investments, a financial company that markets more than 60 mutual funds, uses cross-selling to promote additional services to existing customers. The Kansas City, MO, company creates models using demographics combined with its knowledge of clients' risk tolerance and financial goals.
Explains Stephen Cole, American Century Investments' director of research and development, "We're not interested in anything more than how you respond to financial needs. Are you the kind of person who likes to take control? Do you like to share control? Do you want to give away control to someone else you trust? It gives us a very robust sense of customer knowledge."
To apply that knowledge, American Century uses Clementine 5.1 software from SPSS Inc. of Chicago.
Says Cole, "We're very proactive in our cross-sell. If you own fund X, through the Clementine model, neural net and our own product affinity study, we can identify that you're the kind of person who would own fund Y."