Tame the Cross sell elephant - Don't let it run amok!
In Indian folklore, feeding an elephant was deemed as a tough proposition where only the very wealthy could handle. One reason probably would have been that their returns didn't justify the amount spent on them. Some untamable ones run amok and caused loss to property - sometimes lives were lost too. Thankfully, it's a thing of the past. Now you would wonder what on earth cross-sell has to do with elephants!
Harvard business review points out that the primary pitfall in Cross-sell Management is that most Marketing managers do not track the profits earned and instead focus on campaign revenue aka CTR, CTB etc.They bucket these customers as Service demanders, Promotions maximizers, Spending limiters - shall I dare say the "Untamed" ones. Smart-sell rather than cross-sell is really the new paradigm for the Modern Marketer. It is essential to ensure that cross sell campaigns provide bang for every marketing dollar spent.
Enough of posers, let's begin the task of taming cross-sell by asking the following questions...Shall we?
Who am I targeting for the cross-sell and how do I identify the customer group?
What kind of relevant products can I offer?
How do I get my timing right?
Ah..You are probably thinking that I've stated the most obvious and oft-repeated marketing mantra - "Reach the right customers with the right products at the right time", well there's no escaping that, it's so true!
Here's how one could approach in solving the problem:
1) Understand your customers - Build customer personas by tracking their footprints across their browsing patterns, purchasing patterns including their purchase latency, brand affiliation and levels of marketing engagement and service feedback to name a few. Building personas based on customer behavior will help in segmenting them based on their specific needs and help create significant consumer segments that can be targeted dynamically.
2) Create the customer-product affinity matrix - Doing an effective market basket analysis to identify frequently bought products can be accomplished relatively painlessly by tracking past purchase transactions. The goal here is to identify from the transactions if a presence of one (or more of) of product(s) reveal patterns of other products being bought irrespective of them belonging to the same category or otherwise. These are typically expressed as rules:
If Buys (Men Trousers and beer) → he/she buys Women shoes
The prudent step here would be to identify those segments of customers who have bought "Men trousers and beer" and their propensity to buy "Women shoes".
3) Get your timing right - The icing on the cake would really be the case to optimize the right time to communicate so that you have the highest chance of the customer clicking through. There are a multitude of methods to achieve this – direct personalization through Individual Send time Optimization, CED Aggregation by Demographics, Education levels and even political affiliation. All and more is possible, if – "a big if" the data platform gets its act together in powerlifting your cross sells.
Putting it all Together:
Getting the persona and the association together can be of high value to cross sells especially if you get to the level of "Middle Aged Male Customers from NY Area" having purchased Trousers typically buy Shoes too. This can help build advanced cross sell rules that feed Marketing Platforms with the optimal strategy for the myriad personas in your customer base. A caveat however, please be careful in putting gender-specific rules here as it may be counter-productive as we could very well have "Laura" buying Trousers for her boyfriend "Paul" for his birthday.
Before I conclude, if you find that your cross-sell profitability is going southwards, continuously refine and prune the customer list to whom you are sending the cross-sell campaigns as there is always a customer lifetime value to contend with. So, what else you are waiting for - get onto the bandwagon and tame the cross-sell elephant!