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Interview Patty

173 - 5 Ways to Increase Your Cross-Selling

The proliferation of customer data and the greater computing power to organize and analyze that data make it feasible to create much more dynamic and insightful profiles of customers.

Take a balance-sheet view.

Many businesses organize around product lines and focus on achieving quarterly, monthly, or even weekly targets. Although this centers the organization on achieving in-year goals, it hinders efforts to maximize the long-term value of customer relationships. Effective cross-selling organizations, such as American Express, complement the P&L perspective with a longer-term, balance-sheet view of the business and a multiyear view of customer value.

Create dynamic, high-resolution customer profiles.

With the exponential growth in data and the increased computing power available, companies can now combine internal and external data that spans several years to build more-useful customer profiles. Knowing how the customer’s product usage has changed over time, how he or she has migrated among products, and which triggers or leading indicators caused changes in behavior is essential for designing effective share-of-wallet strategies.

Focus on discrete customer growth missions.

When companies set customer growth goals, they too often pursue overly broad or diffuse objectives, such as “Let’s sell home insurance to all high-value auto insurance customers,” rather than identifying and focusing on the pockets of greatest opportunity.Defining a high-value customer growth mission, by contrast, narrows the aperture to focus on the organization. An example of such a discrete customer mission might be: “Let’s target our high-value customers who are in the market for home insurance and are customers of competitor X, which has low loyalty scores.”

Defining customer missions takes work.

Companies must understand the most profitable customer segments, how their behaviors and preferences have changed over time, the products and channels they use, and how they stack up against the competition in each area. And they must calculate the real economic value of these segments, so that they can create targeted strategies that will be profitable.

Just get started.

It’s a common misconception that a company must invest in new data warehouses or CRM systems before taking action. In fact, organizations can mobilize quickly around internal data that resides in existing databases, assemble external market data in a few weeks, and often use analytical tools that exist in-house. MGM Resorts was looking to raise booking rates among existing customers at its casino and resort properties in Las Vegas. Using existing customer data, MGM launched a multivariate campaign, testing different offer packages (a room discount versus a coupon to play slot machines), travel windows, brand messages, email frequency, and more. For one set of target customers, the best combination of variables achieved a 180% lift in bookings over the control offer and was worth millions in incremental revenue when extrapolated to the full set of customers.

Build a repeatable model.

The test-and-learn approach allows a company to log some early wins, build new capabilities, and iron out the kinks as the organization learns how to work to a different rhythm. Leaders can then decide if it makes sense to create a new team dedicated to share-of-wallet growth and possibly to invest in building new capabilities or installing new technologies.

Conditions are right for companies to reinvigorate their cross-selling strategies.

Now it’s up to managers to harness the wealth of customer data, advanced analytic techniques, and the power of digital channels for customer growth missions. Companies that outperform in these missions will be able to systematically expand their share of spending among loyal customers.

Source: hbr

All the best!

Patty Block

Building Blocks

7941 Katy Fwy. #414
Houston, TX 77024 USA

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