I don’t know about you, but as a customer I’m increasingly noticing that just about every company I deal with is trying to “cross-sell” or “up-sell” to me. They are either trying to make me buy something else from them, or they are trying to get me to buy more of the product or service I am already buying from them. This is a popular strategy, and it’s easy to see why: Existing customers are already familiar with the brand and the ‘cost of acquisition’ is likely to be much lower.
In this article, I’m going to argue that cross-selling without insight is akin to a scattergun approach that can be improved. This has a wide ranging impact on the processes and systems that organisations implement – irrespective of whether the organisation is multinational, small or mid-size. And for business analysts, it may have an impact on the data and process requirements for our projects.
Let’s start with a trip to the post office…
This might all sound rather abstract, so I’ll start with an example. Last week, I went to my local Post Office to send a package by Special Delivery. I was sending some documents to a client, and I needed them to arrive the next day without fail. I took a ticket, waited for a counter-clerk to become available, and then completed the transaction. As I was about to leave, the counter clerk asked me:
“Do you have any outstanding balances on your credit cards?”
I was rather phased by this – “Excuse me?” I replied. I was confused.
“Do you have any balances on your credit cards? We’re offering a new Post Office credit card with great rates on balance transfers.”
Now I understood. The clerk was trying to cross-sell to me. The Post Office presumably offer “white labelled” financial services products that are underwritten by other providers. Clever! I explained that I wasn’t interested, the deal wasn’t for me, but still he continued.
“Ah, well even if you don’t have outstanding balances, there’s a fantastic rate on purchases too…”
I politely drew the conversation to a close and walked out. I was extremely curious as to why the counter clerk had chosen to cross-sell that particular product? Of all the products that he could have offered me, he chose a credit card.
Then it struck me: The counter clerk had no insight into my behaviour as a customer. There is no data of my previous purchases – if there was, he’d have seen that I only visit a post office occasionally, and generally only to send parcels. A better product to cross-sell, given I’m a business customer, would have been a franking machine or courier services. In fact, if he’d have asked me, I’d have told him that my company generally uses a different courier for most businesses materials as they are cheaper and offer a more convenient booking and collection service… perhaps he could then have sold me on the benefits of using the post office instead.
So, with no data, at best this counter clerk was guessing the most appropriate product to cross-sell. And since I was working from home on this particular day, dressed in rather unflattering jeans and a sweater that I think I’ve owned since the early 2000s (it’s comfortable!), he had perhaps made some incorrect assumptions about me. Or perhaps he was targeted to sell credit-cards, so was asking everyone on the basis that someone will eventually say yes… the traditional ‘scattergun approach’
Yet the scattergun approach feels very old-school. In my experience customers often like to buy but they don’t like being sold to. There’s a fundamental difference. Inform a customer of a relevant, useful offer tailored for them – and you’re helping them to make a purchasing decision. Bombard every customer that comes to your counter with a mass-market proposition and you’re just interrupting their day.
But what does this mean for data, process & business analysis?
So how do organisations get to a position where they can cross-sell and up-sell more appropriately?
Organisations need to place the customer at the centre of what they do. This starts with every process, every system and every interaction. When designing processes, organisations need to consider the customer value that will be delivered. When defining IT systems to support their processes and staff, they need to ensure that the right information and data is available to the user at the right time. Front-line workers need to have as much information about the customer standing in front of them as they can. After all, there’s nothing more frustrating than calling a call-centre to chase something, only to find that there’s no record of a previous conversation that you’ve had… This means there are important process, data and functional requirements that need to be considered, and they are the sort of requirements that are often missed or closed over. All of these things need a robust business analysis approach.
This customer-centricity can be taken to the next level by avoiding traditional ‘scattergun’ approaches to cross-sell and up-sell. I’m tired of telling my bank I don’t need a different type of savings account, a loan or an extended overdraft. Why should I need to tell them that more than once? Organisations need to make sure they have the processes and systems to capture the raw data that indicates how the customer is acting and behaving (e.g. “Wow, he’s just withdrawn a large amount of money, I wonder if he’s buying a car. Maybe he needs a loan?) but also need to implement operational guidance that enables the raw data to be read in a wider context (“Ah, but I also see that he came into us to transfer some money to a wedding venue, and he’s added his wife as a joint account holder. Maybe now isn’t the best time to bother him…) This brings individual insight.
In summary: Scattergun cross-sell should be history. Customers are individuals, and smart organisations ensure that their systems, processes and people enable customers to buy from them without feeling the need to forcibly sell.
I hope you’ve found this blog post interesting. I’d love to hear from you, so please keep the conversation going add a comment below. And if you like my blog, please subscribe.
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions