Great post from the guys at Tibco (BY AMITAVA KUNDU)
In 2012, on the two biggest shopping days of the year, Black Friday and Cyber Monday,sales grew by 26% and 20% from the previous year. Don’t believe the apocalyptic news hype, retail is not dying, not even close. Retail is evolving to giving the customer exactly what they want, when they want, and how they want it. If customers don’t want to go to your store, they shouldn’t have to. If they want to shop on their phone or tablet, you need to fully support that.
This is exactly what sellers are struggling to do – make all customer touch points equally accessible, with a completely shared experience, so customers can be engaged at the moment of their purchasing decision.
Time is a Luxury, Methods are Not
Sellers have always tried to maximize customer spending through upselling and cross-selling. Methods which were successful in the past need to be replaced with newer techniques for today’s more aware, less patient customers.
Shopping on the internet is the best example. The probability of customers checking out the offers they receive via email is lower than when they see those offers in real time on the screen when they are shopping online.
Cross-Selling at the Right Time
Online merchants use upsell techniques like providing an option to replace the customer’s selection with a higher priced and better valued item in the basket. At the check-out, the customer will see cross-sell offers with discounts and messages like “people who bought this also bought something else.” According to industry experts, cross-selling to an existing customer only costs 10% of what it would cost to acquire a new one. That cost is further reduced and much likelier to succeed if the cross-sell activity is at the moment of purchasing decision.
What is as Important as When
How you know what to cross-sell to your customer at the point of sale? Providing the same bucket of offers to all your customers will get you a very low response rate. Rent-A-Center, Inc.offers goods under flexible rental-purchase agreements that generally result in ownership of the merchandise by the customer at the conclusion of the rental period. This replaced “after-the-fact” marketing with a real-time dynamic selling vision at the store level by incorporating a 360-degree view of its customers. RAC aggregated real-time data from various touch points of customer interaction and combined the new data with historical information on customer preferences and behavior to create a comprehensive understanding of their customers. This approach enabled Rent-A-Center to provide need based upsell or cross-sell offers to every single customer across the 3,000 plus stores.
“We know who our customers are. What we lacked was insight into the products they prefer, the patterns of their rental behaviors, the peculiarities of their demographics, and the changes in their lives that would drive future rentals. The more we know about the customer, the better we’ll be at offering the right products at the right place at the right time, and that should translate into rental agreements with longer life.”
– Senior director of Data Management for Rent-A-Center
A successful cross-seller ensures that the enterprise’s critical information on customers and products not only remains consistent and current, but can also be applied in real time across locations, lines of business, and interaction touch points.
For more information, here is a webinar on “How Operational Excellence Drives Supply Demand Chain Effectiveness.”
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