Cross selling rules define the interdependency of products and services. If product A plus B plus C are chosen, the Customer Relationship Management matrix then indicates to the sales person that products E and F are the most likely “add-on products” to this mix. Cross selling, upselling or even down selling only works when the matrix recognizes the key product mixes and also allows for some independent selling by the sales person. In other words, it’s not enough to “know” the customer they must understand the customer.
Is this what I really need..
There is a small upscale boutique that I frequent for items that would be considered 'health and beauty'. Their products are expensive. Why spend additional dollars for items that could be purchased at a third of the cost in a local grocery store? I do it because of their ability to know and understand my “needs.”
From the moment I enter the store, their attention is focused on me as a customer. In this era of self-serve merchandising and big box stores, it is a pleasure to be treated as a valued customer. I simply give my telephone number to the sales clerk and within seconds the Customer Relationship Management system has displayed a complete list of all my past purchases. The system then provides them with a list of potential add-on products to those purchases and complementary products.
Within moments, without my touching an item on the shelf, the sales clerk has lined up the last several items I purchased on the counter and inquires if I require a refill on any of these, "Ms.Morris, you purchased this on 22nd April this year, would you like another bottle of the same?"
By doing so, she knows I am far more likely to make a purchase or at least share my feedback, which she will update on the CRM software.
The next step is the recommendation of new or supplementary products. If I have purchased product Y in the past, would I like to try the counterpart to it – product X? Would I be interested in this new line of products which complement what I am currently using?
While the CRM system may drive this information, it would be of little use if the sales clerk does not have the freedom to take an initiative with the customer. Though, the information displayed by the CRM does give them confidence that they are not randomly offering a new product, the options suggested are on the basis of a simple logic using my purchase history and average budget. In many cases, when I have been reluctant to move to a new product or add a supplementary product on, the clerk has had the autonomy to offer a discount on the product or a sample size of the product.
The ability of the sales clerk to manage what the system tells them is what enables the successful cross selling of products. In some cases, it even encourages what is known as the “down sell” – suggesting a new product or less expensive brand to replace current purchases.
Optimal customer experience..
What makes this relationship so successful? It is not just the information which the system provides, but the ability of the sales force to use that information effectively.
By collecting my basic information at the on-set of my purchase at the store, they have been able to track my purchase history, frequency of product purchase and types of product purchased. They make use of this to send e-blasts of new products or loyalty sales. This is not to be confused with a customer loyalty program – there is no points program, there are no “frequent buyer” discounts. What does happen is excellent customer service based on customer driven information.
So, back to the original question of why pay more than necessary? Simply stated, it is because they have managed the relationship effectively and efficiently and sometimes, it’s just nice to be managed.