Customer acquisition is incredibly important to any growing business, but often companies overlook the value of cross-selling to their own customers. The likelihood of a new prospect buying from you is 5-20% while your current customers have a 60-70% likelihood. With current customers, you have already done the hard work of winning them over. They know your brand, have experienced your product, and will be far more willing to try a new product or service. The best way to identify which customers you should target is a cross-sell data model.
WHAT IS A CROSS-SELL MODEL?
A Cross-sell data model analyzes who your top customers are and then identifies other customers who look just like them or have the potential to become top customers. A cross-sell campaign will have a smaller pool of prospects, but your response rate and return on investment will be much higher than a brand-new customer acquisition campaign.
It’s important to note you need both types of campaigns in your marketing strategy. Over time, you will lose customers for various reasons, so acquisition allows you to find new customers while cross-sell helps you grow your current customers.
CROSS-SELL MODEL BENEFITS
While you could target all of your current customers with a cross-sell campaign, not everyone will be a good fit for the offer. A cross-sell model allows you to pinpoint which customers are most likely to buy other products from you. The goal of this data analysis is to help you grow your customers and make them more profitable. As you continue to introduce them to other products and services, you can increase their brand loyalty.
CROSS-SELL CUSTOMIZATION
At AMP, our models are specifically built for you and your needs. This means we can create custom variables to identify which customers have the greatest potential for growth. We can also incorporate client attrition data into the model to identify which customers are most likely to leave. When you know who is at the greatest risk, you can create marketing campaigns that encourage them to stay or address their concerns.
Our latest customization feature is identifying which product a customer is most likely to purchase next (Next Most Likely Product). We can either look at the products you are wanting to promote and score and rank them for each customer, or we can take your entire list of products and identify which products you should offer to each customer next. This allows you to create highly customized campaigns and have the greatest chance of success.
Building Customer Retention
If you want to be more strategic about growing your business, don’t forget to enhance your current customer relationships. By introducing them to new products and services, you are showing them your capabilities, offering them solutions to their needs or wants, and building brand loyalty. Remember existing customers are easier to sell to and more likely to spend more per purchase than new customers.
If you want to learn more about how a cross-sell model could enhance your business growth and help with customer retention, let’s connect.