aureus-insights_logo

All Posts

Is Your Cross Sell Approach Working? If Not, You Should Read This.

Cross selling is a natural extension of trying to get a larger share of the customer's wallet.

After acquiring a new customer, the sales and account management teams put their entire effort into:

1. Ensuring that the customer spends more with them; and

2. The customer buys another product or a service from them.

Cross selling has a number of advantages for business. The primary being that it increases the customer profitability over the life cycle and discourages attrition.

Take for example an insurance company. Let’s say you have a home insurance policy with them. As a cross sell tactic, the insurer will try to sell you a car insurance policy. If that doesn’t work, they will try to sell you a pet insurance policy, or traveller's insurance, or gadget insurance, or… you get the drift.

They will try to keep selling to you until either 1) you give in and buy something just to get them off your back; or 2) you start ignoring them. Either way, it’s not the best approach to try to get a larger share of the customer's wallet, which was the original goal.

The ‘blanket’ selling approach to cross sell may have worked earlier when there were a limited set of products to choose from and customers were comparatively lesser aware about their insurance needs. However, this ‘sell everything to everyone’ approach to cross sell may not work as effectively now.

To make an effective cross sell strategy, the following needs to be considered:

  1. Customer life stage mapping: Simply stated, this means to know and understand at what phase of their life a customer is in. Are they married or single? Do they have any children? How long have they been working, etc… If you don’t know where a customer is in their life, how would you sell them the product that best suits their needs?
  2. Use ALL data: Yes! Use all data at your disposal. Did you take into account the customer's transactions and interactions from the time they first became your customer? Did you consider their product portfolio? What about the household? Are there any gaps that should be fulfilled there?
  3. Leverage Analytics: Analytics help in connecting the dots. By understanding a customer's historical buying behavior, life stage etc…, analytics makes it possible to predict which other product the customer is most likely to buy. The advantage of this approach is multi fold:

It brings in operational efficiencies to the cross sell process. Instead of throwing the whole product catalog at the customer and hoping something will stick, you can now positions just 1 or 2 products which have the greatest probability of success. This will save time and money.

Targeted cross selling improves the customer's overall experience. It delights the customer to know that the brand cares enough to understand their requirements or needs at each stage of their life.

Click here to read about how we helped a large insurer improve their cross sell process

Cross selling is essential for the growth of business. However, a poorly designed cross sell approach will most definitely alienate your customers and make them wary of sharing any information with you.

 

Related Posts

6 Factors to Consider Before Building a Predictive Model for Life Insurance

If a life insurer wants to build a predictive model, how should they go about it?  In this article, we explore the factors that need to be considered before beginning actual model development. We will do this by using the example of predictive models for improving persistency. (Improving persistency for a life insurer means increasing the volume of business they retain.)

How Event-Driven Processes are Used to Measure Customer Experience

Companies design application processes to provide the best possible experience for their customers. These processes rely on application and customer-originated events to function. These events and their outcome form the basis of the customer’s experience. Therefore, event-driven philosophy is an ideal way for companies to measure customer experience.

Top 5 Ways AI Will Impact the Insurance Industry in 2019

I recently saw a tweet from Mat Velloso - “If it is written in Python, it’s probably machine learning. If it is written in PowerPoint, it’s probably AI.” This quote is probably the most accurate summarization of what has happened in AI over the past couple of years. A few months back, The Economist shared the chart below that shows the number of CEOs who mentioned AI in their Earnings calls. Towards the end of 2017, even Vladimir Putin said: “The nation that leads in AI ‘will be the ruler of the world.” Beyond all this hype, there is a lot of real technology that is being built. So how is 2019 going to look for all of us in the insurance world?