CRM Solutions Can Help Cross-Sell and Upsell

Although customer relationship management (CRM), has been a buzzword for the past few years, catalogers have applied it to telemarketing on a sophisticated level only in the past year.

The reason for the delay is not because catalogers lack desire to incorporate cutting-edge technology, but rather that CRM solutions can be expensive and tricky to implement effectively, say experts.

But careful CRM system selection and adequate staff training can, among other benefits, help boost the cross-sell and upsell rates of your catalog’s customer service reps (CSRs).

Goal: Customer Retention

Kathryn Jackson of Response Design, a call center consulting firm, says cold calls and statement stuffers just won’t attract a large enough response from among today’s savvy consumers. “The way companies can add value,” says Jackson, “is through understanding the individual customer in a holistic way and developing strategies of how to help [customers] achieve their objectives.”

Jackson says cross-selling should be used to build loyalty. Indeed, one of the main objectives for cross-selling and upselling is to build customer retention. For example, officials from many financial institutions say that by cross-selling more services to customers, they can retain customers for a longer period of time. First Union, for example, even cross-sells via its automatic teller machines.

For catalogers, an innovative use might be using CRM software to offer cross-sell messages to customers who’ve been placed on hold. To be sure, many customers are amenable to a targeted pitch for new products or services after they’ve placed their orders or had their concerns (e.g., billing questions, order tracking) satisfactorily addressed, says Jackson. CRM software can help catalogers tailor product pitches for callers while they wait on hold. “The goal is to turn call centers into profit centers,” notes Jackson.

Is CRM Software Right for You?

Most of the new CRM systems enable cross-sell and upsell both online and on the phone. CRM software identifies, for example, a customer’s phone number and matches it with demographic data on the customer’s age, gender and marital status.

With some solutions, products are linked with others and appear on the CSR’s screen when their partners are selected. This method resembles a catalog, because the coordinating products typically are those that would be shown together on catalog pages.

Using this type of system requires catalogers to first gather and analyze marketing data, and then to write codes that link certain products. Most companies don’t do this for a wide enough range of products, experts lament. But when only a few products are offered, the pattern may become obvious to customers after a while, and response rates may drop accordingly.

Other systems offer products dynamically, that is, products are presented based on customers’ sales metrics or on products’ popularity. Thus offers are made because the system “knows” that customers who bought Product A also bought Products X, Y and Z.

Doug Way, principal of Kurt Salmon Associates, a global management consulting firm, says the best CRM systems also offer upsell, a strategy used by telemarketers for years. These systems require hard coding; they take a product and offer an upgrade. For example, with the right data at her disposal, a CSR might say: “I see you’ve ordered the Super Tennis Racquet; we happen to have the Ultra Tennis Racquet on sale this week. For just $50 more, you can have a racquet with these added features ...”

CRM Checklist

n Before you step up to the buying stage, be sure your company culture is compatible with the prospective CRM system. The reason some catalogers don’t have sophisticated CRM systems is because their call-center workforces aren’t quite ready for them. Either their CSRs’ skill-sets aren’t developed enough to handle the systems or the catalogers have such high turnover they can’t get reps adequately trained quickly enough to use the systems effectively. Indeed, CRM systems, especially the online/call center ones, require an investment in staff training.

•Define how the system will be used and who will use it. Some systems can be used for online cross-sell and upsell, but Way points out, they aren’t always effective in the call center. New CSRs typically will have better success with scripts rather than systems that offer products visually, while experienced CSRs may build better customer rapport using a visual system than they can with scripts that force them to conform.

•Jackson cautions that you need buy-in from all departments in your enterprise. The greatest hurdle is not the technology, she says, but how it changes your company’s culture. CRM requires customer-centric thinking and tearing down the information silos so departments can contribute data and resources to produce a single customer-focused entity.

“Interdepartmental integration is a huge issue,” she says, adding, however, that it doesn’t work for every one. “Many say that the strategy is not currently working and that successful cross-selling is still a distant goal. Many are asking why it’s so difficult. If it makes so much sense, why is it so tough to execute?”

Research shows that making the sale still depends primarily on the chemistry between the salesperson and the customer, and not necessarily on features or benefits, Jackson continues. This holds true for cross-selling and with in-house sales teams.

Says Jackson, “Technology is important, but research still shows that the real secret to cross-selling is to develop the relationship between the people who do business together.” Melissa Sepos is the former managing editor of Catalog Success magazine. You can reach her via e-mail: msepos@napco.com.

Tips for Selecting a CRM solution

Once you’re ready to buy a customer relationship management (CRM) system to help with cross-sell and upsell efforts, you have myriad selection options.

Many companies are concerned about their legacy systems. Catalogers, especially those with older retail or catalog management systems, find it hard to incorporate their data into these new solutions and to integrate all of the systems together.

“The main problem is that old computer systems store customer data in different places,” says Kathryn Jackson of Response Design, a call center consulting firm. “And in most big companies the data often are controlled by different departments, such as marketing and finance. The departments rarely make it a priority to redesign their databases to make the call centers work smoothly.”

For others, the deciding factor is the proposed CRM system’s capability. Most solutions lack the depth of functionality to replace catalog management systems. So catalogers must find ones that can run alongside their existing systems, says Doug Way, principal of Kurt Salmon Associates, a global management consulting firm.

Most solutions have a lot of overlap, and none are an exact fit. Your decision should be based on your budget and the functions you need the system to perform.

Following are some more tips:

1. Investigate what functionality is offered by your existing catalog mail order system package. Perhaps you already have some of the functionality you seek, but you aren’t using it because of your reps’ skill levels or their current workflow procedures.

2. Some CRM systems may accommodate cross-sell better for sporting goods and fashion merchants, while many were designed specifically for apparel retailers. Make sure the system you’re considering matches your catalog’s specific needs.

3. Calculate how a new system may affect customer call length compared to your existing system. Is the trade-off worth it? Most of the time, it makes sense to try to add on a sale. For another 20 to 40 seconds of calling time per call, it’s likely to be worth the effort.

4. If you want to focus on what the customer is buying rather than cross-sell/upsell call center systems, take a look at CRM analytics products.

5. When software vendors visit your site for demonstrations, be sure you control the mouse. Look for a system that’s intuitive and easy for call center reps to quickly understand and master.

—M.S.