Increase sales with cross-selling and up-selling

The hub of your business is probably the sales system. The sales system is a fantastic resource for understanding your customers. It contains the information you need to better understand purchasing behaviours: the who, when and what was purchased.

Customer understanding increases sales

A client was seeking ways to increase their average customer order value. Their catalogue business was doing very well, sales were good. However, their profitability needed improvement. Sale analysis revealed that most orders contained only one or two items. With a large product portfolio, there was potential to increase average basket size.

We delivered a marketing solution using market basket analysis to deliver results. The analysis revealed valuable cross-sell and up-sell opportunities:

• Highest volume and value product combinations
• Demographics of purchasers
• Product combinations with greatest potential

The business was able to capitalise on this new found understanding, increasing sales.

Market basket analysis identifies sales opportunities

Data within your sales system has the potential to identify customer purchasing habits. This data combined with market basket analysis techniques can identify:

• Which types of product and in what combinations they are purchased
• When they are purchased and in what sequence
• Who are the best customers for these products

Supermarkets store huge volumes of consumer sales, each basket tracked by individual loyalty card. They use this information for store management and to target you, the consumer. When making a purchase at a store you use a credit card, you don't provide your personal contact details. The loyalty card is their method for tracking consumers.

Businesses requiring purchaser contact details have good potential for market basket analysis. If your business is in this category, you could use this technique.

The results of market basket analysis can be used to support:

• Customer segmentation
• Product promotion and propositions
• Increased on-line sales via data-driven content
• Improved customer service by client focused propositions delivered by CRM

Considerations before implementation

Before undertaking market basket analysis there are a few things to consider:

• How are customers and products defined within your sales system?
• Is there potential for duplicate customers, does your sales system prevent this?
• What product level do you wish to perform the analysis: size, colour, category?
• Where will the analysis take place, what technology will be used?

To understand how to build a market basket analysis, view our free guide to market bask analysis.