Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Just like at Discovery-Store.com where Greif is responsible for the cross-sells and upsells for the site’s 2,000 products, Timberland uses manual selection for cross-sells. Six months ago, Timberland began transferring employees who have worked in the stores to the e-commerce operation to choose cross-sells for the web site. “A lot of people will spend money on clickstream analysis to let a machine tell them what people will buy,” Diaz says. “We hire people who have worked in stores.”
The EC operation looks for someone who’s observant and notices additional products that customers pick up with each purchase, Diaz says. “We start with the knowledge that cross-selling is not Internet specific,” Diaz says. “We get people who have seen real live, breathing customers in the store thinking about what to cross-sell. The Internet is a different medium but it’s the same business.”
Most sites aren’t using automated cross-sell and upsell programs because they just can’t afford them, Bather says. Further, retailers just trust their merchandisers’ instincts more than they trust technology. “Choosing cross-sells is more art than science,” Diaz says. “That’s how you have to start.”
In spite of the art component of cross-selling and upselling, retailers do set some rules for their cross-sells. Levenger Inc., for instance, a retailer of reading- and writing-related products, has certain guidelines for cross-sells: Cross-sell items must not be more expensive than the main item, they must complement the main item, they must be in stock, there are usually three, no more no less, and none of the cross-sell items can be sale items, says Lynnette Montgomery, Internet marketing manager. In addition, she adds, “We always try to get products that are performing. We figure if the cross-sell product is doing well, it might help out the main product.”
In addition, some retailers do back up their instinct with analysis. Timberland, for instance, uses web analytics software from Omniture Inc. to run item affinity reports as well as reports on previous-page and next-page navigation so it knows where customers come from and where they go. “It becomes a second way to check on the cross-sell decisions,” Diaz says. Levenger will install an analytics program in January, Montgomery says. “We really want to know statistically that the wallet goes with the purse,” she says.
The marriage of live chat and cross-selling
There is one area of cross-sells where retailers can see immediate feedback and that is the additional sales that take place after the initial sale has closed. Those sales usually involve products other than a retailer’s core product. A staple of direct marketing for years-many consumers are familiar with the cross-sell material that comes with delivery packages from online or catalog orders or that are in the monthly pitches from book or record clubs-such cross-sells gain an added level of interaction on the web.
BonusAmerica.com, which operates five web sites, offers post-order cross-sells powered by inQ Inc., a company that employs live chat to sell consumers coupon books, discounts packages and other items that are add-ons for retail sites. Once a customer has completed a transaction, a live chat window appears on the web page and the customer receives a message telling her that there is a live person behind the chat window with a special offer and instructing her to type “Hi” or “Hello” if she’s interested in the offer. InQ operates the chat sessions and pays a commission to BonusAmerica.
BonusAmerica’s customers have responded strongly to the offers, with 46% of customers who make a purchase at BonusAmerica.com engaging in the live chat cross-sell sessions and 51% at sister site NationalRewardCenter.com, says Amy Shoaff, media director of BonusAmerica.com. BonusAmerica had tried to do cross-selling itself, but found the process too cumbersome, she says. “It’s fabulous,” Shoaff says. “We sell an extra 19% with no overhead on our side.”
InQ characterizes its approach as a soft-sell. The customer doesn’t have to engage in the chat and can bail out at any time. Further, inQ reps do not ask for credit card or mailing information from the customer; it obtains that from BonusAmerica if the customer buys. Reps are allowed only one rebuttal per turn-down, says Steve Nober, president of inQ. Surprisingly, 30% of sales take place after the one rebuttal. “That’s the power of live interaction,” he says.