Acquiring a solid customer base represents a big step towards developing a sustainable and successful business. If you’re not careful, this can give you a false sense of security that results in complacency. From developing a management structure to boosting your marketing campaigns, there are many issues that need to be tackled as your business grows.
With these challenges at hand, it is easy to forget about the customers that allowed your company to grow in the first place. Your most reliable customers are the backbone of your success and need to be cared for. However, with a larger customer pool, it becomes an overwhelming task to accomplish. This is where Dunn Solutions' machine learning services become essential to managing and growing a loyal consumer base.
Existing customers are the most valuable to any company, which is why you need to be careful when marketing to them. Many marketing campaigns will attempt to cross-sell to their consumers to create more value, but this can be a double-edged sword. Cross-selling can not only give a business more value from their customers, but may also convert them into advocates to draw even more people to your business. This is the side of the sword that cuts for you. On the other hand, if not done precisely, cross-selling will appear as an annoying and desperate attempt to get an extra dollar from them. Customers will lose trust in your business resulting in lower customer satisfaction and higher churn rates. This side cuts you!
Data mining and machine learning is the best way to ensure that cross-selling is effective for your company. Some methods will take your transactional dataset and will find groups of products that often get bought together, and will base their recommendations off of these results. These suggestions can be very helpful to customers, often reminding them of items they may have forgotten. For example, if you were buying burgers, hot dogs, and chips for a barbecue, wouldn’t it be great to be reminded about the buns you have forgotten. This is exactly how these algorithms work and will result in higher customer satisfaction along with increased revenue.
These same techniques can also help you discover more hidden relationships between the products you are offering. This might not be directly helpful for the customers, but definitely can benefit your business and how you promote and price your items. If you find two items like bread and chicken stock heavily associated, then you do not want to discount both products just like how you wouldn’t discount peanut butter and jelly at the same time. You would be discounting products that people were already going to buy, thus lowering your profit margins. Take a look at our blog, Am I losing money by discounting, to learn more about this.
As you can see, data analysis is crucial for any emerging business, but this introduction simply scratches the surface to all there is to consider. Just for cross-selling, you have to be able to determine if you want a product-based or consumer-based method and the aggregate level of your data, whether that is sku, item, or category. On top of this, you will want to consider techniques like customer segmentation and promotional pricing to apply before you cross-sell. Lots of things to consider and you will find that having Dunn Solutions work with you to get through it will make for a very successful adventure. Contact us today!