Cross Selling is the process of predicting what a customer will purchase based on previous purchasing history. If a customer has bought product "A" then he will probably buy product "B". (And it might as well be from you)

Cross Selling utilizes the knowledge of your existing customer base to create additional sales of products and/or services. By analyzing the groups of products risk or services that are commonly purchased together and each customer's affinity towards different products, you can maximize your selling potential.

When you use this product purchase data from your customer database, and combining it with other variables like, demographic, lifestyle and psychotropic data, you can identify the products that are most likely to be of interest to each customer. In reverse, for each product or product group, you can generate a ranked list of the customers that are most likely to be attracted to that product. Then, Instead of mailing to or calling every customer in your database, you select only the ones with a high likelihood of responding positively.

Cross Selling is very similar to response modeling, except that you are targeting only existing customers, not new prospects, and you are creating a model that predicts a customer's affinity level to multiple products. Cross Selling is one of the Important areas in database marketing where predictive data mining techniques can be successfully applied.

Targeted marketing campaigns can then follow two different courses:
To promote a specific product, by contacting only those customers that are most likely to purchase that product based on their prior purchases and demographics, etc.
To create specialized mailings customized for each customer, and mailing only the top ranked products that the model has identified as the products to which the customer is most likely to be attracted.


The benefits of cross sell modelling are widely recognized as the following:
Maximize up-sell opportunities
Generate more sales while spending the same amount, or fewer, marketing dollars.
Improved Return-On-Investment (ROI*) for marketing dollars.
Improved inventory control and supply-side management.
Improved customer relationships and retention.
Savings on communication costs (mailing, printing costs, telephone calls, etc.)