Cross-Selling Cross
in a Call
Center
a Heterogeneous
Selling
in Call with
Centers
Customer
Population
Mor Armony
∗
†
ItayBased
Gurvich
Morwith
Armony
Maglaras‡
on joint work
Itay Gurvich Constantinos
and Costis Maglaras
August 29, 2006
SeminarAbstract
Abstract
Cross-selling is becoming an increasingly prevalent practice in call centers, due, in part, to
its unique capability to allow firms to dynamically segment their callers and customize their
Cross selling is an increasingly prevalent practice in call centers. This is largely because it allows firms to
product offerings
This paper
considers
a call
center with
cross-selling
capability
dynamically
segmentaccordingly.
callers and customize
product
offerings
accordingly.
In this
work we develop
a
framework
under
which
both
marketing
decisions
(such
as:
customer
segmentation
and
pricing)
and and
that serves a pool of customers that are differentiated in terms of their revenue potential
operational decisions (such as: staffing, call sequencing and dynamic cross selling) may be considered
delay sensitivity.
studies thepricing,
operational
decisions
of staffing,
call routing,
and
cross-selling
jointly.
We propose It
near-optimal
staffing,
sequencing
and cross-selling
policies
under
various
forms of customer segmentation. Finally, we characterize how the degree and timing of customer
under various forms of customer segmentation. It derives near-optimal controls in each of the
segmentation impacts these policies and, correspondingly, the center’s profitability.
settings analyzed, and characterizes the impact of a more refined customer segmentation on the
structure of these policies and the center’s profitability.
1
Introduction
Many organizations consider their call centers as one of the most important channels of interaction
with their customers, acting both as a service center and a point of sales – an opportunity for the firm
to generate extra revenue by offering new or existing products to their customers. The significant
revenue potential of this cross-selling strategy is underscored by the nature of the interaction that
takes place in a call center and the wealth of information that is available through state-of-the-art
Customer Relationship Management (CRM) systems; Together, they enable firms to segment their
customer pools effectively and to tailor their product offerings to each such segment to increase
the likelihood of purchase and the associated expected revenue. A familiar and successful example
∗
Columbia Business School, 4I Uris Hall, 3022 Broadway, NY, NY 10027. (ig2126@columbia.edu)
Stern School of Business, NYU, 44 West 4th Street, NY, NY 10012. (marmony@stern.nyu.edu)
‡
Columbia Business School, 409 Uris Hall, 3022 Broadway, NY, NY 10027. (c.maglaras@gsb.columbia.edu)
†
1