Towards capturing ancillary revenue via unbundling and cross-selling
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Cross-selling is a popular approach—in B2B and B2C alike—to increase revenues without affecting customer acquisition costs. In this paper, we review existing approaches such as Amazon’s methodology, and introduce our approach to cross-selling. We describe the differences between B2B and B2C implementations and discuss the need for business rules to achieve better recommendations. We illustrate our findings with industry solutions and discuss extensions to the airline case, made possible by the recent “unbundling” strategies developed by airlines worldwide. We conclude with our expectations of future airline applications and specifically the concept of individualized offer optimization.
KeywordsCross-sell Pricing Revenue management Airlines
None of this work would have been possible without the tremendous help and support of our colleagues at PROS, and in particular the help of Abinav Rameesh, Sushil Joshi, and Akhil Dhargave. All three spent countless hours figuring out the best way to implement and test this cross-sell algorithm, and provided valuable feedback and suggestions to improve the algorithm.
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