Priceline.com puts major effort into cross-selling
Priceline.com Inc., the Norwalk, CT-based company that’s made direct marketing innovation its stock in trade, has a timeworn problem most other marketers do: It worries about retaining its customers. So the company is developing automated marketing programs to cross-sell products through e-mail and Web site space advertising.
Priceline has become a household name by encouraging consumers to visit (www. priceline.com) and name what price they’ll pay for a range of products and services: airline tickets, hotel reservations, telephone service, car purchases, and groceries. This year, Priceline is projected to pull in $1.4 billion in revenue. It reported $352 million in second-quarter revenue.
How does the cross-sell work? The Web site generates orders for thousands of local retailers and large national companies, such as Delta Airlines and Hertz Corp., and shares revenues from the sales. Requests for orders generated by Priceline electronically are forwarded to these marketing partners who pick and choose which ones to accept and fulfill, while Priceline uses the information gathered from consumers to pitch other offers in 11 product categories.
Using a database containing the profiles, clickstream, transactional and promotional histories of about 6.8 million registered Web site customers, the company can target in excess of 100 promotions per second with relevant offers, all triggered by online shopping behavior.
“You can more efficiently interact with customers if all your promotions are based on the customer’s history,” says Ron Rose, chief information officer at Priceline. “You have a much better chance of pleasing a customer rather than distracting a customer if you use a centralized database.”
The transactional and other data from households and individuals is analyzed and scored to identify potential cross-selling opportunities.
For example, when someone buys an airline ticket through Priceline, a box pops up on the Web site offering information about car rentals or hotel reservations.
“Someone who takes European trips may be introduced to offers for telephone cards,” Rose notes. “And we know if someone is going to take a trip to San Diego, he may want a rental car.”
Pop-up boxes The automated pop-up boxes occur in about 15 different places throughout the Web site. The same consumer-buying data is also used for targeting e-mail offers.
The data-management, targeting and campaigns are handled by Priceline in-house with software by Boston-based Prime Response Inc. The marketer helped develop the software by participating in beta tests.
The software helps the company to create the relevant automated cross-selling campaigns targeting customer segments based on the recency, frequency and monetary value of past purchases.
Priceline can also follow up with customers who didn’t complete their transactions. “We can track the individuals who visit the site and bail out midway, and present them with another offer,” says Paul LaVallee, president of the Americas at Prime Response.
Meanwhile, analysis of household data is under way to better understand who typically becomes a frequent Web site visitor and why.
Most Web site traffic for Priceline is generated with radio and television advertising. Now, “Priceline is spending millions [not only] to attract consumers to the Web site, make an offer and get an offer accepted, [but to also] project a relevant cross-sell,” says Joel Book, director of enterprise marketing strategy at Prime Response.
“It’s important to watch how the Web is performing and understand within the offers how different treatments are working,” Book says. “Priceline told us they don’t want to become just another dot-com company attracting people to a site and letting them fall through the cracks.”
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