Paired for Impact
Market Basket Analysis reveals which of your products and services are pairing up most often, helping you build long-term relationships and boost short-term results.

It may seem like a no-brainer: Some products and services just go together. Take shoes — they go with socks, knee-highs and tube socks. But what about belts, handbags, accessories ... or even children’s shoes?

The products and services cozying up together in customer transactions may surprise you. And pairings both surprising and not can be fertile ground for stronger bottom-line results in your strategic initiatives.

Market Basket Analysis (MBA) is designed to identify these relationships. It’s a data tool CCG is putting to work at companies including Payless ShoeSource and Proflowers.com to generate immediate results as well as more profitable customer relationships.

Peering into the basket
“In a Market Basket Analysis, we’re looking for the products and services most likely to have a purchase affinity,” says Lane Ware, CCG Senior VP of Strategic Consulting. “So if Jane actually had a shopping basket, what products and services would she most likely put in that basket during the year?”

Is your money market account 1.5 times more likely than average to be opened in connection with a new mortgage, but 4.3 times more likely to be opened by someone who has a home equity loan? Is children’s outerwear 2.7 times more likely to be purchased with women’s outerwear — but 5.2 times more likely to go in the “basket” with sporting equipment? MBA will pinpoint these most-probable correlations.

Quantifying behavior
Being able to quantify a behavioral tendency this way is intriguing — and actionable. It’s knowledge your team can sink its teeth into for immediate response-rate lifts. By pinpointing your strongest product/service correlations, you gain a meaningful way to determine which items to promote to which customers.

Meanwhile, the messages you’re sending Jane get more relevant, more interesting and more personal to her, moving you one step closer to Jane’s loyalty.

“We keep hearing from consumers today, over and over again,” says Ware, “that they want to be loyal, but they don’t want to work for it. They want companies to focus on their needs. MBA helps you do that without asking the customer to do a thing.”

Moving past acquaintance
“Many businesses may have a lot of information about their customers, but they don’t know them,” says Sallie Burnett, CCG’s VP/National Sales – Retail. “Especially with loyalty programs, they know how much a customer spends, their frequency and their redemption of rewards. But what are their preferences? How do I change their behavior and not just reward what I was already getting?”

MBA helps you gain insight into customer behavior — data you can leverage to customize their experience based on their needs, and to grow lifetime value and profitability.

“It’s a stair step in the CRM process,” adds Burnett. “While you want to focus most of your resources on best customers, MBA gives you the ability to change behavior within different segments, moving them up the profitability chain.”

Implementing beyond DM
Lifting response rates is an obvious benefit of tools such as Market Basket Analysis. But MBA can be leveraged in other marketing functions as well. Consider the potential for advertising creative, direct mail targeting, event marketing, and co-op partnerships. It’s knowledge that can empower every division of your company.

“Take merchandising, for instance,” says Burnett. “If the index for pairing kids’ sneakers and sports equipment is exceptionally high, redesigning your layout to display these products together in a high-traffic area would be a smart tactic.” And in purchasing, buyers can better manage inventory and leverage volume discounts with manufacturers who offer multiple product lines.

Depending on your POS system, MBA information can even be leveraged right at the cash register. For example, sales associates can offer customers a discount on an affinity product or inform them of a relevant sales promotion. Combined with an upsell or cross-sell employee incentive contest, this tactic can help your marketing efforts hit closer to home with customers as well as with associates.

Taking a leap forward
Market Basket Analysis is just one data analysis tool. But for companies grappling with the many questions and initiatives that go into becoming customer-centric, MBA can amount to one giant leap for marketing kind.