Revenue management through dynamic cross selling in call centers

Abstract

This paper models the cross-selling problem of a call center as a dynamic service rate control problem. The question of when and to whom to cross sell is explored using this model. The analysis shows that, under the optimal policies, cross-selling targets may be a function of the operational system state. Sufficient conditions are established for the existence of preferred calls, i.e., calls that will always generate a cross-sell attempt. These provide guidelines in segment formation for marketing managers, and lead to a static heuristic policy. Numerical analysis establishes the value of different types of information, and different types of automation available for cross selling. Increased staffing for the same call volume is shown to have a positive and increasing return on revenue generation via cross selling, suggesting the need to staff for lower loads in call centers that aim to be revenue generators. The proposed heuristic leads to near optimal performance in a wide range of settings. 2010 Production and Operations Management Society.