This is a Marketing Revolution

Brannon is a star -- not just because she understands how to handle routine credit-card confusion, but because she is an unerring saleswoman as well. After all, why not try to sell a guy who is confused about coupons more coupons?

On a typical day, Brannon sells something to roughly 15% of the customers who are routed to her. Using an analysis of each customer's buying habits and demographics, her computer terminal automatically tells her which products to offer. Whether Brannon makes an offer on a particular call is up to her. With customers who are particularly upset or who are being transferred to another department, she doesn't. On this winter evening, though, she's scoring a sale with one out of every three callers. "I don't shove it down their throats," says Brannon. "I throw it out if it's something that I think they might like."

A woman from Miami, who has called to find out if she has to pay her $39 annual fee every year, cheerfully signs up to pay $59.95 a year for Privacy Guard, a service that helps you check your credit report. "That's called a sale!" says Brannon. "That's called fattening your paycheck. Give me more calls!"

Esther from Connecticut, who had called to check her current interest rate, signs up to pay $59.99 for Capital One Edge, a program in which you receive a catalog of discounted merchandise as often as 12 times a year.

Carolyn from Illinois, whose credit history has won her a Visa with a $200 limit and a $59 annual fee, calls to find out how to get a cash advance. After answering that question, Brannon warns Carolyn that her Visa has less than $100 of credit available. Then she offers Privacy Guard to Carolyn. The cost: $59.95. "If you want to get your credit report, this is the way to do it," Brannon says. "This is what you need." (Actually, if your Visa has a $200 limit and a $59 annual fee, you don't really need a credit report.) Says Carolyn: "Yes, I would like to try that."

No one at Capital One can recall whose idea it was to sell things to customers when they call the company, rather than the other way around. Most credit-card companies, including Capital One, have long tried to "cross-sell" their customers -- often by using inserts in monthly statements to tout everything from calculators to cruises.

The idea to add a new twist came, naturally, through data analysis. "It happened three or four years ago," says Nigel Morris. "We were doing outbound telemarketing, calling at dinner time, and we looked at the statistics on who bought things, who told us to get lost, and who bought things that they never used. We thought, 'This isn't working that well. What if we talk to people when they call us?' "

For Morris, a transplanted Brit who vibrates with energy and who has a mischievously contrarian streak, it seemed like a natural: "Gosh, if you call me and I'm trying to sell you something, then I'm going to treat you very nicely. That's going to promote better service. But people said, 'Service people are not salespeople. The systems don't exist to do this -- to service people and sell them at the same time. And anyway, even if you could do it,' they said, 'you would never sell enough to make the longer phone calls worthwhile.' People said it couldn't be done. That's all the motivation we needed."

In the case of inbound cross-selling, the first test product was easy and sweet. New customers must call an automated line to activate their card. "We thought, 'That's the perfect time to sell them something,' " says Jory Berson, who is in charge of cross-sell opportunities at Capital One. "The first thing we sold was a balance transfer: 'Now that you've got our card, is there any debt that you want to transfer to us?' " While customers waited on the line for a computer to verify and activate their card, they could sign up to move balances from other cards onto their new account.

Customers loved it. Or, at least, they bought it.

The response was so enthusiastic, relative to Cap One's effort, that Berson began looking for other products that Capital One could sell in this way. "I don't have a big desire to sell you groceries, because once I have to ship stuff, I can't save you any money," he says. "But auto insurance -- I can sell that cheaper. Mortgages, long-distance service, auto loans, cellular service -- same thing."

Berson sat down with his partners -- Eric Nelson, 30, Cap One's IT director, and Marge Connelly, 37, who runs all of the company's call centers. At their first meeting, in the wake of the balance-transfer experiment, "the brainstorming was less about 'Is this a good idea?' than about 'How do we do it as quickly as possible?' We weren't trying to pretend that this is rocket science," says Berson.

Indeed, the biggest hurdles were human. "At first blush," says Connelly, "folks look at the idea of selling to someone who's calling, and they say, 'There's a conflict between servicing and selling.' Some associates said, 'I don't feel good about making this offer to customers.' We were listening, trying to appreciate that feeling."