Building a sophisticated market segmentation strategy for. Mar 01, 2002 this paper presents the findings from a study designed to investigate the use of interactive psychographics to develop cross selling strategies. Despite these important developments in the industry, there are a limited number of studies that focus on the bank activities related with cross. The keywords are cross selling, customer retention, banking, customer relationship. Kicking it up a notch taking retail bank crossselling to.
But one in five cross buying customers is unprofitableand together this group accounts for 70% of a companys customer loss. In todays competitive market, banks need to develop carefully planned, measured and specialized programs to engage and target customers effectively through cross selling. Crossselling financial services to small and medium enterprises via e banking portals. Cross selling opportunities in banking industry fortis bank elif hande gursoy hande arpal. Since hong kong is always regarded as the mirror of the future for china, the authors use hong kong as an example to illustrate the practices, strategies and challenges of cross selling in the banking industry. Helping standalone health insurance provider with cross sell opportunity for product variants cross selling is an important practice in the corporate world, which should be dealt very carefully without affecting consumer sentiments. While our approach has been developed with an eye to the financial service industry, with its abundant data bases, our approach would be useful also in other. The aim of cross selling is to increase revenue from the existing customer by selling different products of one company and at the same time maintaining. Cross selling gives an opportunity to sell an additional product or services. The present research is a conceptual paper on cross selling at the banking industry in india. In this sales managers guide to cross selling and upselling, we discuss two sales strategies that will help improve your profit margins and expand product range across your sales channel cross selling and upselling. In modern competitive times every industry juggles to expand their income potentials, the indian banking industry is also on the same ladder of growth and diversification.
Examples of cross selling, packaging and integrated solutions 3. It is consistent with a bank that has a high tolerance for risk since the bank has no experience in the market segment and is existing. Feb 10, 2014 cross selling, or persuading customers to purchase additional products, is one of a bank s most powerful and efficient revenueboosting tools. The aim of the study is to identify the relationship between trust. Need new ways to improve your banks cross selling strategy. Newdiversificationproduct this strategy is the riskiest new products for new markets. The right way involves building strong relationships with customers who see the true value in the other products the company offers those who genuinely feel that a companys products can help them thrive financially.
Cross selling a customer centric approach in indian banks. The figures below show how much longer, on average, a customer will stay with a bank, based on the number of products they hold with that bank. For example, banks not only sell core banking products saving ac, current ac, but also sell additional products such as credit cards, insurance products, mutual fund plans, govt securities. Policymakers addressed some of those practices, but executives in the banking industry forged ahead and found new ways to replace lost revenues namely the fees and penalties associated with cross selling multiple accounts and banking products.
Other research referring to crossselling in financial services is from the field of human. Research suggests that crossselling emails work best on standalone emails, while up selling is maximized in emails about existing transactions. Nov 28, 2016 less than a decade ago, abuses by big banks triggered the great recession. It is well known that the incremental cost of selling to current customers is generally much lower than to new customers. Consultative selling has been discussed the focus of the banking industry for. Crossselling to increase bank revenue digital signage can help banks cross sell new products to increase overall sales and deepen customer relationships.
Crossselling, switching costs and imperfect competition in. Finally, through an examination of the current us and eu regulatory debate on the use of cross selling in the banking and finance industry, the paper draws some conclusions as. Cross sell in banking industry icons slide ppt ideas show pdf. Professionally designed, visually stunning cross sell in banking industry icons slide ppt ideas show pdf. Finally, through an examination of the current us and eu regulatory debate on the use of cross selling in the banking and finance industry, the paper draws some conclusions as to the optimal framework to address the risks posed by these business practices. Banks aiming to be successful in todays rapidly evolving market need to flip their focus back to the customer, or risk being left behind. Dr kinnam lau dept of marketing, faculty of business administration, k. As is the case in other parts of financial services, regulation has placed added financial burdens. And while the lend and cross sell model has proven difficult to master for many banks, the role of the bank was clear and unquestioned. Sales culture and misconduct in the financial services. Therefore it has been found that there exists difference in the crossselling practices. Meeting this priority requires a deep understanding of what customers need, want, expect and value in a financial institution. Cross selling approaches in the banking industry in hong kong. Mar 30, 2020 refresh old cross sell practices think of cross selling as cultivating a relationship cross selling is so important to growing financial institutions.
Oct 31, 2017 thats why the relationship banking strategy is important and such an emerging trend for increasing cross selling in the banking industry today. Cross sell is the practice of selling or suggesting related or complementary products to a prospect or customer. Interactive psychographics is the process of identifying psychographicbased segments, profiling the segments, matching individuals to the resulting segments, and developing actionable relationship strategies that best match the psychological and. The declining net interest margins have forced the indian banks to look forward for alternative sources of income. Our previous article described how to design a successful relationship banking model transformation for regional banks, including the ingoing research, kpis, and benchmarking required. Every visit is an opportunity to build customer relationships and improve sales by cross. Stories of cross selling in hong kong today will soon be retold in china with its 1. The following section discusses the results of these analyses and the implications for banks. Your tellers are the front line of your crossselling strategy. If youre looking for organic growth, this strategy has definite advantages. Building a sophisticated market segmentation strategy for the.
For example, when a bank is in a position to sell to a deposit customer say saving bank or term deposit. Cross selling has become a strategic priority for many banks in recent years. How we can leverage crossselling in health insurance sector. The new art of crossselling in retail banking pega. Proceedings of 14th european conference on information systems. Using ai to crosssell in banking cross selling is a foundational source of revenue a pillar of the business model that banks cannot afford to lose. Kicking it up a notch taking retail bank crossselling to the next level 5 these segments were then analyzed on a number of dimensions. Presenting cross sell in banking industry solutions to overcome implementation challenges ppt styles graphics example pdf to provide visual cues and insights. How bank crossselling can help, hurt you what experts say consumers should know about the benefits and drawbacks banks and others engaged in cross selling. A database approach to cross selling in the banking. A number of respondents representing the banking industry noted in particular that the directives referring to cross selling in the banking sector namely, mcd, psd and pad do not contain provisions of a kind similar to article 2411 of mifid ii, which gives esma a clear and explicit empowerment to issue guidelines. Share and navigate important information on three stages that need your due attention. Introduction 2 consumer banking preferences and behaviors continue to change based on.
Cross sell in banking industry solutions to overcome. You can also test which days of the week and times of day result in the most successful signups. Crossselling in the financial industry has gotten a bad rap lately, and amid the bad press and increased financial regulation many companies are reevaluating their revenue generating efforts to avoid unethical and even illegal sales activity. One such strategy is mixed bundling that offers consumers a flexibility to purchase. Optimal customer selection for crossselling of financial services. Oct 04, 2017 potentially, banks can cross sell almost any product or service, be it on the liability side i. If you have a high penetration of savings accounts with flourishing families your gotomarket strategy, product lineup and packaging would seem to resonate well. Cross selling is one of the easiest and most effective methods of marketing. Crossselling means approaching the present customers of. The importance of crossselling in banking and insurance. Pdf a database approach to cross selling in the banking. Kicking it up a notch taking retail bank crossselling to the. When done right, it can benefit both businesses and consumers alike. These practices are different among private and public sector banks.
Dec 03, 2020 of course, this is a broader cross industry problem that banks can work with clients and data vendors to address. Harland clarkes financial industry data indicates that selling new products to an existing account holder costs just 10 to 15 percent of the cost of acquiring a new. While cross selling remains essential to a companys continued success, theres a right way and a wrong way to do it. Crossselling in the banking industry this paper presents the findings from a study designed to investigate the use of interactive psychographics to.
The paper aims to summarise the work undertaken to. Maximizing your financial institutions crossselling. Selecting prospects for crossselling financial products using. Upselling and cross selling are two standard techniques that if used effectively can make a big difference to your bottom line. A database approach to cross selling in the banking industry. Cpa doing a firms audit sells the customer tax planning services. Pdf customer relationship management crm is a growing trend in banks today and billions have already been spent on crm systems. Cross selling is based on personal relationship, which is built slowly with the customer.
Sanders talked about some of the challenges of cross selling at a recent convention of. Cross selling, customer satisfaction, introduction in the competitive world the retail banking industry formulates certain strategies to add more and more values to the customer so that customer retains with the bank. And the key to diversification is to offer array of different products to existing customers. Methodologythe main objective of the present study is to analyze and understand how and to what extent the different components of attitudes affect product cross selling in banking sector of sri lanka. Cross selling with special reference to state bank of india. Within banks, while the board and ceo set the tone and inspire action, the chief sustainability officer should be empowered to more forcefully influence culture and behaviors across the institution. It ranks as a top strategic priority for many industries, including financial services, insurance, health care, accounting, telecommuni cations. Balance sheet capacity and the ability to link clients to investors and products were the key sources of banks competitive advantage and. Dec 21, 2016 from cross to right selling customer expectations are rapidly changing, while digitalsavvy new entrants are disrupting the banking industry in this new era, banks need to consider a new sales paradigm to serve the financial wellbeing of their customers better and demonstrate their value as a trusted advisor banks do not have to. How we can leverage crossselling in health insurance.
Crossselling financial services to small and medium. Bank with customers checking account persuades them to refinance their home buy plants from a nursery and they then sell you decorative rock, a garden sculptures, etc. Crossselling the right product to the right customer at the right. H3 behavioral attitudes positively affect employee motivation to cross selling. How bank crossselling can help, hurt you what experts say consumers should know about the benefits and drawbacks banks and others engaged in cross selling may offer savings for customers who show. Cross selling in banks competition for bank customers makes branch visits more important than ever.
1257 1558 642 1563 952 1481 1533 756 553 221 366 1415 927 1010 1232 561 980 5 1200 772 793 359 745 315 1672 175 902 826 1271 919 527 458 767 951 868 59 692 969