CROSS SELLING Cross-selling stands for being able to offer to the existing bank customers, some additional banking products, with a view to expand banking business, reduce the per customer cost of operations and provide more satisfaction and value to the customer. For instance, when a bank is in a position to sell to a deposit customer (say saving bank or term deposit), a loan product such as housing loan, credit card, personal loan or vice-versa, this would result into additional business and lead to low per customer cost and higher per customer earning.
Revived focus : In the present day context, the cross selling has come into focus, as some of the new private banks (ICICI Bank) have been able to offer to their customer a variety of products and thus generate more business through cross selling. But for most of the public sector banks, in particular, the concept in its new form, is still at its evolutionary stage. Scope of cross selling : The crossing selling may take place on the liability side (i. e. different kinds of deposit accounts) or on the asset side (i. . loans for different requirements) or between the two. It could be either at the initiative of the customers or a bank can implement it as a well prepared strategy. Benefits from cross selling : The major benefit is in terms of cost reduction as for a bank, the cost of contracting a new customer is much higher than to serve an existing customer (may be up to 3-4 times). Further, through cross selling the benefits of economies are available to the bank, which reduce the cost further and increase the profits.
Another additional advantage is that the cross selling helps in building brand value if the loyalty of the customer could be ensured for the brand, as in that case the likelihood of shifting the business dealings to another organisation/bank by the customer, is much less. Strategies for cross selling: The existing client base of the banks could be used by them for the purpose of cross selling after carefully charting the profile of the customers.
For this purpose, the banks can undertake studies for various products and various geographical areas to understand the potential available for cross selling. The banks may undertake some of the following steps: • Collection of data and preparation of data base of the customers, because the entire exercise of cross selling is based on such data base of the customers. • Identification of customers and products that could be offered and then charting the strategy to offer he products. • Imparting proper training to the staff to create team spirit and sharing with them the strategy for undertaking cross selling. • Selecting target customers and narrowing down the product range, or even development of new products if necessary, to meet the specific needs of the group. • Effective delivery. The bankers have to remember that Cross-selling is not a transaction based activity, it is primarily, a relationship building exercise.
