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Cross Selling Opportunities In Banking Industry


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Spring 2006
Koç University Marketing 452 CRM Customer Relationship Management
Final Project

Published in: Business, Economy & Finance
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Cross Selling Opportunities In Banking Industry

  1. 1. Cross Selling Opportunities In Banking Industry Fortis Bank Elif Hande Gürsoy Hande Arpalıgil Özge Şahlanan Seher Sinem Aşkın Tutku Rüya Özmen MKTG 452 Customer Relationship Management Dr. Lerzan Aksoy
  2. 2. CRM <ul><li>Trend: Being customer focused </li></ul><ul><li>Originated from CRM: Customer Relationship Management </li></ul><ul><ul><li>This management approach includes </li></ul></ul><ul><ul><ul><li>the people, </li></ul></ul></ul><ul><ul><ul><li>process and </li></ul></ul></ul><ul><ul><ul><li>technology </li></ul></ul></ul><ul><li>CRM </li></ul><ul><ul><li>adopting a strategy based on </li></ul></ul><ul><ul><ul><li>what the customers tells and </li></ul></ul></ul><ul><ul><ul><li>what else is known about that customer. </li></ul></ul></ul><ul><ul><li>associated with </li></ul></ul><ul><ul><ul><li>marketing, </li></ul></ul></ul><ul><ul><ul><li>sales & </li></ul></ul></ul><ul><ul><ul><li>services. </li></ul></ul></ul>
  3. 3. Cross Selling <ul><li>What? to identify customers who will buy a specific product with high probability when offered as a result of observed purchase behavior </li></ul><ul><li>Why? the opportunity of cross selling is one of the tools that makes CRM a profitable management strategy . </li></ul><ul><li>How? gather as much as USEFUL information about the customer </li></ul>
  4. 4. Opportunity of Banking Industry Source:Impact of Industry and Degree of Interaction Lerzan Aksoy
  5. 5. Purpose of the study <ul><li>To examine a cross selling opportunity for banking industry with the knowledge about the customer that banks posses via credit cards. </li></ul><ul><ul><li>age, </li></ul></ul><ul><ul><li>name, </li></ul></ul><ul><ul><li>location, </li></ul></ul><ul><ul><li>marital status, </li></ul></ul><ul><ul><li>number of children, </li></ul></ul><ul><ul><li>income, </li></ul></ul><ul><ul><li>monthly spent money, </li></ul></ul><ul><ul><li>purchasing behavior, </li></ul></ul><ul><ul><li>shopped stores, </li></ul></ul><ul><ul><li>bought items, </li></ul></ul><ul><ul><li>eaten places, </li></ul></ul><ul><ul><li>desired foods, etc.. </li></ul></ul>
  6. 6. Company Analysis: Fortis General <ul><li>Fortis: solid, strong, resolute </li></ul><ul><li>20 th largest financial institution in Europe </li></ul><ul><ul><li>39 billion Euro market capitalization </li></ul></ul><ul><li>Develop its banking activities by buying banks </li></ul><ul><ul><li>In 2005 bought Dışbank’s 93.3% of shares </li></ul></ul><ul><li>Fortis groups value had reached in 2005 31,4 billion Euro and 56 thousand of employee </li></ul><ul><li>Fortis aims to be a leading financial institution in Europe </li></ul>
  7. 7. Company Analysis: Fortis CRM <ul><li>The CRM project in Fortis Türkiye, mainly, focuses on two main objectives </li></ul><ul><ul><li>To align with retail concepts such as </li></ul></ul><ul><ul><ul><li>Better and faster service to customer </li></ul></ul></ul><ul><ul><ul><li>View the customer as a whole with his products and personal information </li></ul></ul></ul><ul><ul><ul><li>Customer of the bank not only a branch </li></ul></ul></ul><ul><ul><li>To simplify operational efforts/processes and minimize operational costs </li></ul></ul><ul><ul><ul><li>Convert inbound channels into profit generator </li></ul></ul></ul><ul><ul><ul><li>Create single version of the truth for Fortis Türkiye </li></ul></ul></ul>
  8. 8. Company Analysis: Fortis CRM 2 <ul><li>CRM Road Map </li></ul><ul><ul><li>was developed by considering </li></ul></ul><ul><ul><ul><li>the main objectives and </li></ul></ul></ul><ul><ul><ul><li>the needs </li></ul></ul></ul><ul><ul><ul><li>of different departments </li></ul></ul></ul><ul><ul><li>After the alignment between the departments the sub-projects of the road map were defined </li></ul></ul>
  9. 9. Competitor Analysis <ul><li>Competitors are analyzed in terms of </li></ul><ul><ul><li>Cross-sell </li></ul></ul><ul><ul><li>Up-sell </li></ul></ul><ul><ul><li>CRM applications </li></ul></ul><ul><li>Direct competitors of Fortis </li></ul><ul><ul><li>Garanti </li></ul></ul><ul><ul><li>Yapı Kredi </li></ul></ul><ul><ul><li>Akbank </li></ul></ul><ul><ul><li>HSBC </li></ul></ul>
  10. 10. <ul><li>Creates new sales opportunities by cross-selling to existing customers </li></ul><ul><ul><li>telemarketing (Alo Garanti Telephone Banking) </li></ul></ul><ul><ul><li>to customers acquired through salary payments </li></ul></ul><ul><li>Efficient use of CRM and data mining. </li></ul><ul><li>Observation of buying behaviors. </li></ul><ul><li>Won CRM Oscar </li></ul><ul><li>(Customer-centric Technology Use / Most Advantageous Customer Program): Garanti Payment Systems / Bonus Plus-Premium </li></ul>Competitor Analysis
  11. 11. <ul><li>Telephone banking (response rate:12%) </li></ul><ul><li>Integrated, multi-channel CRM strategy </li></ul><ul><li>Interacts with customers via </li></ul><ul><ul><li>direct mail, </li></ul></ul><ul><ul><li>e-mail, </li></ul></ul><ul><ul><li>WAP, </li></ul></ul><ul><ul><li>web sites, and </li></ul></ul><ul><ul><li>digital television. </li></ul></ul><ul><li>Increased profitability and effectiveness. </li></ul><ul><li>Used SAS’ Enterprise Miner software. </li></ul>Competitor Analysis
  12. 12. <ul><li>CRM with Axess: </li></ul><ul><li>Aim to prepare campaigns that are suitable to the </li></ul><ul><ul><li>needs, </li></ul></ul><ul><ul><li>lifestyles, and </li></ul></ul><ul><ul><li>desires </li></ul></ul><ul><ul><li>of customers. </li></ul></ul><ul><li>By analyzing the profile of the customers who use Axess, Akbank </li></ul>Competitor Analysis
  13. 13. <ul><li>First started at marketing department in </li></ul><ul><li>Later, the applications spread through the whole organization. </li></ul><ul><ul><li>thanks to the senior management </li></ul></ul><ul><li>Trained and rewarded the employees for a more customer-centric approach </li></ul><ul><li>Via call centers </li></ul>Competitor Analysis
  14. 14. Industry Analysis Number of Banks Operating in Turkey Between 1980-2005
  15. 15. Industry Analysis 6.308 47 6.247 47 6.106 48 Total 19 13 19 13 18 13 Investment Banks 415 13 393 13 209 13 Foreign Banks 1 1 1 1 1 1 Savings Deposit Insurance Fund 3.836 17 3.799 17 3,729 18 Private owned 2.037 3 2.035 3 2.149 3 State owned 6.289 34 6.228 34 6.088 35 Savings Bank Branches Banks Branches Banks Branches Banks March 2006 December 2005 December 2004
  16. 16. Industry Analysis Branch and Personnel Growth between the fourth quarter 2002 to fourth quarter of 2005
  17. 17. Data Collection: Survey Preparation <ul><li>In the preparation stage of the survey, we figured out questions to grasp the specific shopping habits of consumers. </li></ul><ul><li>Questions were aimed to find correlation between certain goods. </li></ul><ul><li>The result of the survey will guide us to apply which products to cross-sell. </li></ul>
  18. 18. Data Collection: Participants <ul><li>WHO? </li></ul><ul><ul><li>students of 4 universities </li></ul></ul><ul><ul><li>between the ages of 18-25 </li></ul></ul><ul><ul><li>using credit cards while shopping. </li></ul></ul><ul><li>WHY? </li></ul><ul><ul><li>Future’s ‘valuable customers’ </li></ul></ul><ul><ul><ul><li>This group has high purchase rate at this age </li></ul></ul></ul><ul><ul><ul><li>They are expected to have high incomes in the future </li></ul></ul></ul><ul><ul><ul><li>So, high spending rates. </li></ul></ul></ul><ul><ul><li>High CLV: they will be a bank’s customer on average 45 years </li></ul></ul><ul><ul><ul><li>They are 18-25 yrs old </li></ul></ul></ul><ul><ul><ul><li>They will probably live until they are 70 </li></ul></ul></ul>
  19. 19. <ul><li>Universities </li></ul><ul><ul><li>Yeditepe University, </li></ul></ul><ul><ul><li>Bilgi University, </li></ul></ul><ul><ul><li>ITU and </li></ul></ul><ul><ul><li>Koç University. </li></ul></ul><ul><li>Students from </li></ul><ul><ul><li>Different grades </li></ul></ul><ul><ul><li>Different majors </li></ul></ul>Data Collection: Sample
  20. 20. <ul><li>Primary data is collected </li></ul><ul><ul><li>Via e-mail and one to one </li></ul></ul><ul><ul><li>2 weeks </li></ul></ul><ul><li>Survey questionnaire is designed as measuring instrument </li></ul><ul><li>A sample of 60 university students are surveyed </li></ul><ul><li>Data is analyzed by SPSS </li></ul><ul><li>Frequency analysis, findings are presented by tables and charts. </li></ul>Data Collection: Methodology
  21. 21. Results:
  22. 22. Results:
  23. 23. Results :
  24. 24. Results :
  25. 25. Results :
  26. 26. Results:
  27. 27. Results: Promotional coupon has the highest ranking
  28. 28. Promotional coupon has the highest ranking Results :
  29. 29. Promotional coupon has the highest ranking Results :
  31. 31. Results :
  32. 32. Results <ul><li>Average amount spend for GSM expenditure is 85 YTL </li></ul><ul><li>With a standard deviation of 73 YTL </li></ul><ul><li>About 76 % of them are paying at most 100 YTL of their cellular phone spending by their credit card </li></ul><ul><li>65 % of cardholders have fixed line cellular phone </li></ul><ul><li>35 % of cardholders have advance payment cards </li></ul>
  33. 33. Managerial Implications: Details <ul><li>The firm should be able to learn details of purchased goods or services like </li></ul><ul><ul><li>Type </li></ul></ul><ul><ul><li>Color </li></ul></ul><ul><ul><li>Size etc.. </li></ul></ul><ul><li>For that Fortis should coordinate with all of shopping places that Visa / Mastercard is accepted. </li></ul>
  34. 34. <ul><li>Turkcell / Telsim / Avea </li></ul><ul><ul><li>Know the place of the customer </li></ul></ul><ul><ul><li>Send just right promotion campaign announcements </li></ul></ul><ul><ul><li>ATTENTION! Privacy! </li></ul></ul><ul><li>Gima / Migros / Carrefour... </li></ul><ul><ul><li>For details of purchased items. </li></ul></ul>Managerial Implications: Strong cooperatives
  35. 35. Questions?
  36. 36. Thanks.. Cross Selling Opportunities In Banking Industry Fortis Bank Elif Hande Gürsoy Hande Arpalıgil Özge Şahlanan Seher Sinem Aşkın Tutku Rüya Özmen