Cross Selling Opportunities In Banking Industry

Fortis BankElif Hande Gürsoy

Hande Arpalıgil

Özge Şahlanan

Seher Sinem Aşkın

Tutku Rüya Özmen

MKTG 452

Customer Relationship Management

Dr. Lerzan Aksoy

CRM

• Trend: Being customer focused• Originated from CRM:Customer

Relationship Management

– This management approach includes

• the people, • process and • technology

• CRM • adopting a strategy based on

• what the customers tells and • what else is known about that customer.

• associated with • marketing, • sales & • services.

Cross Selling

• What? to identify customers who will buy a specific product with high probability when offered as a result of observed purchase behavior

• Why? the opportunity of cross selling is one of the tools that makes CRM a profitable management strategy.

• How? gather as much as USEFUL information about the customer

Opportunity of Banking Industry

Source:Impact of Industry and Degree of Interaction

Lerzan Aksoy

Purpose of the study• To examine a cross selling opportunity for

banking industry with the knowledge about the customer that banks posses via credit cards.

– age, – name, – location, – marital status, – number of children, – income,

– monthly spent money, – purchasing behavior, – shopped stores, – bought items, – eaten places, – desired foods, etc..

Company Analysis: FortisGeneral• Fortis: solid, strong, resolute• 20th largest financial institution in Europe

– 39 billion Euro market capitalization

• Develop its banking activities by buying banks – In 2005 bought Dışbank’s 93.3% of shares

• Fortis groups value had reached in 2005 31,4 billion Euro and 56 thousand of employee

• Fortis aims to be a leading financial institution in Europe

Company Analysis: FortisCRM

• The CRM project in Fortis Türkiye, mainly, focuses on two main objectives– To align with retail concepts such as

• Better and faster service to customer• View the customer as a whole with his products and

personal information• Customer of the bank not only a branch

– To simplify operational efforts/processes and minimize operational costs

• Convert inbound channels into profit generator • Create single version of the truth for Fortis Türkiye

Company Analysis: FortisCRM 2

• CRM Road Map– was developed by considering

• the main objectives and • the needs

of different departments– After the alignment between the

departments the sub-projects of the road map were defined

Competitor Analysis

• Competitors are analyzed in terms of– Cross-sell– Up-sell– CRM applications

• Direct competitors of Fortis– Garanti– Yapı Kredi– Akbank– HSBC

• Creates new sales opportunities by cross-selling to existing customers– telemarketing (Alo Garanti Telephone Banking)– to customers acquired through salary payments

• Efficient use of CRM and data mining.• Observation of buying behaviors.• Won CRM Oscar

(Customer-centric Technology Use / Most Advantageous Customer Program): Garanti Payment Systems / Bonus Plus-Premium

Competitor Analysis

• Telephone banking (response rate:12%)• Integrated, multi-channel CRM strategy• Interacts with customers via

– direct mail, – e-mail, – WAP, – web sites, and – digital television.

• Increased profitability and effectiveness.• Used SAS’ Enterprise Miner software.

Competitor Analysis

• CRM with Axess: • Aim to prepare campaigns that are

suitable to the – needs, – lifestyles, and – desires

of customers.• By analyzing the profile of the customers

who use Axess, Akbank

Competitor Analysis

• First started at marketing department in • Later, the applications spread through the

whole organization.– thanks to the senior management

• Trained and rewarded the employees for a more customer-centric approach

• Via call centers

Competitor Analysis

Industry AnalysisNumber of Banks Operating in Turkey

Between 1980-2005

http://www.tbb.org.tr/turkce/abf/19052006/EBF%20Turkish%20economy%20and%20anking%20sector%200506.pdf

December 2004 December 2005 March 2006

Banks Branches Banks Branches Banks Branches

Savings Bank 35 6.088 34 6.228 34 6.289

State owned 3 2.149 3 2.035 3 2.037

Private owned 18 3,729 17 3.799 17 3.836

Savings Deposit Insurance Fund

1 1 1 1 1 1

Foreign Banks 13 209 13 393 13 415

Investment Banks 13 18 13 19 13 19

Total 48 6.106 47 6.247 47 6.308

http://www.tbb.org.tr/net/donemsel/

Industry Analysis

5.600

5.700

5.800

5.900

6.000

6.100

6.200

6.300

6.400

2002/4 2003/2 2003/4 2004/2 2004/4 2005/2 2005/4

120.000

122.000

124.000

126.000

128.000

130.000

132.000

134.000

136.000

Şube Personel

Branch and Personnel Growth between the fourth quarter 2002 to fourth quarter of 2005

Industry Analysis

Data Collection: Survey Preparation

• In the preparation stage of the survey, we figured out questions to grasp the specific shopping habits of consumers.

• Questions were aimed to find correlation between certain goods.

• The result of the survey will guide us to apply which products to cross-sell.

Data Collection: Participants

• WHO?– students of 4 universities – between the ages of 18-25 – using credit cards while shopping.

• WHY?– Future’s ‘valuable customers’

• This group has high purchase rate at this age• They are expected to have high incomes in the future• So, high spending rates.

– High CLV: they will be a bank’s customer on average 45 years

• They are 18-25 yrs old• They will probably live until they are 70

• Universities– Yeditepe University, – Bilgi University, – ITU and – Koç University.

• Students from – Different grades– Different majors

Data Collection: Sample

• Primary data is collected – Via e-mail and one to one– 2 weeks

• Survey questionnaire is designed as measuring instrument

• A sample of 60 university students are surveyed

• Data is analyzed by SPSS• Frequency analysis, findings are presented

by tables and charts.

Data Collection: Methodology

Results:

monthly spent money

02468

10121416

LESSTHAN100

100 -200 200 -300 300 -400 400 -500 500-1000 MORETHAN1000

YYTL

number of person

Consumption percentage for dressing

16

18

14

12

0 5 10 15 20

LESS THAN25 %

25 % - 50 %

50 % -75 %

75 % -100 %

Dressing spending

SPORTCASUAL

FORMALCHIC

S1

0

10

20

30

40

50

Results:DRESSING PURCHASING TIME

0 10 20 30 40 50 60 70

HAFTA SONU

İNDİRİM GÜNLERİ

ÖĞLEDEN SONRA

SEZON BAŞI

ÖZEL GÜNLER

ÖĞLEN

GÜNDÜZ

HAFTA İÇİ

SEZON SONU

AY BAŞI

GECE

AY SONU

PERCENT

PREFERRED OFFERS WHILE PURCHASING SPORTS DRESSING

TICKETS58%

SOCKS2%

PROMOTION COUPONS

2%

HATS 20%

SPORTS DRESSING

7%

ADDITIONAL LOYALTY

POINTS

7%INSTALLMENTS4%

TICKETS

HATS

SPORTSDRESSING

ADDITIONALLOYALTY POINTS

INSTALLMENTS

PROMOTIONCOUPONS

SOCKS

Results:

PREFERRED OFFERS WHILE PURCHASING FORMAL CLOTHING

ADDITIONAL LOYALTY POINTS

6%

PROMOTION COUPONS

52%

ACCESSORY

12%

PRESENTS

12%

INSTALLMENT PAYMENT

6%

JEWELLERY

9%

SOCKS

3%

PROMOTIONCOUPONS ACCESSORY

PRESENTS

JEWELLERY

INSTALLMENTPAYMENT ADDITIONALLOYALTY POINTSSOCKS

Results:

0

10

20

30

40

50

PERCENT

0-50 50-100 100-200 200-300 300-500 500-1000

MONTHLY AMOUN IN YTL

CREDIT CARD SPENDING FOR FOOD

Results:

Results:TYPE OF FOOD CONSUMPTION

Packaged food24%

Fast food40%

Diet food14%

Natural food 22%

Fast food

Packaged food

Natural food

Diet food

Results:

0 5 10 15 20

PERCENT

PROMOTION COUPONS

PRESENTS

INSTALLMENT PAYMENT

TICKET

PREFERRED OFFER WHILE PURCHASING FAST FOOD

Promotional coupon has the highest ranking

0 2 4 6 8 10 12 14

PERCENT

PROMOTIONCOUPONS

INSTALLMENTPAYMENT

PRESENTS

FORMALDRESSING

NATURALPRODUCTS

PREFERRED OFFERS WHILE PURCHASING NATURAL FOOD

Promotional coupon has the highest ranking

Results:

0 2 4 6 8 10 12

PROMOTION COUPONS

INFORMATION

LIGHT PRODUCTS

ADDITIONAL LOYALTY POINTS

INSTALLMENT PAYMENT

PREFERRED OFFERS WHILE PURCHASING DIET FOOD

Promotional coupon has the highest ranking

Results:

0 2 4 6 8 10 12

PROMOTION COUPONS

PRESENTS

ADDITIONAL LOYALTY POINTS

INSTALLMENT PAYMENT

PACKAGED FOOD

PREFERRED OFFER WHILE PURCHASING PACKAGED FOOD

Results:

WHERE DO YOU EAT GENERALLYORDER PLACEMENT

5%

HOME

39%

SCHOOL

18%

OUTSIDE

38%

OUTSIDE

HOME

SCHOOL

ORDER PLACEMENT

Results:

Results• Average amount spend for GSM expenditure

is 85 YTL • With a standard deviation of 73 YTL• About 76 % of them are paying at most 100

YTL of their cellular phone spending by their credit card

• 65 % of cardholders have fixed line cellular phone

• 35 % of cardholders have advance payment cards

Managerial Implications: Details

• The firm should be able to learn details of purchased goods or services like– Type– Color– Size etc..

• For that Fortis should coordinate with all of shopping places that Visa / Mastercard is accepted.

• Turkcell / Telsim / Avea– Know the place of the customer– Send just right promotion campaign

announcements– ATTENTION! Privacy!

• Gima / Migros / Carrefour...– For details of purchased items.

Managerial Implications: Strong cooperatives

Questions?

Thanks..

Elif Hande Gürsoy

Hande Arpalıgil

Özge Şahlanan

Seher Sinem Aşkın

Tutku Rüya Özmen

Cross Selling Opportunities In Banking Industry

Fortis Bank