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