Cross-selling as a strategic differentiator for revenue growth within Nedbank retail (case study of KZN)

Abstract

Customer retention has been shown by academic researchers to be more profitable than

customer acquisition. However, its implementation in the business environment has not

been so successful. One of the reasons for this is that customer retention can be achieved in

several ways (e.g.. loyalty programs, affinity cards and switching costs)and that the

translation from the concept of “retaining customers” to the actions and strategies to retain

them is not always easy. One of the most attractive strategies to ensure that customers

remains within the organisation is through cross-selling and up-selling. In short, the

objective is to increase the number (or the value) of the products that a customer buys from

a company to make it more difficult for him/her to leave. Whilst academic research has

deeply investigated the concepts of loyalty, retention programs and trust, amongst others,

cross-selling has not received the same level of attention. Moreover, existing research on

cross-selling has been focused on products rather than on services. Finally, this research

has mostly been conceptual in nature, with limited attempts to model or design practical

cross-selling and up-selling strategies. In order for cross selling and up-selling to be

effective strategies, they need to be tailored to the needs of the customer. The offer must be

adequate in terms of the target (who is going to buy the product), the content (what is

going to be purchased) and a time (when is the right moment to offer the new product).

This thesis investigates cross-selling and up-selling from a practical point of view in

Nedbank It assesses the importance of the concepts of customer retention and cross-selling

and up-selling through several interviews conducted within Nedbank. Finally, this

research highlights, from an empirical analysis, how repurchase decision is highly

influenced by the length of the relationship with the provider and the type of products

already purchased. Understanding these factors is key to successfully retaining customers

via cross selling.