Demographics On Cross Sell
Demographics On Cross Sell
Demographics On Cross Sell
2, 2018
Neha Gupta
Marketing Department,
K.J. Somaiya Institute of Management Studies and Research,
Vidyanagar, Vidyavihar,
Mumbai 400 077, India
Email: [email protected]
1 Introduction
Banks have played a very prominent role in the development of the country. Globally,
banks have undergone various reforms. Information technology (IT) has helped in
increasing the speed and efficiency of banking operations by facilitating the emergence of
innovative products and new delivery channels. The role of the Reserve Bank of India as
the driver of technology initiatives in the banking sector assumes greater importance
given the challenges posed by rapid advancements in technology. The Reserve Bank of
India has played an important role in implementation of information technology in public
sector banks (PSBs) by constituting several committees from time to time with different
objectives, headed by experts in different fields or academicians.
Competition among financial institutions is as tough as never. Customers are
knowledgeable and demanding. New products are developed, tested and launched on an
ongoing basis. Delivery channels have become more varied and complex. Faced with
such an array of challenges, banks are looking forward to modernise their business
operating models and implementing technology components to benefit fully for the next
period of growth.
Direct banking channels also known as electronic banking (eBanking) can be utilised
by banks for acquiring, tracking and serving customers through multiple channels. Even
though customers regard quality of service as the most important aspect of their banking
experience, they also value relevant, competitively priced and innovative products with
effective delivery channels. The challenge for banks, therefore, is to keep abreast of
developments in these two areas, namely competitively priced and innovative products.
Effective delivery is essential for each and every banking service.
Joseph et al. (1999) argued that the different technologies might influence customer’s
perception of service quality in different ways and called for a study on the determinants
of service quality based on the different technologies. eBanking services are not new for
the developed nation. However, it is new for developing countries like ours. Most of the
banking channels were made available in between 1985 and 1990 and some advanced
delivery channels like internet banking and mobile banking are available from 1997.
Today in India, most of the eBanking channels are ready to serve customers. But, many
of these eBanking channels are limited to urban areas only.
In India, cyber frauds have also increased in eBanking services in recent past. Hence,
IT Act has been passed in 2000 known as IT Act, 2000. This Act provides several legal
sections for electronic services. eBanking represents various banking delivery channels
such as automated teller machines (ATMs), tele-banking, internet banking, mobile
banking, SMS banking and self-service kiosk/branch lobby kiosk.
2 Literature review
banking have been tested as predictors of customer satisfaction. Al-Hawari and Ward
(2006) found that customer satisfaction has an important role in understanding financial
performance in a banking automated service context.
Devlin (1995) studied the issue of distribution of retail financial services and found
that with the emergence of more heterogeneous consumer preferences dealing with
delivery of eBanking services, the importance of distribution of the service offering has
increased at a more competitive pace. The technology now exists to allow a largely
cashless society with all the resulting implications for distribution of financial services.
It was apparent the threshold of acceptance for the banking market in terms of the
innovation, which was dynamic and perhaps the main strategic question within
distribution of banking services and financial services, in general, that how quickly the
threshold would approach the boundary of the possible, given continuing technological
advances.
Joseph and Stone (2003) and Ibrahim et al. (2006) categorised eBanking into internet
banking, telephone banking and ATMs and the introduction of these electronic delivery
channels in the banking industry has received wide academic and practitioner interest
(Joseph et al., 1999; Zeithaml et al., 2002; Lee and Lin, 2005; Ibrahim et al., 2006; Sayar
and Wolfe, 2007; Ganguli and Roy, 2010). Khanna and Gupta (2015) studied factors that
influence the customer’s perception to enhance marketing efficiency and add value to
customers for banking delivery channels of PSBs. They showed that the factors such as
technology acceptability, safety, availability, user-friendliness and accessibility influence
customer perception.
Reibstein (2002) researched electronic delivery channels as the key success factor for
low-cost strategy. Recently, quality dimensions have also emerged as a strategic issue,
which contribute to the success of eBanking channels (Loonam and O’Loughlin, 2008;
Khan, 2010; Chong et al., 2010; Carlson and O’Cass, 2011). In addition, other
researchers also argue that the identification and management of quality dimensions in
electronic channels could lead to competitive advantage and long-term business success
(Parasuraman et al., 2005; Loonam and O’Loughlin, 2008). Yadav et al. (2015) studied
consumer’s intention towards internet banking adoption in Indian context by combining
two theories; theory of planned behaviour and technology acceptance model by adding
construct, i.e., perceived risk. The author showed that perceived usefulness, attitude,
subjective norm and perceived behavioural control influence the consumer’s intention to
adopt internet banking. Also, perceived risk failed to show any significant influence over
intention to adopt internet banking.
Perceived ease of use indirectly affects a customer’s desire to use internet banking
(Alsajjan and Dennis, 2009; Eriksson et al., 2005; Shen and Chiou, 2009). Eriksson et al.
(2008) talked about innovation adoption among internet banking customers. Duration of
usage has also a positive effect on perceived ease of use (Prompattanapakdee, 2009).
After comparing the attitude of mobile banking users and non-users, Jeong and Yoon
(2013) found perceived usefulness as significant in both, whereas perceived ease of use is
significant for mobile users only. Bandyopadhyay (2015) revealed that out of the 15
service quality elements, two elements, i.e., internet banking and operating hours, are
considered as attractive. Seven out of 15 elements of service quality attributes such as
customer understanding, knowledge, the right service offered by bank, safety, service
timing, physical facilities provided and materials are identified as must-be quality
elements. The remaining six elements such as courteous, responsive, dependable, prompt
service, branch location and ATM network are one dimensional in nature.
Influence of demographic variables 129
banking acceptance in their paper and explained how sex, age and technology
competency influence the adoption of eBanking; in addition, they found age and
occupation as important factors to analyse the trend of adoption of IB.
Therefore, we treated demographic variables as major criteria for our research.
Here, we consider technological factors of eBanking adoption namely technological
perceived ease of use, perceived usefulness, availability, accessibility, awareness, etc.
Perceived ease of use is person-dependent and hence varies from one individual
to another; the higher the ease of usefulness, the better the chances of finding the
services useful.
3 Research methodology
Owing to the theory-building nature of the study (Calder et al., 1981), a non-probability,
convenience-sampling technique was used to select respondents of the study.
Furthermore, non-probability convenience sampling is also a common sampling method
adopted in prior consumer behaviour research in the retail-banking context (Chau and
Ngai, 2010). Data were collected from 692 respondents by way of convenience random
sampling. The collected data were analysed using cross-tabs, frequency and Chi-square
testing. This study was made on the primary data, which has provided significant analysis
and results for understanding the influence of customer demographic variables on
customer perception. Result shows that demographic variables influence customers’
perception about cross-selling and up-selling in eBanking.
The objectives and the hypotheses of the study were kept in mind to develop a
supportive research methodology. The cities represent metros, class A, Tier I and Tier II
cities of the country. Total 692 respondents’ data were analysed out of 715 questionnaires
that were circulated. The response rate was 97%, as rigorous fieldwork was conducted to
have first-hand information.
4 Data findings/analysis
and account information. 65.2% respondents are using delivery channels for bill
payments. Only 35.3% respondents are using delivery channels for buying household
stuff.
of age
Hb1: Information provided by banks 0.024 0.172 Reject
about product and services is dependent
of qualification
Hc1: Information provided by banks 0.056 0.148 Accept
about product and services is dependent
of current profession
Hd1: Information provided by banks 0.002 0.187 Reject
about product and services is dependent
of annual income
134 N. Gupta
Table 2 Perception about cross-selling and up-selling for demographic variables (continued)
age
Hb3: Bank displays information about 0.000 0.290 Reject
products and services is dependent of
qualification
Hc3: Bank displays information about 0.000 0.220 Reject
products and services is dependent of
current profession
Hd3: Bank displays information about 0.000 0.218 Reject
products and services is dependent of
annual income
Ha4: Bank provides information about 0.000 0.211 Reject
4. Bank provides information about
dependent of age
Hb4: Bank provides information about 0.000 0.265 Reject
Bank’s Website)
Table 2 Perception about cross-selling and up-selling for demographic variables (continued)
is dependent of age
SMS (In Mobile Banking)
dependent of age
Hb7: Bank gives update about products 0.221 0.137 Accept
and services through instant message is
dependent of qualification
Hc7: Bank gives update about products 0.160 0.131 Accept
and services through instant message is
dependent of current profession
Hd7: Bank gives update about products 0.145 0.132 Accept
and services through instant message is
dependent of annual income
Ha8: Bank display toll free number for 0.000 0.238 Reject
Website/Mobile Banking/Internet
8. Bank display toll free number
Hb8: Bank display toll free number for 0.000 0.268 Reject
tele-banking is dependent of
qualification
Banking)
Hc8: Bank display toll free number for 0.009 0.172 Reject
tele-banking is dependent of current
profession
Hd8: Bank display toll free number for 0.005 0.179 Reject
tele-banking is dependent of annual
income
Ha9: Bank has its own social media page 0.719 0.088 Accept
is dependent of age
LinkedIn, You tube)
(Facebook, Twitter,
9. Bank has its own
social media page
Hb9: Bank has its own social media page 0.095 0.153 Accept
is dependent of qualification
Hc9: Bank has its own social media page 0.237 0.123 Accept
is dependent of current profession
Hd9: Bank has its own social media page 0.196 0.127 Accept
is dependent of annual income
136 N. Gupta
Table 2 Perception about cross-selling and up-selling for demographic variables (continued)
dependent of age
Hb10: Bank’s social media page 0.639 0.107 Accept
entertains customer grievances is
dependent of qualification
Hc10: Bank’s social media page 0.028 0.158 Reject
entertains customer grievances is
dependent of current profession
Hd10: Bank’s social media page 0.040 0.153 Reject
entertains customer grievances is
dependent of annual income
Ha11: ATM slip provides information 0.000 0.224 Reject
11. ATM slip provides information
dependent of age
Hb11: ATM slip provides information 0.006 0.190 Reject
about Bank’s products/services is
dependent of qualification
Hc11: ATM slip provides information 0.007 0.174 Reject
about Bank’s products/services is
dependent of current profession
Hd11: ATM slip provides information 0.005 0.179 Reject
about Bank’s products/services is
dependent of annual income
Ha12: Bank has single requisition form 0.008 0.172 Reject
12. Bank has single requisition form
dependent of age
Hb12: Bank has single requisition form 0.262 0.134 Accept
for opting all delivery channels is
dependent of qualification
Hc12: Bank has single requisition form 0.034 0.155 Reject
for opting all delivery channels is
dependent of current profession
Hd12: Bank has single requisition form 0.003 0.183 Reject
for opting all delivery channels is
dependent of annual income
It has been found that the customers’ perception about cross-selling and up-selling
through eBanking channels is not independent of age groups, qualification, current
profession and annual income. It means reject H0 and accept H1. It has been analysed that
age group and qualification majorly influence the customer’s perception for decision
related to banking products and services. It has been understood that customers between
age groups 18 years and 45 years are using this information for making banking decision.
In addition, current profession (salaried and self-employed) also acts as one of the
important demographic variables to influence the customer perception to remain loyal
with the banking services.
Influence of demographic variables 137
5 Conclusion
Not only private sectors but also PSBs acknowledge the change, and almost all banks
are in the process of rolling out online banking, mobile banking through Apps and social
banking extensions to their core offerings in an effort to respond to these changing
consumer demographics. Banks are working in the direction to provide integrated
solution to fulfil most of the needs of the customers. Hence, most of the banks are
working in this direction, to provide increased usage of wide range of services offering
through these delivery channels.
6 Managerial implication
The parameters considered for the study include bank sends information about products
and services in the reply SMS (in mobile banking), ATM slip provides information about
bank’s products/services, bank gives update about products and services through ticker or
flash (On Bank’s Website), bank informs about products and services of the bank while
customers are kept on hold (Over Telephone) and bank has single requisition form for
opting all delivery channels and so on. It means effort has been made by banks to
influence the cross-selling and up-selling of banking products and services through
delivery channels.
It is often cheaper to cross-sell to their existing customers than to attract new ones,
and organisations are eager to explore more profitable opportunities among their existing
customers by cross-selling. Acquiring cost of new customers is higher than what we
spend on existing ones. However, over half of the salesperson’s time is wasted in calling
low-probability prospects who may not be willing to buy banking services. Therefore, it
is very important for the banks to identify the cross-selling potential of the customer.
It has been investigated the demographic data of the customers from which the banks can
identify the customers with cross-selling potential for several products and services.
It has been found that customer demographic variables such as age groups, annual
income, qualification, gender and current profession will help to build strong
and effective cross-selling and up-selling of financial products and services. The
identification of the most influential demographic variable will help to build strong and
effective cross-selling and up-selling strategy of financial products and services.
This study was conducted on the primary data, which has provided significant factors
of customers’ behaviour influencing eBanking usage made by the customers of PSBs of
India. These significant demographic variables may be helpful to PSBs for enhancing
effectiveness of delivery channels too. Similar studies may be made for other banking
sectors. This approach may also be helpful in studying the innovative business processes
like e-tailing, micropayments, mobile payments, etc.
Our study was limited to the customers of PSBs of India, so the findings may be more
closely applicable to PSBs only. The findings of this study may be used to test the service
quality and perception of customers for cross-selling and up-selling of banking products
and services amongst the banks. Hence, these information and analysis will assist the
banks in developing appropriate marketing strategy to offer wide range of services to
targeted customers.
Influence of demographic variables 139
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