Cross-selling has been acknowledged as a logical marketing approach to expand retail segments. The purpose of cross-selling is to reduce the customer acquisition costs, servicing, marketing and communication costs etc., and thereby substantially increasing spread for banks.

Banks have now recognized the importance of retail banking along with corporate banking. In these days of tough competition, there is no alternative to survive but to broaden the customer base and keep the transaction/procurement cost within control. The banks which are able to bring to their fold more and more customers by keeping their transaction/ procurement cost within control will ultimately survive in the market. The purpose of cross-selling is to reduce the customer acquisition costs, servicing, marketing and communication costs etc., and thereby substantially increasing spread for banks.

Cross-selling is a continuous process of sale. This is designed in such a way that banks are able to offer products and services to their existing customers. In other words, offering additional product and service to an existing customer is called cross-selling. For example, providing housing loan product to an existing credit holder comes under cross-selling. Cross-selling should take a center stage as a logical marketing approach. Cross-selling has been acknowledged as a logical marketing approach to expand retail segments. In the old world format of business, each business entity managed a separate list of customers and data were rarely shared across the bank. However, in a digitally enabled environment, the entire bank can maintain a common repository of customer data and tag them for all relationships that a customer has with the bank. This allows the organization to get a 360° view of its entire customer base.

Research studies reveal that selling products and services to the existing customers is five times cheaper than bringing in a new customer. It also reveals that by selling three products/services to an existing customer can still bring in 50% increase in profitability. The corporate connection could be used to target the client's cash management needs. It offers ample business opportunities like savings accounts, current accounts, personal loans, housing loans, locker facilities to employees of these organizations where salary is routed through a bank branch. It helps banks in technological upgradation as banks have to maintain data warehousing and data mining which not only does help in cross-selling of products but also in managing asset risk and improving profitability per customer.

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