Cross-Selling Stumbles at UMM Bank Indonesia

by: Damian R. Beil

Publication Date: July 11, 2019
Length: 8 pages
Product ID#: 4-354-573

Core Disciplines: Marketing/Sales, Operations Management/Supply Chain

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Teaching Note

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This case describes UMM Bank in Indonesia, a service operation that is working to improve profitability by selling more services to its customers. To achieve this goal it is using a cross-selling approach entitled the Personalized Plan Program (PPP). However, there are several challenges with the PPP initiative. The cornerstone of the PPP is a free, one-on-one meeting between the customer and a bank sales agent, if the customer responds by providing some information online within a 15-day promotional period. But these meetings often must be scheduled after the promotional period, seemingly due to the amount of time the bank’s support staff needs to prepare Personalized Plans for customers once they enter their financial information online. UMM Bank sales agents imply that clients are frustrated with the delays and this may be hampering the success of the entire PPP initiative.

Students will learn that initiatives like cross-selling can stress a service system’s operations. Therefore, it’s important to understand the operational levers of capacity, demand management, demand variability, and pooling to help anticipate and overcome these challenges.

Teaching Objectives

After reading and discussing the material, students should:

  • Understand operational challenges that accompany a financial service in the banking industry.
  • Describe how basic queueing theory intuition can be used to help explain good or bad business performance.
  • Recognize the need to cope with variability.
  • Identify various ways to manage variability, such as pooling resources, demand management, or quality control.