Applying Latent Trait Analysis in the Evaluation of Prospects For Cross-Selling of Financial Services

International Journal of Research in Marketing 8 (1991) 329-349

21 Pages Posted: 25 Apr 2014

See all articles by Wagner A. Kamakura

Wagner A. Kamakura

Rice University

Sridhar N. Ramaswami

Iowa State University - Department of Management and Marketing

Rajendra K. Srivastava

Singapore Management University - Lee Kong Chian School of Business

Date Written: February 1991

Abstract

Identification of the order in which households acquire financial services has important implications for market seg­mentation and cross-selling strategies. This study illustrates a procedure by which financial institutions, based on internal records can estimate the likelihood that a customer will purchase/use additional services. The methodology discussed in this study positions financial services and investors along the same continuum according to the particular ownership pattern. The location of an investor indicates his financial expertise and resources, while the location of a financial service measures the level of expertise/resources needed for ownership of that service.

A key feature of the methodology is its ability to predict the probability of ownership of some financial services given information on (non-)ownership of other services. This study concludes with an illustration applying the methodology for targeting customers for cross-selling efforts.

Suggested Citation

Kamakura, Wagner A. and Ramaswami, Sridhar N. and Srivastava, Rajendra K., Applying Latent Trait Analysis in the Evaluation of Prospects For Cross-Selling of Financial Services (February 1991). International Journal of Research in Marketing 8 (1991) 329-349, Available at SSRN: https://ssrn.com/abstract=2428313

Wagner A. Kamakura (Contact Author)

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
(713) 348-6307 (Phone)

Sridhar N. Ramaswami

Iowa State University - Department of Management and Marketing ( email )

Ames, IA 50011
United States

Rajendra K. Srivastava

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

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