Cross-subsidization of some products within the allfinanz industry continues, especially where those products remain in a developmental or introduction phase. Distribution efficiency . Fundamental to an allfinanz strategy is the convenience or accessibility to the customer. Maximum leverage of distribution means ease of sale of a full range of products through the maximum number of outlets. This in turn translates to enhanced productivity and reduced cost of delivery.
Efficiency is reduced where distribution retains a more specialized approach.
A real challenge for allfinanz groups is the implementation of the strategy at the customer interface. Staff need relevant product training and support as well as appropriate incentives to ensure a satisfactory level of product sales. In a market that is rapidly consolidating, there may be a preexisting level of overlap in customer and distribution bases, which effectively reduces cross-sell potential. Critical mass . The provision of multiple products and the maintenance of a strong distribution network, whether through a large branch or agency network or a multidistribution approach, are inherently expensive.