Cross-selling is an ideal way to create new revenues while decreasing costs. It is far more cost-effective than acquiring new customers. Furthermore, a Gallup study of the retail and banking industry study showed that only 25% of customers thought their bank had their financial well-being in mind.
According to Gallup, “But on average, those 25% of customers have more products — such as checking and savings accounts, debit or credit cards, mortgages, or brokerage and investment accounts — with their bank than customers who do not think their bank looks out for their financial well-being.”
It would appear that an effective cross-selling strategy is closely tied to building trust in the customer. How do banks go about creating a cross-selling program that keeps trust in mind while creating goals that increase revenue?
1. Connect with Customers
Take a look at your on-boarding process. How much are you following up with customers? When bringing a new customer on, it’s important to be a part of the process. Reach out digitally and personally to grow a trusted relationship. For banks or credit unions to create a fruitful cross-selling plan, it’s important to keep the line of communication open. Then, you will be the first financial organization your customer thinks of the next time they need a loan or to open an account.
2. Gather Data on Your Customers and Community
Data collection is extremely important, and in a world where customers are becoming accustomed to customized programs, it’s crucial to an effective cross-selling strategy. Every customer has their own set of needs. Everything from age to marital status can give financial institutions clues as to what products are the best candidates for upselling.
3. Educate Your Customer-Facing Employees
When possible, offer customer-facing representatives reports that emphasize cross-selling opportunities. Using the data you collect, you can empower your staff with the knowledge they need to ask the right customers the right questions in order to leverage the sale. Many of these reminders and tools for salespeople can be automated. They may come in the form of a computer pop-up reminder, text message or follow-up email.
4. Don’t Be Afraid to Ask for Referrals
This is a great and easy way to acquire new customers. If your customers trust the financial institution, they’ll have no problem referring a friend or family member. Referral programs can be incentivized and have seen great success in both small credit unions and retail banks.
5. Evaluate Your Opportunities
The needs of customers change over time. A well-planned cross-selling program isn’t product-centered. It’s customer-centered. This can be done monthly or, using data analytics, it can be generated in real time. Timing means more than you think. By considering the purchasing habits of your customers, you’ll be more likely to get it right. Another way to find opportunities is to tap into initiatives driven by the Community Reinvestment Act (CRA). It’s a good way to address your customers’ needs and build upon existing programs.
Grow Your Bottom Line While Meeting Regulatory Standards
Financial institutions are among the most regulated retail industries. Instead of seeing these regulations as impediments, how about revisiting them to reveal opportunities? Not only will it help businesses grow and thrive, it’ll improve your ratings.
Most of all, this approach will enhance goodwill and trust among customers. What more can you ask for? To learn more about how you can improve your CRA outcomes in 2018 AND develop cross-selling strategies that jive with industry best practices, read our white paper: 10 Big Ideas to Improve Your CRA Outcomes.