If you’re reading this article, you know it is a competitive market when it comes to finding new customers to keep revenues stable or growing for your financial institution. Improving cross-selling processes for banks and credit unions is a viable way to ensure a steady stream of revenue from existing customers – in a difficult market.
What Is Cross-Selling?
In the context of financial institutions such as banks and credit unions, cross-selling is the marketing and selling of additional financial products above and beyond those the customer has already purchased. The technique involves offering and effectively marketing additional services, investment vehicles or other products.
What Is Your Cross-Sell Ratio?
To figure it out, take the number of products and services sold divided by the number of customers (or households). Set your goals for improving this number.
The 4-Step Process for Improving Cross-Selling
Banks and credit unions can increase their sales through more effective marketing, better education, and sometimes, simply by asking new or existing customers if they’re interested in additional products and services. The four-step process to make this happen effectively can be understood as follows:
1. Define cross-selling and measure its effectiveness: Different institutions may take a different approach to cross-selling, but it ultimately means selling more products and services to more customers. Understand and define what your institution considers cross-selling and what the goals of improving cross-selling will be. Set up categories and understand if common services such as checking accounts or direct deposit services are considered part of the services offered or if both personal and commercial products will be included in the definition. Determine ways to meaningfully measure the effectiveness of cross-selling initiatives and techniques so you and your employees can see if their efforts are being effective.
2. Establish clear metrics for performance measurement: Your employees are the front line in improving cross-selling. Establish clearly defined metrics for measuring the performance of employees when they cross-sell. A clear set of performance metrics will help boost employee engagement in the cross-selling process and give them clear feedback on how their efforts are working. When employees have standards to strive toward, they’re more likely to put in the extra effort to reach goals and improve sales.
3. Make marketing and cross-selling communications better and clearer: Become thoroughly familiar with how your cross-selling initiatives are being communicated to customers. Evaluate what works and what doesn’t, and discard the ineffective techniques. Strive to improve the quality of communication with customers and prospects at every opportunity and in every channel — from their interactions with customer service representatives to the routine correspondence that accompanies statements or announcements. Create personalized direct mail and email communication programs focusing on gaining engagement and selling checking accounts to new mortgage loan customers, or vice versa.
4. Reward employees who perform well: Establish a reward system for employees who are the most effective at improving cross-selling and increasing revenues. Financial rewards or gifts can be effective, but remember that sometimes public recognition, such as a certificate or plaque, can be just as effective at showing employees you appreciate their efforts. Don’t miss an opportunity to provide a reward in the most appropriate form possible.
How many products does your average customer buy from your bank or credit union? How can you improve your cross-selling process and capture a larger share of business from your existing customers?