Financial Marketing and Cross Selling Blog
For years the financial services industry has researched over and over again what their customers are looking for. What are the most important attributes to the relationship they have with their customer? What promises would be most likely to attract new customers? The word service is always at the top or near the top of the list. So what did the marketers and ad agencies do? They all claimed to have great service. But that misses the boat. People define service differently.
When I was in Citibank’s credit card marketing group in the late 1980s we realized this. We found that we needed to define service in our marketing communications in order to make it a meaningful benefit. We were astonished to find that the strongest relationships were actually the ones that had previously had a problem. An inaccurate statement suddenly became an opportunity. It was the handling of the problem that built the stronger bond. A problem that was well handled was like glue to the relationship. We learned quickly and soon our TV commercials were demonstrating real people getting their problems solved by Citibank. We had defined service in the consumers mind and clearly put ourselves as the leader in providing that important benefit.
According to a recent article entitled Piloting for Multi-Channel Marketing by Alan Schiffres and Jim Bramlett of the bank consulting firm Novantas LLC, about 25% of retail bank customers almost never visit a branch after opening their first account and 50% are big users of remote channels instead of a branch. So how is a bank supposed to increase its cross selling when fewer customers are coming into the branch? That question is especially pressing now, when cross selling is seen as a necessity to shore up fee revenue lost under the new Dodd Frank regulation.
There is a way. Let’s think about how educational information links to a sale. Imagine that you want to build a fence in your back yard. It’s likely that you will seek information on how to build the fence before you buy the fence posts. Lots of top retailers are well aware of that. It is why Home Depot has educational information on fence building not only in their store but on their website where they can catch your eye while you are looking for help. They know quite well that if they provide the helpful information that you are looking for, you are likely to come to them to buy the fence posts.
My career in marketing, product development and targeted customer promotion has been about storytelling; how to get a message out, to romance a product, to turn a want into a need. From publishing (Vogue, Conde Nast Traveler, Vanity Fair, The New Yorker) to film (New Line Cinema) to television (Discovery Channel, Travel Channel) to catalogs (Harry & David) , and working in every available communication channel, I’ve come to understand that marketers need to find something truly unique to talk about, a differentiator for their brand in the clutter of their industry, and romance that difference to the max.
Joining the community banking industry in 2008 was an eye opener. Here was an industry with limited product differentiation, trying in some ways to differentiate themselves from the big banks, but just as often following the big bank’s lead on pricing and products. Read more >>
The impact of life event marketing in the financial services industry has been known for years. When someone gets married, they may be looking to buy a house. When someone has a baby, they may be in the market for life insurance. When someone changes jobs, they may be thinking about rolling over their 401(k) plan. And when someone is getting into the retirement zone, lots more comes into play; retirement income, rollovers, and on and on. A recent Forrester Research study of 26,000 online households shows that consumers are 43% more likely to buy a financial product around a life event.
According to the recent 2012 Bank and Credit Union Financial Marketing Survey developed by Jim Marous of Bank Marketing Strategy and Jeffry Pilcher of The Financial Brand, cross selling is at the top of the list of marketing priorities. With fee revenue under pressure from new federal regulation, it is not surprising that generating more revenue per customer is so important. This is nothing new. Looking at this year’s Grant Thornton LLP’s 18th Annual Bank Executive Survey, along with previous years’ surveys, you will see that organic growth (cross selling) has been a top priority for quite some time. Read more >>
In a recent article from the Financial Brand, Datamining Social Media Profiles for Actionable Results, the first paragraph talks about the biggest challenge to cross selling. ”If a financial institution could know that one of its customers just got married…Or had a baby…Or got divorced…Wouldn’t those life events create selling opportunities for that financial institution? If a bank or credit union understood its customers’ life situations, wouldn’t they be able to market specific products and services centered around people’s unique needs? If only there was a way to figure out what was going on in people’s lives…”
As the title of the article indicates, it went on talking about data mining as a way to see these customer needs.
Essentially, “Social Media” is really just a buzz word that has come to be used to describe the ever changing landscape of the internet that we’ve all grown to know so well. The phrase simply refers to all the social networks in existence and the way we, web users, customers, and brands interact with each other online today. Not only can a single social network be used as a marketing tool in itself, but integrating social media channels into your website gives you the power to leverage your website in ways that didn’t exist years ago. The difference between traditional websites and the ones within social media communities is the simple notion that traditional websites speak to a single customer at a time, where as social media sites allow everyone to have a voice. In this sense, social media is the catalyst that makes our everyday web experience so much more dynamic and it has opened the doors for individuals and brands to create their own unique online presence.
What does customer service mean to you? Personally when I think of customer service, I can’t help but have my thoughts be overshadowed by frustrating experiences, automated call services and plenty of dead ends. If you provide any product or service, no matter what it may be, you have to be 100% dedicated to assist your customers when something goes wrong. You can’t simply provide a service and then turn a cold shoulder on your customers when something goes wrong. Customer service is a HUGE factor in how your brand is viewed and when your customers need help with your products or services, they should be able to count on you to provide them the information that will help them, which in turn will increase their loyalty to you in the long run. You may be reading this now and thinking that the connotations attached to a brand’s customer service is something that is hard to change. However, I was recently involved in a scenario with a certain internet service provider that left me utterly amazed.
Mary Beth Sullivan from Capital Performance Group, in her recent blog article The Future of Branches: Reinvention in the Banking Strategies section of the BAI website proposed an interesting solution to retail branch profitability. It’s called sales. She referenced a huge market that banks can own by leveraging their branch network. This market is people who are looking for advice. Martha Stewart realized this a long time ago and built a business around it. People want to be told what to do. It holds true in personal finances as well. People are looking for simple and easy to understand information and guidance from someone they trust. And they will do business with the one who is there to provide it. This includes the enormous baby boom generation that has been turned upside down by the Great Recession. They want to be told what to do as they face retirement – without the confusing jargon.
It is the classic battle between WE and THEY in the financial banking arena. You know your consumers (THEY) need the products and services that you offer but you struggle to find a process that effectively allows them to buy multiple products and services. How can you bridge the gap between WE and THEY and make it an US relationship?
In the May 2011 issue of Bank Investment Consultant, Elizabeth Wine brings up some very valid points about the importance of cross selling and the poor execution that is happening inside many financial institutions.
Managing the cross sell is a task that does not have an end. To do it well, you should never be ‘done’. The art of cross selling involves all parties within the financial institution to be working together. The same BIC article also stated that “ninety percent of a recent BIC survey respondents said the support of senior management was critical for the successful implementation of a cross sell program.” Read more >>