Financial Marketing and Cross Selling Blog
Cross Selling Continues to be a Top Priority of Bank and Credit Union Marketing
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 >>
Creating Cross Selling Opportunities
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.
How to Make a Bank Reputation Drive Cross Selling
A good reputation is undoubtedly important to any financial institution. It translates into more new and more loyal customers. A recent article in American Banker, discussed the results of the American Banker second annual survey of bank reputation. This 30 bank survey was conducted by the Reputation Institute an evaluated reputation across several dimensions including corporate citizenship, financial performance, governance, innovation, leadership, perceived workplace environment and products and services.
The article noted that BBVA Compass enjoyed the most improved image, moving up 11 slots into the No. 5 position. When asked about this, the bank responded by saying that they used social media such as Twitter to monitor and respond to complaints. In other words they listened to their customers and fixed their problems, building stronger relationships than existed before the problem. Problems can actually help build your brand. Their experience defined for them what good service is in banking.
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While WE are Cross Selling, THEY are Cross Buying
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 >>
Cross Selling In Banking Starts With Education
If your consumers don’t know all the products & services your institution offers, how are they supposed to ask about them?…or better yet, buy them!
Education will create value if you provide it in such a way that it is useful and timely. There is a lot of ‘financial information’ available in the market, mostly designed to tease you with bits of good information then go for the kill – the sell. Education is not a priority in these cases and cross selling is not a priority.
Institutions have the ability to create one of two experiences for their banking consumers: A Selling experience or an Educational experience. It is understood that consumers will be significantly more likely to purchase a product or service from an entity that provides them with good information when they are in the ‘evaluation’ process than just trying to sell them the sizzle. It is especially true when it comes to financially oriented products and services where there needs to be a level of trust before they purchase. Read more >>
REWORK: Recommended Book For Bank Marketing and Management
How can a business book written by the founders of a small software development company be applicable to bank executive and marketing professionals? I asked myself the same question. REWORK was written by Jason Fried and David Heinemenier Hansson, the founders of 37Signals, a company that has created several products that help teams work together more effectively. For bankers, conventional ideas and methodologies aren’t what separate you from your competitors. Most often it’s your ability to be open-minded to new ways of thinking and putting them to work…or sometimes reworking them entirely.
Prior to reading REWORK, I was somewhat familiar with the company 37signals and the products they developed but never really knew their background. For most that have never heard of 37signals, they are a small software company that have developed a number of web-based apps for collaboration, information sharing and project management which are now used by millions around the world.
REWORK provides the reader with the insight into the attitudes of the founders and a basis for the reasons for their success. As a designer & developer myself, I wasn’t sure how their philosophies and ideas could really be applied to the large scale audience but they certainly managed to do so from my perspective. If you subscribe to conventional wisdom, this book may not be for you because the authors tend go against your experience and what has been instilled into you during your college and post-collegiate years. Nonetheless, this is a worthwhile book, for everyone from the single self-employed individual, the small business owner, all the way up to the larger institution management and marketing professionals.
The path to more fee income for financial institutions
It’s been discussed time and time again – banks need more fee income to remain stable in this volatile market. For the past few years this type of revenue has been mainly based on fees from debit card use and overdraft protection. According to a recent Gonzobanker article, 80% of fee income comes from these two sources.
It’s no secret that these two sources are now in danger of falling off the cliff. In this same Gonzobanker article, they suggest taking an account analysis approach to retail customers, similar to how small business accounts are handled to determine if certain fees will occur or not based on the accounts activity every month. While I’m not against this approach, I feel strongly that growing out a relationship versus changing up the way a customers existing services are priced has greater potential for both the bank and the customer.
One of the greatest opportunities for banks and credit unions to continue generating new revenue is by effectively moving existing clients into new products and services that go beyond the typical product scope. Services such as investments, insurance or trust. Done right, a well managed brokerage insurance program can add significant revenue to an institutions bottom line. According to Michael White’s recent Bankinsurance.com News report, Oneida Savings Bank in... Read More >>
The future of cross selling in banks
A recent report from the Mercator Advisory Group, Cross-Selling Through Multiple Channels: Soft Selling to the Jittery Customer, highlights the areas where banks have the greatest opportunity to cross sell to their customer base. The two areas that they have narrowed in on are somewhat of an ironic pair – smart phones and branches.
While this may seem counter intuitive to some, to us it makes perfect sense. We’ve been advocating for several years now that a banks website should not be seen as a separate touch point from the branch but rather as a touch point that can help drive customers to your branches. Too often banks view their website or mobile devices as just a convenience for their customer but in order to be successful, banks must take advantage of places like their website to help drive the client back to them for help.
To do this, banks must be doing more then talking about their specific products such as their various rates for special savings or CD accounts. Today, the American consumer is looking for answers to the many financial decisions they face throughout their life. And with all that’s going on today there’s no better time for banks to take a leading role in providing this information, not the government. ... Read More >>
What is the true meaing of Cross-Sales?
A recent article in the BAI Community addressed this question and I thought it brought up some good points. Cross selling has been a hot topic for several years now in the financial world. In fact, for the past several years, increasing cross sell opportunities has been the number one initiative for bank executives according to the Grant Thornton study (80% of respondents ranked it as their number one initiative this year).
David McNab of Objective Business Services and FlowTracker Analytics Inc. wants to help define just what a cross-sale consists of in his BAI Community article. According to McNab, “we don’t think eating your own lunch is selling.” What he means is that a lot of banks gauge cross selling by the number of different products that a customer has. The problem with this calculation is “it counts products (however defined) per customer (however defined) instead of looking at the source and destination of customer money flows.”
Unless new money is involved, it shouldn’t be considered a cross sale in Dave’s approach. However, one may argue that when you move money from one account to another, the new account may introduce opportunities to increase fee income that the previous account wasn’t able to... Read More >>
Branch referral generation survey
Branch referral generation is important if you’re a program manager or sales rep inside a bank or credit union. The branch network is one of the greatest advantages a bank has over the competition yet time and time again we here that the opportunities generated by the brick and mortar foundations are far and few between.
This is not a new discovery. There are hundreds of firms, including Truebridge, who provide solutions for solving the problem. Yet even with all these solutions, the branch referral problem still remains a common issue in the banking world.
Last fall we conducted a survey in conjunction with the Bank Insurance & Securities Association on Cross Selling Success Factors. In this study, which included responses from 375 individuals and 120 financial institutions, over 70% said that branch referral generation is key to the success of cross selling investment and insurance services inside a bank. Yet only 37% said that their bank was either “very able” or “able” to do just that. Download a copy of the survey.
In an effort to help understand what is standing in the way, we are conducting a new survey on Branch Referral Generation that is intended for program managers and sales reps who rely on branch referrals to grow their books of business.
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