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 Restore Branch Profitability
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.
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.
Can a Bank’s Brand Image be a Trap?
Research will tell you that a bank brand attribute as a trusted institution is worth millions of dollars and the envy of so many other types of financial institutions (see recent article from The Financial Brand.)
The problem is breadth. Banks are seen too narrowly, as the place to go for deposits and loans; a place to go to transact. That’s fine if a bank is comfortable with a small share of their customer’s wallet (2 of 10) and are willing to watch other financial institutions earn more and more money by selling other products to their customers; products and services that can help people with other needs as they save for college tuition bills, save for retirement, and move into retirement and old age.
Is a bank’s brand image cast in stone? For the most part, the answer is “yes”. Think of this for a minute. You walk into your dentist’s office. This is the dentist that you have been seeing for several years. He suddenly says, “Take off your shoes and I’ll take a look at your feet, I’m also a podiatrist.” What do you think? “Oh no you’re not, you’re my dentist.” It doesn’t matter if a degree in podiatry hangs on the wall – you are in your dentist’s office and he is your dentist. An image cast in stone. If he really wanted to practice podiatry, he would be better off if you had no preconceived image of him as a dentist.
Banks are in the same trap. They want to take care of more of the needs of their customers but they are tapped by their image – a trusted place to go for deposits and loans.
Read more >>
Potentially more disclosures on the way for banks
In a recent white paper passed around by the administration this week, there are clear signs that more disclosures are on their way. Many believe the new disclosures will be tied to the new consumer protection department that the administration proposes to create. This department will be similar to other government programs that, for example, protects consumers from faulty appliances. Just like a toaster oven is put through rigorous tests to ensure public safety, so too will the next generation of variable annuities.
What do more disclosures mean for the consumer? It means more jargon that has turned them off over the years from WANTING to learn more about financial products and services. You may even make a case that huge disclosures have indirectly caused the financial literacy problem we see today in the United States, making it easier for consumers to become victims of scams and bad product offerings.
I’m not arguing that this department shouldn’t exist. What I’m arguing is what banks should be doing to help prevent another wave of financially irresponsible Americans. They should be providing their customers with the education and guidance they need.
The problem with most banks that say they already provide education, and many do, is they let it sit on their website or in the brochure racks in the branches. They don’t actively merchandise the benefits of what’s inside the information. Instead, they choose to focus on marketing their products such as rates and checking accounts. While the latter is important to grow a... Read More >>
America’s financial literacy problem similar to cooking problem
Last Sunday I was awash with a bit of irony as I watched 60 minutes. As you know, the Fed Chairman held a rare interview with the press. Mr. Bernake said the Fed is aiming to be more transparent and this interview was a way of showing the public they’re serious.
But what sparked me to write this post today was not the interview with Mr. Bernake. It was the following segment on Alice Waters. Alice is a celebrity of sorts in the food industry. She is a pioneer of the “California Cuisine” which promotes locally grown food and organic ingredients. In this segment they highlight her goal to install local produce gardens and cooking classes into our schooling system. She’s even pushing for the White House to build the first ever vegetable garden on the lawn. The irony behind these two segments being back to back is the striking similarities between the financial literacy crisis we face today and the food movement struggle that we’ve been faced with for ages.
Watch beginning of this segment:
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