December 18, 2017
Cross-selling is an inexpensive and immediate strategy for increasing a bank or credit union's profit. According to Forbes1, "it costs 500% more to acquire new customers vs. retaining existing customers." It's therefore prudent for banks to cross-sell their products, but how?
For instance, if you've ever been subject to flooded mailboxes, inboxes, texts, and phone calls, all from one company, then you know someone trying to aggressively sell you their product can get annoying. At some point, you're going to stop reading their messages, press delete, and unsubscribe. In really bad cases, you might opt to go to a competitor because spamming is just plain rude. Thus, there seems to be a line between cross-selling and over-selling customers, not to mention ensuring the content of your message delivers well.
Because cross-selling can mean the difference between losing customers and increasing profits, we've compiled five proven strategies for banks to maximize their cross-selling potential.
1. Determine How Often to Contact Clients by Their Individual Needs
Determining how often to contact clients is not easy, as everyone has their own tolerance level before they feel like you're "spamming" them. Therefore, there is no bright-line rule as to how much is too much. Instead, you'll have to use common sense. Some common-sense tactics include:
- Contacting clients annually after reviewing their file and determining what other products and services they would benefit from.
- Contacting long-term clients more often if they've shown particular interest in your opinion.
- Contacting newer clients more often if it seems they've yet to understand the financial services available to them.
- Contacting clients if time is of-the-essence to take advantage of an offer.
- Contacting clients with pertinent advice if a change in law, regulation, or tax code will affect them.
2. Determine How You Will Contact Customers
In-person meetings are always the most valued.2 But there is a growing list of other ways to contact clients. This includes deploying the use of social media through newsletters, emails, texts, and tweets. Just be sure to follow laws that may require clients to first opt in.
3. Keep Content Relevant With The 80/20 Rule
When contacting clients, it greatly matters to not be too self-promotional. For instance, a survey by Kentico Software3 found that many consumers distrust self-promotion. In that survey:
- 29% of consumers lost trust in an otherwise objective blog post if it signed off with a company promotion.
- 46% of consumers started losing trust in content if they were unable to corroborate what's written with non-company sources.
- 49% of consumers will try to corroborate content with their own research.
Given the number of consumers who dislike self-promoting, Social Media Today4 suggests going by the 80/20 Rule. It holds that only 20% of content (in newsletters, emails, etc.) should be about your brand. The other 80% should be both informational and sharable.
4. Take a Hint
Even if you follow the 80/20 Rule, if you post three times a day, 20% promotional content may still be too much. You'll therefore want to observe customer behavior every time you implement a new strategy to see if there's any correlation between the strategy and an uptick or downtick in sales.
Observations that could indicate you're over-selling can include:
- a drop-off in email subscriptions;
- always getting sent to voicemail;
- light feedback on surveys; and
- declining close rates.
While other issues like poor customer service can be the culprit, being overly aggressive with cross-selling might be too.
5. Incorporate Big Data in Your Marketing Strategy
Companies are increasingly relying on Big Data to inform their marketing decisions. It allows companies to track browsing history, and then use that history to personalize product offers. According to datanami (5), company surveys show that using Big Data has resulted in a higher ROI with about three-quarters of the companies. Its effectiveness likely lies in how well companies use Big Data to personalize product offers, as customers value being specially treated.
6. Provide Employee Incentives for Excellent Customer Service
While many of the above strategies focus on incorporating technology, banks should always remember that no amount of technology can make up for any amount of rudeness. While interpersonal relations is not everyone's forte, banks can build up those skills through:
- customer-driven bonus plans;
- quick rewards for higher performance; and
- training.
In devising a bonus or rewards plan, employees should all get the same reward once they meet a goal. This strategy will help prevent employees from feeling under appreciated.
If you have questions about this article or want to share your thoughts and insights, we'd love to hear from you. Feel free to contact us at Lorman Education Services.
(1) Sujan Patel, "Are You Overselling Your Customers? 10 Critical Signs You Can't Ignore." January 7, 2017. Available at https://www.forbes.com/sites/sujanpatel/2017/01/07/are-you-overselling-your-customers-10-critical-signs-you-cant-ignore/#4e772aa63ddb.
(2) Andrew Beattie, "Keeping Clients Through Good and Bad Times." Investopedia. Available at https://www.investopedia.com/articles/professionaleducation/10/keeping-clients.asp.
(3) Social Media Today, "The 80/20 Rule: Why Just 20% of Your Social Media Content Should Be About Your Brand." Available at https://www.socialmediatoday.com/content/8020-rule-why-just-20-your-social-media-content-should-be-about-your-brand.
(4) Natalie Burg, "Study: Self-Promotion Kills Consumer Trust in Branded Content." The Content Strategist. May 27, 2014. Available at https://contently.com/strategist/2014/05/27/study-self-promotion-kills-consumer-trust-in-branded-content/.
(5) Alex Woodie, "Where's the ROI in Big Data?" September 8, 2015. Available at https://www.datanami.com/2015/09/08/wheres-the-roi-in-big-data/.