Rebecca Hellmann
Rebecca Hellmann Aug 23, 2018

Are you maximizing your primary account holders? Why cross-sell matters

It’s true: Your account holders want personalized offerings. Accenture Interactive polled more than 1,500 consumers in the 18-60 age range from the United States and United Kingdom and here’s what they found: 58 percent are more likely to purchase with a business that recommends options based on past activity.

Wait a sec. Does that mean an account holder with several mid-to-large-ticket purchases at hardware/home stores, for example, might actually want their financial services provider to reach out about home improvement loans?

Yep.

BAI Banking Outlook statistics from 2018 reveal the opportunities at stake. Two-thirds of respondents (66 percent) indicated that they use just one institution for their loan banking relationships. If they’ve just opened an account with you, that represents an ideal time to get them on board—or at least let them know what you have to offer.

In reality the likely reason consumers don’t reach out to their bank or credit union about home improvement loan options is because they do not know the available options. Or they think maybe that Home Depot card with 24 months at 0 percent interest will work for what they want to accomplish. (For example: Bob next door used his card when he remodeled his three bathrooms, and swears by it. Just budget to pay off the full purchase within the 24 months and you won’t have to worry about the interest waiting on the sidelines.)

The bottom line is this: Your account holder knows about the store credit card because of cross-selling.

When people visit the store or browse online, big-box retailers seize the opportunity to push additional wares. In the case of store cards, signs hang throughout the store. Special offers featured on TV, in email blasts, online and on store shelves often reference the card and its “benefits.”

Why cross-sell?

I could bore you to tears with generalizations and examples. But what if I throw out some statistics instead?

  • It costs more to acquire a new customer than to sell more products/services to a new customer: 68 percent more expensive.
  • Less than half of revenue (5 to 30 percent) is generated through initial sales. The rest comes from those with whom a relationship has already been established.
  • Probability of closing a sale to an existing account holder is much higher than landing a new account.
  • Sales to current account holders take less time to generate ROI: typically one quarter versus one year or more.
  • More products/services make for stickier relationships. According to Harvard Business School, an increase of 5 percent in retention can equal up to 95 percent increase in profits.

The point? Cross-selling is good for business and bottom lines in ways you might not have imagined.

Cross-sell effectively

As their primary financial service provider, you already have a good idea of the purchasing habits and financial situations of your account holders. This provides unique insight into life stages and interests but also institutes a level of trust that standard retailers have not earned. You handle their money.

Some simple steps can make your cross-sell efforts more effective:

  1. Evaluate needs. Make sure to analyze trends in your account holder behavior, of course. But don’t be afraid to ask questions, send out surveys and give your account holders plenty of opportunities to keep you updated on their future plans and requirements.
  2. Identify barriers. What could keep your account holders from homeownership or planning for retirement? How can your products or services help? Offer solutions that not only prepare them for use of other products but also help build trust. Engaged account holders purchase 90 percent more frequently.
  3. Raise awareness. Account holders cannot approach you about a product or service if they don’t know it’s available. Besides setting triggers for when to promote specific cross-sell items (based on behavioral and purchase history), be sure to associate products with one another to help keep them top of mind.

The cross-sell commitment: Now what?

Craft qualification criteria for each product or service offered based on target personas. For instance, qualifications for a home improvement loan may include owning a home at least 10 years old or a recent spike in home improvement purchases.

Finally, develop a marketing funnel to capture potentially interested parties and raise awareness. Strategies for a home improvement loan may include homeowner-focused surveys and links to view and/or download content about different home improvement projects. You could couple this with direct mail, emails, banners and ATM ads that promote your home improvement loan.

The goal, of course, is to get your account holders to contact you. That said, high engagement levels should definitely provide a hint for outreach.

Putting it all together: Maximization through communication

Banks and credit unions can benefit a great deal by maximizing their primary account holder relationships. This cross-sell strategy helps increase communication and engagement because it focuses heavily on the behaviors of each account and provides product and service outreach accordingly. Customers welcome the perceived sense of personal attention while financial institutions generate greater return on investment. It’s a win-win. And we all love those. Or, your could say that given the right framework, cross-sell crosses over into a land of mutual opportunity.


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An inquisitive marketing professional with more than a decade of experience, Rebecaa Hellmann is the director of marketing for FCTI, specializing in brand development, content strategy, digital marketing.

If you liked this article, check out BAI’s upcoming webinar: BAI Banking Outlook: Leading Indicators in Customer Retention.

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