Christian Klacko May 1, 2013

Who Owns Cross Selling (and Who Should Own It)?

So, when was the last time you went to a meeting and the subject of cross selling didn’t come up? In all likelihood, the conversation turned to the results of the latest cross-selling campaign, the plan for the next one and the projected return on investment (ROI). While we’re all keenly aware of the opportunities cross selling represents on paper, why is it that this lucrative revenue stream remains largely untapped?

We all know that there are many variables that can impact the results of a cross-selling campaign. However, instead of looking solely at the end results, let’s take a step back to better understand one factor that can influence the outcomes even before the campaign is created. That factor is the “ownership” of the cross-selling effort. More specifically, who is responsible for driving it, supporting it and delivering results?

Cross-functional Teams

Bank marketers may rightfully claim that cross selling belongs in their department. However, there’s also the customer service team to consider. After all, they’re the ones having daily one-on-one interactions with customers and their insight from the front lines is invaluable. And, of course, we can’t forget about the CEO and senior management who are entrenched in regular discussions about the bank’s cross-selling strategy and its impact on the bottom line.

All of these different roles contribute to cross selling, yet without the formation of a dedicated cross-functional team, banks will continue to see low ROI on their cross-selling campaigns. In the ideal scenario, the cross-selling team is led by marketing yet includes a representative from each of the following departments: customer service, sales, executive leadership, and information technology (IT).

The importance of each of those functions cited above is obvious with the one exception being IT. More often than not, the IT team is an afterthought. However, without IT involved in the strategy and execution, your cross-selling campaign results will hover in the low single digits because IT has the most direct path to customers, especially since more consumers are banking online. IT can help you identify who’s ready and qualified to acquire a new banking product.

Of course, we’re referring to big data here. For years now we’ve been told how big data is going to change cross selling. Yet for many marketers, culling through the mountains of transactions to take educated guesses on who is most likely to be in the market for a mortgage or a 529 savings plan isn’t always easy.

The biggest challenge in applying big data to your cross-selling efforts is knowing what to look for. This is where the value of a cross-functional team stands out because individuals on the team can apply their knowledge and experience to the terabytes of raw data to create highly targeted campaigns. For example, imagine that you have 10,000 online banking customers. Looking at their transactions over a three-month period, you may find recurring payments on automotive repairs or high credit card balances that don’t decrease despite the fact that additional purchases haven’t been made. The next time these customers are online, you may want to ask a simple, direct question such as, “Are you thinking about buying a new car?” or, “Would you like to save $300 on your monthly credit card interest charges?”

It makes sense that these customers would be ideal targets for a special car loan offer or a credit card with a lower rate. Reaching them can’t be done through a silo marketing effort. When you apply the experience of your cross functional team to big data, you can present the right set of customers with a compelling reason to either learn more or take you up on an offer. This is a solid formula for cross selling.

Rye, N.Y.-based USAlliance Federal Credit Union recently conducted a series of digital marketing campaigns to a limited audience of 11,958 of its online customers and in one month interviewed 15% of its online banking population; converted 50% of interviewees into warm leads, generating 1,098 qualified leads; and converted 8% of loan product leads to sales. These results can be attributed to the fact that IT, marketing and senior management were working closely together.

Now that we understand who should be on your bank’s cross-selling team and why, here are three recommendations for driving stronger campaign results:

  • Get management on board. Building a cross-functional team is going to require a champion from the senior management team to identify and support a dedicated team that represents the different functions across the bank.
  • Modify the marketing mindset. Bank marketers must break out of traditional approaches to marketing and be open to incorporating the insight that comes from different pockets of the organization.
  • Focus on quality versus quantity. In today’s marketing world, you’re no longer trying to appeal to hundreds of thousands of customers simultaneously with a broad marketing message. Instead, it’s all about personalization. With more targeted offers to a smaller audience, you’ll be able to increase response rates that go well beyond the average two percent from direct mail campaigns or the 0.01% response that banner ads yield.

There’s no question that cross selling will continue to be a top priority for financial institutions, especially when you consider that the average consumer owns seven banking products yet only two are likely to be with the same financial institution. Innovative financial institutions that adopt new approaches to cross selling will be able to seize these opportunities, leaving their competition far behind.

Mr. Klacko is co-founder of Cambridge, Mass.-based Micronotes Inc. He can be reached at christian@micronotes.com.

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