While cross selling is a strategy used across industries, it is especially effective and important in the banking sector. Because banks operate in a very competitive marketplace, getting the most value out of each client is crucial for long-term success. According to Forbes, it’s nearly 50% easier to sell to existing customers than it is to sell to new leads. Cross selling allows bank staff to do exactly this. Read on to discover why effective cross selling is so beneficial to both banks and their existing customer base.
Cross Selling vs. Upselling
Before diving into how banks can best leverage cross-selling, let’s address the difference between cross selling and its close relative, upselling. Both strategies are used to persuade customers to purchase more products or services in order to increase their profits and provide the client with more value.
While they have similar end goals, their differences are found in the approach. With upselling, the idea is to get a customer to purchase a more upgraded level of product or service than what they initially intended. On the other hand, cross selling encourages customers to buy items related to or that complement the plan they are already interested in purchasing.
Advantages of Cross Selling
What makes cross selling so effective in banking is the concept of customer retention vs. customer acquisition. As discussed earlier, it is significantly easier to sell to an existing client than it is to sell to a prospective customer. In fact, according to Outbound Engine, brands have a 60-70% success rate of getting a current client to purchase. However, the success rate of selling to a new customer is only 5-20%. Additional benefits of cross selling include:
No acquisition costs. Huify found that acquiring a new customer can cost five times more than simply serving a current customer. Cross selling eliminates additional acquisition costs for new sales.
Creating brand loyalty. In banking specifically, offering multiple products to their consumers helps position their financial services as a one-stop shop for everything they need.
Increased revenues. By selling additional products when a customer truly needs it, banks can bring more money in while also serving their clients accordingly.
3 Cross Selling Best Practices in Banking
In order for cross selling to be a tactic that benefits both banks and their customers, the right strategies and practices need to be in place. Without the appropriate techniques and solutions, cross selling can appear to be an aggressive strategy to simply increase the bank’s profits. Throughout the process, bank staff should have a client-focused approach, meaning that bundled products are truly relevant and useful to the customer.
Focus on Personalization
With more access to customer data than ever, banks have the ability to get to know their customers on a different level. Tracking purchase history, payment behavior, channel preferences, and borrowing data can be extremely helpful in finding relevant and timely product recommendations. Consistent and accurate customer data lets bankers anticipate the needs of their customers in order to provide them with more value rather than pushing seemingly random products. A personalized and customer-centered approach allows clients to view the banker as a trusted advisor as opposed to a pushy salesperson.
Empower the Banking Staff and Customers
Customer-facing staff have the biggest impact on customer satisfaction since they are typically the ones handling questions, recommendations, complaints, and products. Ensuring that bankers have quick and easy access to all customer information allows them to make relevant suggestions when cross selling. Whether that means addressing a personal loan status, credit card approvals, or auto loan accounts, when banking staff have accurate data, they can build trust with customers. With more confidence in the bank, the cross selling process becomes simpler and more fluid.
Stay in Communication with Current Customers
These days, banking customers go into a physical branch far less than in the past. With access to technology and mobile banking apps, there isn’t much face-to-face interaction anymore. Because of this, it’s important for bankers to stay front of mind even if that means through devices and digital platforms. Frequent communication reminds customers that your services are there and available when they need it. This makes cross selling easier to do since customers feel more of a connection with the bank.
How Liferay Can Facilitate Cross Selling
Cross selling is extremely important and effective in the banking industry. However, banks historically have several operational challenges that can make cross selling difficult. Liferay helps create more streamlined processes that are crucial to a successful cross sell. Liferay helps banks to:
Leverage customer data across disparate systems.
Collect valuable insights so banking staff can make meaningful recommendations.
Segment clients to recommend relevant products online that anticipate their needs.