Not All Cross-selling is Effective
I heard an interesting story from a co-worker the other day regarding a real-life experience at his new bank. He recently purchased a car and the financing for the loan was through a bank that he previously did not work with. During the acceptance process the bank offered incentives to open a DDA account and he decided to take the bank up on the offer. The loan rate improved and they offered competitive services, so this was a win-win for both parties.
This is when it got interesting. As soon as he opened his DDA account he started getting pre-approved offers for new auto loans, the very product he just opened that started the process. And this happened on numerous occasions. Not only was this very annoying to the customer, it is also a waste of the banks time and resources.
Clearly the bank’s marketing processes have not evolved from being event-specific to more customer-centric. Instead of simply taking all DDA accounts and cross-selling auto loans, the bank would be better served to identify new products best suited for the client. At a minimum, the bank should not cross-sell products that the client already has.
Banks cannot always expect consumers to follow a traditional on-boarding scenario, such as an initial relationship based on a deposit account that then grows from there. More consumers today establish new relationships with banks via alternative paths such as getting an indirect auto loan or mortgage. Banks are looking to expand the number of products used by consumers to create more profitable, long term relationships and they need to take into account the various account on-boarding scenarios when developing their cross-selling strategies. An execution failure during a cross-sell campaign, such as my co-worker experienced, will not build long-term trust and may hurt long-term growth opportunities for consumers who don’t feel like the bank understands them and their needs.
A total relationship view for a customer is important to develop effective, intelligent, and successful campaigns that build deeper account relationships and profitable customers. Technology can incorporate bank’s existing account relationships and external data to mitigate challenges in the above scenario and deliver better decisions to your sales and servicing platforms.
This post was contributed by: Lee Grice.
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