Competition among financial institutions is as fierce as ever. New customers are still likely to desert you in droves — at rates as high as 50 percent within their first year. And marketing budgets haven’t exactly blossomed. So how does a bank meet revenue goals? The simple answer is retention: Focusing your efforts on sweetening the customer relationships you already have.
Retention makes good dollars and sense. Acquiring new customers can cost eight to 10 times more than you would spend cross-selling products and services to existing customers. Plus, it’s a proven fact that the more connected a customer is to your bank, the longer they’re likely to stay with you. One recent study showed that, on average, a customer using one product will stay with a financial institution for 18 months while a customer using three products will remain with that institution for seven years – almost 5 times longer.
But cross-selling isn’t as simple as telling every customer about every product and service you offer. To be successful, it has to focus on customer needs. Here are four steps to do it right — and reap the rewards. Engage in Person
Your bank staff and tellers are the front line of your cross-selling strategy. They have daily opportunities to ask customers about their needs, and then offer appropriate product or service solutions.
Make sure every front-line staff member has the necessary training to converse constructively with customers.
Leverage Your Data
You collect customer data for a reason: To understand your customers better, and then use that information to provide the most appropriate assistance, in the form of products, services and offers.
Use data, such as transaction behavior, existing accounts, lifestyle factors and demographics, to segment customers into groups based on most-likely cross-sell opportunities.
Offering packages of three or more products/services lets you instantly create sticky customer relationships. From a customer standpoint, make sure there is a benefit to accepting the entire bundle together, at once, versus separately over time.
Use your customer data to determine the most logical product/service combinations for your customers.
Focus on Value
Customers want value. That can mean financial benefits, convenience features or any other advantages the customer gains by doing business with your credit union.
Make sure your marketing always answers the customer’s number one concern: “What’s in it for me?”
Of course, providing quality, relevant products and customer-centric service are always essential to keeping your customers happy. Once you have those foundational elements, adding these cross-selling strategies into the mix can go a long way toward ratcheting down attrition — and pumping up customer loyalty.
Sandra Gudat is president and CEO of Customer Communications Group.