What Is Bank Cross-Selling?

Cross-selling is an emerging marketing method that uses CRM (customer relationship management) to discover multiple needs of existing customers and sell multiple related services or products by meeting their needs.

Cross-sell

Cross-selling means using CRM (

personalise

Competitive products: products of the same type but different brands, such as LCD color TVs, with the same main parameters. The current product is SAMSUNG. Sharp, Philips, etc. are recommended for customer comparison. .

Complementary products: They are not competitive with current products, but they are complementary. If customers buy together, the current products will get greater value. For investors of newly built five-star hotels, while deciding to purchase Trane-China's central air-conditioning, they can also choose Inco's security access control system.

Products of the same brand: Other similar products of the same brand. For example, while you are looking at Apple iPod, the sales assistant recommends MacBook Air to you.

Accessories products: This is the associated accessories of this product. For example, when you purchase a car, you will be offered optional warranty services and insurance.

Products with similar prices: Some customers have tighter budget controls, but they have less stringent brand requirements. At this time, recommend products with similar prices (note the selection of products with similar parameters and different brands) to customers. Customers can compare them and make a purchase decision.

One is to increase customer loyalty by increasing customer transfer costs. The more customers buy our products and services, the less likely they are to be lost. Data from banks show that the churn rate for customers buying two products is 55%, while the churn rate for four or more products or services is almost zero.

Second, reduce marginal cost of sales and increase profitability. Practice has proven that the cost of marketing a product and service to an existing customer is much lower than the cost of absorbing a new customer. Data from credit card companies show that, on average, credit card customers do not begin to make a profit until the third year. This shows that the cost of absorbing new customers is very high, and cross-selling existing customers has naturally become a shortcut for many companies to increase return on investment.

Broadly speaking, cross-selling also includes recommending products and services to other customers who have a relationship with them. For example, if the marketing department of company A orders a batch of copiers from you, you can take the opportunity to sell the product to the company's finance department or other departments.

According to the Boston Consulting Group (BCG), the key to obtaining cross-selling drivers is whether the company's organizational structure is appropriate and its strategy is effective. BCG summarizes three golden rules for cross-selling.

Cross-recommendation and cross-selling The so-called recommendation means that different departments of the company need to identify their own high-quality customers and systematically transfer them to other departments. When you need to sell different products of the company to the same customer, proactive and timely recommendation is a key step.

In order to enable different departments to recommend each other's quality customers, it is necessary to change the behavioral patterns of employees so that they are willing and accustomed to sharing their quality customers with each other. This may sound easy, but in practice, this change is not so easy to implement. Salespeople think, "Why bother? That's my client." Some banks and insurance companies try to use financial incentives to change this awareness of employees, but the results are often unsatisfactory. As a result, some institutions have begun to try different approaches.

Change the current organizational structure. There is a case where a relatively well-known global financial institution in the industry is trying to achieve as much cross-selling as possible between its investment banking division and property custody division. For this financial institution, financial incentives are difficult to achieve. Those investment bank customer representatives with high salaries, it is difficult to give up their high-quality customers for a little material incentive. Therefore, the financial institution decided to change the current organizational structure: a high-quality client management team was established to ensure that the investment banking division recommended clients to the property custody division.

Of course, it is not enough to just change the organizational structure. We must also focus on the cultivation of a "strong collaborative culture." This "strong collaboration culture" will instill in employees the idea that persistent sharing of high-quality customers will be beneficial to the development of the entire company, and therefore to every employee. This financial institution has greatly changed the behavioral patterns of its employees by promoting a "strong collaborative culture." In terms of personal client business, this financial institution has been recognized by the industry for its efficiency and is considered to be the most efficient financial institution.

Achieve mutual recommendation between multiple trading channels. The starting point for this is to allow customers to obtain a complete and continuous experience: customers can start a transaction in one transaction channel and complete the transaction in another transaction channel. As long as these channels can share customer information and fully understand the transaction path taken by customers.

For example, a customer who applied for a mortgage business online suddenly interrupted the application, even though the form he was filling in had not been completed. Then the next time he calls the bank, the customer service representative will need to look at the information of the customer's online application displayed on the computer screen and pass it to the relationship manager in time, and the relationship manager will track that customer over the phone. Through such a collaboration across transaction channels, a commercial bank has made approximately 10% of online mortgage service viewers become offline mortgage service buyers.

Carrying out group retail Cross-selling for organizations is still in its infancy in many markets. But some pioneering banks and insurance companies are doing this type of cross-selling in a so-called "group retail." They have entered into exclusive agreements with other financial institutions, retail institutions or educational groups, and require that relevant information about employees, customers or students of these institutions can be shared with each other, or according to the requirements of each other, banks and insurance companies Customers provide services to develop personalized products and services for them.

"Group retail" has spread very quickly in the financial services sector. In Spain, for example, Bankiilter has opened branches in the offices of some professional service companies to provide more convenient services for these professional service companies and their employees. This initiative has greatly improved the cross-selling performance of Internet Banking, and the number of product purchases per unit customer has increased rapidly from 2.5 to 6.

A similar purpose can also be achieved by entering into a contract. ABN AMRO's asset management contract with Swedish LF Insurance Group includes such clauses: Swedish LF Insurance Group recommends its premium customers to ABN AMRO, and ABN AMRO can sell its mutual fund products to these customers.

Forming a team for cross-selling When cross-selling for customers requires professional products and technical support, the method of forming a team will be very effective in promoting cross-selling.

There is such a case. There is an insurance company that develops multiple insurance businesses. Initially, it organized its own life insurance business and non-life insurance business into two independent business units, each of which has its own sales team. Later, the insurance company changed its business model and formed an interlock team. In an interlocking team, life insurance salespeople work with non-life insurance salespeople, and each customer's files are assigned to a separate interlocking team. The insurance company began to target customer relationships and cross-selling based on customer relationships. In the past, no matter whether it was a life insurance salesperson or a non-life insurance salesperson, efforts in this area were very limited. Not only that, the insurance company also tightly tied this goal with its incentive policy. Salespeople can earn year-end bonuses as long as they complete 75% of the daily target of the annual target. Times. In fact, these efforts of the insurance company have resulted in unprecedented cross-selling performance.

There is such a European bancassurance company that plays an important role in the industry. Its general sales team (for banking products) is separate from its dedicated sales team (for insurance products), and its goal is to strengthen the sales of insurance products. Among them, the ordinary sales team only sells a few insurance products, while the specialized sales team focuses on the market segment of organizational buyers, not the mass market segment that the company is targeting. Therefore, ordinary sales teams have no incentive to share high-quality customers with specialized sales teams. The end result is that the company's desired insurance sales goals have not been fully realized.

In order to solve this problem, the company decided to combine the general sales team with a dedicated sales team to jointly sell insurance products to the mass market segment. The company trains these salespeople first, and also simplifies insurance products to make it easier for salespeople to understand and sell. In addition, the company has also adopted some incentives related to insurance sales, and designed a plan for ordinary sales staff to sell two life insurance products and one non-life insurance product each week, and their performance in completing these goals will become their One of the important factors to get a job promotion. As a result, the company's insurance sales performance in the mass market segment improved, and the overall revenue of the two types of banking and insurance business increased by more than 50% for two consecutive years.

No matter cross-selling of products, cross-selling of trading channels, or cross-selling of market segments, the company's use alone or at the same time can effectively increase the company's financial return, improve customer retention and reduce marketing costs. Wells Fargo's survey results show that compared to acquiring new customers, cross-selling old customers pays only one-tenth the cost.

1. Provide consistent, coherent products, services, and solutions. Customers will not choose a single product, service, or solution unless it is clear that a systematic, integrated product, service, or solution provides more value.

2. Identify unique target customers and reverse engineer products, services, and solutions from the customer's point of view: understand their experience, use their language, and consider their priorities.

3 Provide updated sales training. Cross-selling requires sales staff to acquire new skills, understand different decision-making processes of customers, identify different key decision makers, and communicate with key people in their language.

4 Determine the responsibilities of different sales team personnel at various stages of cross-selling.

5. Develop performance appraisal and bonus policies.

In the supermarket, there is an interesting phenomenon: diapers and beer are sold together. But this strange move has increased both diapers and beer sales. This is not a joke, but a real case that happened in a US Wal-Mart chain supermarket, and has been talked about by businessmen. It turned out that women in the United States often told their husbands to buy diapers for their children after work. After the husband has bought the diaper, he has to buy the beer he loves, so there are still many opportunities to buy beer and diapers together. What made Wal-Mart discover the relationship between diapers and beer? It was the merchant who discovered the magical combination through detailed data analysis of the original transaction figures of the supermarket for more than a year.