Eager for fee income, banks are working harder to get nonmortgage business from their mortgage customers. And the chance to cross-sell is one big reason that banks have aggressively acquired mortgage assets.

Cross-selling efforts have often involved blanketing all customers with the same direct mail. But today, cross-selling has become more a matter of tight targeting and relationship development.

Midlantic National Bank, Edison, N.J., for example, recently revamped its cross-selling efforts to meet customers' specific needs, rather than trying to sell every product the bank has to offer.

"Before we attempt to cross-sell," said Bob Maroney, vice president and director of sales management, "we want to do a profile on the customer and become 'financial physicians'" to meet all of the customer's banking needs.

In the past, Mr. Maroney said, Midlantic looked at the cross-sell ratio of how many products they sold to customers, and the sole goal was to sell as much as possible to as many people as possible.

"We discontinued that method," Mr. Maroney said. "We were probably not meeting the needs of our customers, and were just trying to sell them everything.

"Now we ask basic questions in the beginning and find what needs they might have that even they don't know."

Mr. Maroney said every branch would now have the capacity to analyze a customer's needs.

As part of this initiative, the bank will keep track of a customer's needs along with a calendar that shows important dates for that person.

"If a car loan is due, we'll ask if they would like to hear our rates on new car loans," he said. "We are extremely confident that this will drive sales up."

Physical separation of the mortgage lending department from the bank's branches can reduce the effectiveness of cross-selling.

First Federal Savings Bank of Iowa, for example, found that sales of additional products plunged when it moved almost all its loan officers to the main office from the branches, according to Joanne Morley, sales coordinator.

"We have found what works best is when a loan officer personally makes an introduction to a personal banker, a direct referral," Ms. Morley said. "That brings more success than anything like filling out cards."

Now it is up to the individual First Federal loan officer whether to promote other products to a customer.

Ms. Morley said that the bank was also working on a program to bring loan officers into closer working relationships with personal banking officers.

Key Bank, Albany, N.Y., also gives its customers personal attention in cross-selling.

A relationship manager is assigned to each customer, said Linda P. Duch, senior vice president.

The relationship manager will bring in experts in other areas to advise the customer and to suggest other products. Ms. Duch said.

When a mortgage application comes in, she said, the loan officer will ask the customer if financial information can be shared with other subsidiaries of the bank.

"We can do preapproval for credit cards or home equities and tell them at the time of closing" if the application was accepted, Ms. Duch said.

"Cross-selling is most successful when we take a team approach" in which the relationship manager assesses the customer's needs and "can bring other experts to give an overview of other services," Ms. Duch said.

The relationship manager will periodically check to ensure the customer's financial needs are met, she said.

"In general, if we do a very effective job in giving good and highly personalized service, they are receptive to receiving other services," Ms. Duch said.

Lost Opportunities

Action:

First Federal of lowa moved most loan officers out of its branches.

Problem:

They were no longer able to introduce customers personally to other officers

Outcome:

The total volume of cross-sold services dropped sharply.

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