Financial institutions are still faced with the age-old problem of trying to help their customer service representatives (CSRs) be successful at selling more banking products.
Most of these employees are not trained to be sales people and not all consumers are good market candidates for cross-sell products in the first place. Additionally, not everyone is going to be interested in the same type of product. Banks struggle with increasing their close rates on product sales because CSRs become frustrated hearing “no” too often.
So why do some banks repeatedly make the same offers to everyone that walks through the door? They haven’t been able to master a better approach, because it is really hard to do.
Insight Marketing Inc. recently studied consumer behavior data and found that in any given time period, roughly 60% of a bank’s customers do not have a propensity to buy anything. That makes sense if you consider how often someone buys a new car or house, switches checking accounts or adds another credit card to their wallet.
That doesn’t mean that those customers aren’t qualified for a variety of options - home equity loans, deposit or credit products, investment opportunities, etc.
What banks really need to know is who qualifies, for what particular product, and how interested they are in purchasing one of those options. That degree of sophistication changes the entire approach to cross-sell.
In the past, customers were prequalified as a good cross-sell candidate based largely on their credit score. That strategy is outdated and ineffective.
Most of us have had the experience of being presented with the same credit card offer every time we enter our bank. It has gotten to the point where I say “I’m not interested in a credit card” before I say hello. That's discouraging for the teller.
This is not the scenario bankers want to encourage. Banks have access to all the information they need to adequately profile customers for their products and feed the results of this analysis directly to their front line people.
If the CSR knows a consumer has a high propensity to buy, they are more likely to present the offers on their screen. Ranking those offers lets the teller to move to another product if the first attempt doesn’t peak the customer’s interest.
If the feedback indicates a low propensity to buy, the best customer service action is to inquire if they need anything else, let them know their business is valued and allow them to get on with their day.
Focusing sales energy only on those customers who are in the market for a product, is a new dimension to cross-sell that makes sense to bankers and arms their CSRs with the ability to close more sales. As a result, tellers are motivated to keep presenting offers because they will be less likely to be rejected.
Finding The Right Fit
Knowing the customer has a high propensity to accept a product is good, but it is also important to know if their customer is credit driven or a deposit generator. The cross-sell dialogue must focus on what is important to individual customers.
Loan approval screens that include customer centric information make it much easier to sell bonus rate CDs to depositors, variable rate loans to creditors and drive investors to visit a wealth advisor in the bank.
While the cross-sell impact of utilizing credit reports and internal data to better understand customers’ needs is huge, there is also an opportunity to prevent attrition.
The data may show that a loan is winding down or the customer is closing accounts. This provides an opening to give them a better rate or get them into another product. This is an entirely different conversation, but if it is scripted in the right way the CSR will feel confident in their delivery and possibly keep good customers from leaving the bank.
The information banks receive from their scoring models helps them retain and grow relationships and become more profitable, if they have the capacity to utilize it in the most effective way.
When CSRs know the right questions to ask and have comprehensive customer preference profiles at their fingertips they can become more effective needs-based sellers. The importance of knowing which customers are in the market at any given time when they come into a branch or call center, is an important part of better branch selling. Filtering out the no’s, makes it much easier to get to yes.
Written by Eric Lindeen, director of marketing at Zoot Enterprises, with contributions from Andy Callen, managing director and founder at Insight Marketing Inc.