If you’re a bank marketer, what can you do to improve your cross-selling success? The answer, although easier said than done, is still ignored by most firms: Engage your customers before cross-selling them.
On the Verity Credit Union blog, Joe wrote (with some editing on my part):
One of my job responsibilities is to make service calls to members who have recently opened an account. The first call usually happens about 2 weeks after the account is opened. After having reviewed their accounts, I offer the member other products or services that may fit their needs. This call is always well received. The member realizes that we are following up on the new account and they’re appreciative that we want to make sure they’ve received their checks or debit card.
A second call is placed about a month later, without the guise of a check up, to offer other products. Again, having reviewed their accounts, I determine the products that are advantageous for them and explain how they can profit from them. While these calls are solicitations, and beneficial for the credit union, we have the member’s best interest at heart.
These second calls aren’t as well received, and sometimes people are stand-offish, especially those who don’t understand our cooperative nature.”
Before I describe what’s wrong with both the assumptions and actions described above, let me just say that I’m not criticizing Verity specifically. I think it’s commendable of both Joe and Verity to even post this in the first place (would this have passed the “brand voice” edits at Wells Fargo, Ed?). I’m citing this example because I believe it’s representative of what goes on in many banks and credit unions.
So what’s wrong with Verity’s approach?
1) It doesn’t know “the products advantageous for them.” Few consumers have all, let alone a majority of their financial products with one provider. So, in trying to determine what products to offer, a financial provider is at a serious disadvantage — it doesn’t have a complete picture of what any one customer owns and doesn’t own. YOU might think a credit card is “advantageous” for someone, but what you don’t know is that she already has five cards — and resents you calling to sell her something she doesn’t “need.”
2) The timing is all wrong. Yes, I’ve seen the BAI study that says 95% (or whatever) of all additional products are cross-sold in the first six months after a new account is opened. But nobody ever asks why that’s the case. I’ll tell you — because that’s the window in which the customer is still in the honeymoon period, and their bank (or credit union) hasn’t done enough to piss them off yet. But the reality of the matter is that it’s incredibly unlikely that someone’s financial situation has changed that much one month after opening a particular account (which is when Verity is making its second call). If you were to call me a month after I opened an account and tried to pitch another, I’d ask you why your firm was so incompetent as to NOT tell me about this a month ago.
Successfully cross-selling products requires a relationship. And relationships do NOT get built overnight. Not in the real world (our personal lives), and not in the business world. Relationships require trust, and it takes time to build trust with customers.
And, as I’ve written about before, that means different things to different people. For us Crankys it means: Don’t Screw Up. For other consumers, trust is built by providing objective advice and guidance. And for some, it means have friendly, helpful people to talk to and interact with.
So when is the right time to cross-sell? After one of two things happen:
1) You’ve sufficiently engaged a customer. Don’t listen to the advertising folks when they blather about “customer engagement”. Engagement isn’t about how long you watch a commercial. It’s about the level of emotional connection a customer has with you — and that connection can be measured by the types of interactions and transactions he or she conducts with you. When a customer starts moving up the emotional scale of transactions from simply checking balances to asking for help on making financial decisions, you’re getting closer to the point when you can cross-sell.
2) A customer has a successful high-emotion interaction. I’m sure you have at least one friend who you originally bonded with because of some memorable shared experience. (I can think of a few, and if you buy a few drinks someday, maybe I’d share those stories with you). It’s the same with a business relationship. Helping customers through stressful situations creates bonds. [Screwing up these situations works in the opposite direction]
Not only are these criteria for determining when to cross-sell, they’re indicators of a growing relationship. Which implies that trust is building, and in turn, implies that a customer is willing to share more information with you — information about their financial lives, needs, etc. Which helps you make smarter decisions about what products really are “advantageous” for them.
Despite the sincere belief of many credit unions that they “have the member’s best interest at heart”, they still have to prove it. And that proof comes from first building trust and a relationship.