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When many financial institutions are experiencing higher volumes of deposits through their personal banking account offerings, marketing priorities can often shift toward other sources of revenue, such as mortgage refinancing or commercial lending. Cross-selling can be a beneficial component of an overarching strategy toward these initiatives, while also helping improve deposit account retention at the same time. It may not naturally be the first method that comes to mind for every bank, so this article will help explain what exactly cross-selling is, what it means for financial institutions, and how marketing teams can integrate it into their plan for steadily improving revenue.
Customers who utilize one of your banking products can often find additional products from your financial institution to be useful to them as well. This is where cross-selling comes into play – educating your bank’s customers on your other product offerings that would be relevant to them or that complement what they currently have. An example of this could include identifying customers who currently only have checking or savings accounts. These customers may find interest in other ways they can save their money and diversify their finances. Introducing these individuals to your bank’s local financial advisor could help grow your wealth management portfolio while providing your customer with a helpful and relevant service that they may have been unaware of previously. Continuous communication with your customers through cross-selling is important for staying top of mind with them. If they begin considering new financial services that they may need down the line, your brand should be the first to cross their mind — as long as they are aware that your bank is an option that offers the solution they are looking for.
While expanding existing partnerships would include the most direct impact of increasing wallet share, there are additional benefits that may not be as apparent in comparison.
One of these benefits would be lower cost per acquisition. When looking at metrics for acquiring new customers vs. selling to those with existing banking relationships, the success rate of selling to an existing customer ranges between 60-70%, compared to new customer acquisition success typically ranging from 5-20%.
This differential can be attributed to a handful of factors. For one, a current banking customer would be more likely to read correspondence from their own bank, such as an automated email that provides information about mortgage lending offerings. Beyond that first step of opening an email, current customers would likely be individuals with which your bank has already built up a level of trust. With that in mind, the amount of outreach and frequency of impressions that would be required for a current customer to begin a conversation about an additional banking or lending product would be noticeably less than the number of clicks and impressions that tend to be necessary during the new customer acquisition process.
This benefit of cross-selling is especially relevant for local banks and financial institutions that may not have as large of a digital marketing budget compared to larger nationwide brands. It can be difficult to compete for new customers in the digital space, which can lead to overspending when looking to acquire new customers and have your voice heard. When cross-selling, you can tailor your targeting to be specific to those who already work with you and know your brand. However, for those looking to make the most of their pay-per-click budget in order to compete with larger institutions, you can reference our guide to efficient Google Ads spending.
On top of that, cross-selling also helps improve brand loyalty. As customers begin to adopt more products that your bank offers, they begin to understand and rely on the help and expertise your financial institution provides. Offering more ways for customers to grow their finances while expanding on a relationship they are already comfortable with helps to provide them with peace of mind regarding their financial stability. This all leads to what many refer to as increasing “stickiness” of existing banking customers. When people are aware of their current bank’s additional offerings, it helps them understand that they do not have to look elsewhere for financial services with an outside partner, especially considering they may not feel comfortable getting started with a new bank they are not as familiar with. So, while cross-selling is a great way for your financial institution to increase revenue, it also simultaneously helps with customer retention.
Cross-selling does not need to be as heavy-handed as it may sound. In this section, we will cover potential channels that you can utilize for your cross-selling strategy, along with examples. Ultimately, the mentality that helps make your cross-selling efforts come naturally is keeping in mind the bigger purpose of your financial institution. Your marketing plan and cross-selling initiatives will be the most effective when your message communicates how your bank is meant to serve your customers and help them achieve their financial goals. For example, communicating that your customers have a reliable partner that can prepare them for retirement by helping them invest their money intelligently would be a one way of cross-selling your wealth management services while focusing on aiding your customer base with achieving their goals.
There are many ways your financial institution can go about cross-selling, so we will focus on some of the options you have through digital marketing.
After understanding how cross-selling can be relevant to your financial institution and your customers, it is important to make sure you are prepared before getting started. Cross-selling will be the most effective when it is measurable, so setting up tracking is essential to keep an eye on how customers interact with and respond to your new digital ads. If you’re looking for help getting started on this front, you can refer to our article that includes 5 Steps to Begin Tracking Conversions on Your Bank Website.
If you are excited to incorporate cross-selling into your digital marketing strategy but don’t quite know where to start, BankBound’s team of digital marketing specialists are always happy to speak with other financial marketers like you to help set up and execute a plan. Don’t hesitate to contact us with your questions!
