Cross Selling, Oct 16'10 - IBa
Cross Selling, Oct 16'10 - IBa
Cross Selling
M.Jehanzeb Saeed
Head , Business Development
HBL, Islamic Banking
Cross Selling- Defined
“the action or practice of selling
among or between established
clients, markets, traders, etc." or
"that of selling an additional
product or service to an existing
customer".
Cross Selling: Why it is needed Now?
A marked slowdown in household overall revenue
growth since the 2007
A corresponding shrinkage in projected banking
revenue growth
•Cost Reduction
According to Money magazine, it costs a bank five times less to cross sell an existing
client than to acquire a new one. Another finding says that it costs four times as much
to get a new customer as it does to keep an existing one. The underlying is the cost
advantage of selling to an existing client.
•More Profit /Customer
•Cross selling fosters brand loyalty.
Research studies have established that the percentage of loyalty increases with the
number of products the customer takes. The reasons may be for convenience, service,
price and value offerings by the bank for the total product solutions to the customer.
• Better Customer Relationship Management
Retail Banking Products-Birth to Retirement
•Wells Fargo-USA
•HDFC Bank –India
•BankIslami-Pakistan-TDR based
autos product
•NIB –Life Banking
•HBL-Pakistan- Cash against TDR
•SCB-Banassurance
Common problems
• Lack of CRM System and data mining tools
• A customer policy requiring the use of
multiple vendors.
• Different purchasing points within an account,
which reduce the ability to treat the customer
like a single account.
• The fear of the incumbent business unit that
their colleagues would botch their work at
the client, resulting with the loss of the
account for all units of the firm.
• Defective Website; customer touch points
Way Forward
Further reading
How to implement Cross Selling in a bank
Tools Enablement
Successful cross-selling requires that banks understand what their customers need
and that the bank keep track of their interaction via phone banking, web, walk in,
etc. Just making phone calls to sell loans or plastic cards that the customer does not
desire may often end up annoying him. Analysing the customer database and then
putting the right customer relationship management strategies in place is essential
to ensure that the cross-selling effort does not backfire. Customers also would not
like their data to be used by Banks to merely send them mailers of no interest to
them. They will, however, appreciate a bank that does not try to sell them the same
product again and again. It's also important to keep track of interactions across
channels. If the customer declines an offer at the call center, there's no point in
offering the same product when he or she visits the banks Web site. That would be
the equivalent of telling them that they are data and not an individual.
How to implement Cross Selling in a bank
Training, Incentives and People
Having tools and systems to cross sell does not end the process of selling. Getting the
employees involved in this exercise and motivating them to sell is an important aspect. It
is important for the Bank to provide rewards for the cross-sale or referral that are
commensurate with the profitability of the product or service to the bank. It also makes
sense to involve the staff in coming out with innovative campaigns and also ideas which
will stimulate them to sell newer products. As banking products tend to get very complex,
helping the employee understand the complexities of the product, rules and regulations
and compliance issues if any need to be educated. Help in identifying a prospect and
handing over the lead to a qualified lead for closure is also important. Constant coaching
in helping them to understand customer's needs, wants and goals along with dealing in an
emotive, emphatic and interactive manner is imperative. Linking cross sell to be a part of
an employee's performance appraisal along with non cash recognition and cash awards
are some of the initiatives taken for employee engagement.
How to implement Cross Selling in a bank