The Benefits of Multi-Channel Cross-selling
and Retention Leveraging Real-time Analytics
While financial services marketers often debate the effectiveness of specific cross-selling tactics, such as direct mail or email, there are some strategic goals that our banking clients consistently agree on. Specifically, that they must do a better job of managing relevant communications through the customer’s evolving and preferred banking channel(s) whether the customer is in-store, on the phone, or on their mobile device. Another consistently agreed upon goal is to focus on retaining profitable customers because, as most banks know, it’s more cost-effective to retain a profitable customer than to acquire a new one. Recently, one of our clients made these goals the primary focus of their customer analytics, cross-selling and retention efforts. Here’s what happened.
Last spring, we started working with a mid-tier regional retail banking firm. This financial institution recognized an opportunity to provide real-time predictive marketing information through its existing branch and credit decisioning platform in order to provide personal bankers and call center/web CSRs with on-the-spot, relevant cross-sell and retention information. The goal was simple: rather than general sales profiling tactics or basic customer service, offer the customer targeted special offers and products based on their total financial profile, future needs, or attrition risk indicators. The idea was to focus the bankers’ sales efforts on the top 50% of customers who actually have financial buying needs, while at the same time, migrate away from the one-size-fits-all or product-of-the-month method of traditional retail banking sales management. So, how’d they do it?
They started with our Customer Opportunity Analysis which rank-ordered all of their customers using predictive models based on specific next likely product purchase and attrition risk metrics. What they learned was that in any given day, week or month, only as much as half of their customers might have a current need. In other words, if they reduced their sales resources by concentrating on only the strongest opportunities, and redirected that time and money into improved sales processes, they could increase cross-selling results by as much as 300%. They also learned that leveraging the real-time interaction with the customer drives dramatic increases in sales productivity. Early results are showing a three-fold increase in branch and call center cross-sales of consumer lending products (including credit cards, mortgages, home equity loans, auto loans and other installment loans). Their next step is to take their real-time predictive marketing scoring and targeted sales process to their website and mobile banking platforms, where they will present customized, targeted offers based on each customer’s unique needs. Additionally, they plan to add deposit cross-sell and retention tactics for Checking, CD, Money Market and Investments. By expanding to deposit products, the bank will have even more product flexibility for determining the ideal cross-sell offer.
What would it mean to your institution if you could increase multi-channel cross-sales by 300%? And what if you could accomplish that without changing your current platform or database infrastructure? Leave a comment and let me know what you think.
For more detailed information on how this bank increased sales effectiveness by reducing and redirecting sales budgets using real-time predictive marketing and attrition scores, please contact me at firstname.lastname@example.org, or Zoot at www.zootweb.com .