What Is Cross-Selling?
Cross-Selling has become a buzz word these days. And the bank has been emphasizing on cross-selling in recent times. The importance of cross-selling is understood by all of us. This chapter is an attempt to explain the importance of cross-selling beginning with definitions and highlighting the importance. It also covers some broad definitions of Insurance and MFs to help service managers in developing an overarching view of a cross-selling business.
Let us begin with definitions.
Marketing is the process of identifying, anticipating and then meeting the needs and requirements of consumers in order to make a profit. In contrast, selling involves persuading customers that your products or services provide the benefits that they are looking for.
Selling - The last step in the chain of commerce where a buyer exchanges cash for a seller's good or service, or the activity of trying to bring this about.
Cross-Selling - sell (a different product or service) to an existing customer, invites customers to buy related or complementary items. Selling of banks products/services to an already existing customer—is the broad definition of what cross-sell means in the Banking parlance. It can be selling an existing account customer a credit card or selling an existing credit card customer a mortgage loan. Normally cross-selling in banks includes Mutual Funds, Life Insurance, General Insurance and other products like National Pension Scheme, etc;
Upselling is the practice of encouraging customers to purchase a comparable higher-end product than the one in question. Up-selling is a powerful skill, but only when your customer is getting more value. Not less. Cross-selling and Upselling are often used interchangeably; both offer distinct benefits and can be effective in tandem.
Down-selling is the art of narrowing a customer's expectations and matching them more effectively with a solution that best fulfills their needs or desires. In this instance, the salesperson is simply meeting their own agenda and getting the customer to pay for it. When you down-sell you build trust and demonstrate you are acting in your customers best interests.
Importance of Cross-selling and Up-selling in BankA bank that offers more than one product or service can promote to customers different products and services they deliver based on need (e.g. Insurance etc), behavior (Credit Card, etc) or demography (Pehla Kadam Pehli Udaan, etc). This type of cross-selling can be a highly effective tool for growing business, acquiring new to bank clients and enhance customer lifetime value by encouraging multiple product holdings by Individual customer. When you cross-sell, you offer the customer a product or service related to whatever they are already buying. It can be simple as promoting a credit card and internet banking to a savings or current account customer. Up-selling enables increasing the quantum placed on an existing product or additional products. Both methods of encouraging clients to use additional services and invest a little more can dramatically boost your Bank Business, grow revenue (Other Income) and help achieve set objectives (Risk Mitigation e.g. Loan Insurance). If you worry about irritating customers with too many sales calls, SMS, e-mailers (Customer Relationship Management efforts) to invest more or open a new account, don't. Surveys show that most customers appreciate being told about additional products or services that might better meet their needs or about new services that were not offered in the past which creates value in the present shows that the bank is in a way demonstrating that you are aware of their needs and care about their satisfaction and overall experience. But please remember "Be aware of the customers' needs".
How can you improve and create opportunities for cross-selling and up-selling in branches?
1. Stay relevant: Do not overload customers with too many unrelated cross-selling suggestions. Offering Pehla Kadam accounts to parents with kids below 15 is certainly a good fit. But if your attempts to cross-sell are not closely related to the original purchase/purpose, they are far less likely to succeed.
2. Share expert recommendations. One way to facilitate successful cross-selling and up-selling is to state-specific recommendations from professionals/experts of our bank. You may consider seeking the help of Wealth Management Professionals of the Bank in this regard.
3. Employee approach in cross-selling, up-selling techniques. The approach must be built around serving the customer and further solve the customer's problem, not just selling more products.
4. Timing is important. Cross-selling and up-selling can occur at different times, depending on the products and services you are offering. At times it may not materialize at that instant time, but may later revert.
5. Try product or service bundles. Bundling has long been used as a way to entice prospective or existing customers to buy not just a single product or service, but an entire group of items that go together
6. Use the customer relationship system effectively (Combination of Social CRM) integrated with your core banking system to identify changing customer behavior, needs and extract timely information in order to promote the required product or service to target groups. Please do not be late in responding. The CRM gives a 360° view of the customer -indicating the current products and services used what could be sold, purchase patterns, future potential, predicting what next.
7. Leverage the cross-selling potential of your branch/area. Position cross-sell and up-sell items throughout your site in places where they can help educate visitors on the depth and variety of what your business offers. Try mixing and matching different products and services to see what works best. But try — you must! The key to successful cross-selling and up-selling is to focus your efforts on meeting the customer's needs, rather than simply pushing more products and services. This is one area where you may need to do a little experimentation in order to find just the right balance, use of right business intelligence (environment scan of your branch) and CRM.