Banks and Credit Unions Must Improve Cross-Sell Efforts

Despite the fact that banks and credit unions have talked about the importance of cross-selling for decades, few institutions have a disciplined process to take advantage of cross-selling opportunities that can grow operating revenue from existing customers. For those organizations that do have a process in place, studies show that many are not targeting the offers to reflect insights readily available, thereby annoying some of the best customers.

Subscribe TodayOutside of an improved interest rate spread (which is unlikely in the foreseeable future), banks can only create revenue by adding new customers or by deepening existing relationships. At a time when competition for new customers has never been greater from both traditional and non-traditional players, the only sustainable opportunity is to sell more to the customers a bank or credit union already has.

While the findings differ a bit by study, research shows that U.S. adults own between 8-12 financial products each, with ownership of services increasing with age (until age 54), by channel (online users have more products) and by type or institution (credit unions and smaller banks do better cross-selling).

“While the number of products held by a typical household hovers around 10, most customers only hold 2-3 services at any one institution.”

While the number of products held by a typical household hovers around 10, most customers only hold 2-3 services at any one institution. Only the very best organizations sell more than four services to any one customer (not including ‘go with’ services such as debit cards). How can banks improve their penetration within their current customer base?

Sources of Sales

According to the Gallup U.S. Retail Banking Survey, which asked 9,000 financial service customers how they engage with their bank when they purchase a product or service, one in every five customers opened a new account or signed up for a new service from their bank in the last six months. The vast majority of these sales (59%) came from customer already planning to open an account or buy a new service (the bank did not need to do any marketing to these customers since they were going to take this action without any selling).

The rest of the potential customers include 1) those who were considering opening an account but needed additional prompting (33%), and 2) those who were not considering opening an account, but did so with some prompting (8%).


What is important about the 33% of customers who are considering buying a product, but hesitate until they receive something from the bank or are talked to, is that the bank that ‘wins’ is usually the bank that understands the timing of the decision, has the best relationship and knows the offer that will best resonate with the potential buyer.

Not to be ignored are the 13% of the customers who Gallup found at one time considered buying an additional product or service at the bank, but opted not to do so. These are lost opportunities as well.

Gallup also found that customers who are ‘fully engaged’ with a financial institution are much more likely to buy an additional product from the bank or credit union than those who are just ‘satisfied’. This makes sense when you consider that a customer could be very satisfied with a financial institution that they have an account with but don’t do much with the account (mortgage only customers, CD customers without checking accounts, etc.).

For example, while less than 45% of ‘satisfied’ households surveyed by Gallup said they would consider their bank or credit union the next time they needed a product or service, that consideration increased to 83% among customers who were both satisfied and ‘engaged’. In fact, customers who are engaged said they were more likely to open a new account, add ancillary products and services and/or obtain planning advice than those customers who are just satisfied.


The Buying Process

As has been discussed in several other research studies in the past couple years, banking and credit union customers do a significant amount of research before purchasing a product or service. In the Gallup research, it was found that more than half of the customers considering buying a new product seek out information prior to the time of purchase. In fact, the research found that customers who looked for information had a 17% lift in eventual sales conversion rates.

The key for financial institutions is to identify the most influential information sources for converting the ‘pondering’ customer to being a ‘sold’ customer. Not surprisingly, the Gallup research found that social media was the most effective channel used by customers that lead to a sales conversion. What may be a surprise to many is that written material (direct mail and email) was the second most effective selling tool for banks and credit unions.


Interestingly, the channels with the highest cost to the bank (speaking to someone in the branch or a customer service representative over the phone) provided a relatively smaller lift in sales conversion even though they are primary sources of information for potential customers.

The requirement for banks and credit unions to manage multiple communication channels to effectively and efficiently move potential customers through the sales funnel is a difficult challenge. Gallup believes financial marketers should ask themselves the following questions as they allocate resources.

  • Do we know where our customers, specifically, are looking for information prior to purchasing?
  • Are we delivering a consistent message across sales information channels?
  • How do we balance our resources between those channels that are high impact in conversion but low in usage (i.e. social media) vs. those that are high in usage but have lower impact in conversation (i.e. spoke to someone in a branch)?
  • Do we know what our customers value in a bank and are we delivering on the message at every touch point?
  • Do we know what actions we need to take to increase conversion rates in each channel?

Improving The Cross-Sell Process

“66% of ‘fully engaged’ customers felt the offers they receive are ‘general’ in nature, 41% found the offer annoying, and stunningly, 53% of customers already had the product being promoted.”

While what qualifies as a ‘cross-sell’ may differ between financial organizations, the cross-sell ratio is still the number of products and services sold divided by the number of customers (or households). The key to boosting the ratio is to accelerate the rate and effectiveness of sales conversations. These topics have been covered extensively by The Financial Brand in the past but Gallup provides some great insights into how to improve cross-selling effectiveness.

1. Define and measure cross-selling: As mentioned above, there are many ways to define products or customers as it relates to cross-selling. Since there are no industry standards, it is difficult to compare different institutions. It is not difficult to set a definition for your bank, however. The primary decisions are whether to include ‘go with’ services within the product category (debit card, online banking, mobile banking, bill pay, direct deposit, etc) and whether a cross-sell ratio includes only retail banking products and customers/households or small business, investment services and commercial customers/products as well. The key is to keep the measurement within your organization consistent and meaningful.

2. Analyze the drivers of cross-selling: How is your organization’s cross-selling ratio trending over time? What is impacting your cross-selling trend? Your trend is most likely impacted by the following:

  • New customer acquisition: As new customers are acquired, the cross-sell ratio decreases if your team is not cross-selling new customers at or above the current cross-sell rate.
  • New customer cross-selling: There is no more important time to cross-sell than during the onboarding process. If your institution does not have a multichannel, onboarding process with multiple ‘touches’, new customer acquisition is probably negatively impacting your cross-selling ratio.
  • Existing customer attrition: Attrition of established relationships due to moves, etc. can negatively impact your cross-sell ratio if the relationship is not replaced with a similarly strong engagement. On the other hand, the culling of low engagement, single service relationships can dramatically improve your cross-sell ratio.
  • Existing customer cross-selling: Building a proactive, targeted and consistent cross-selling strategy can improve your cross-sell ratio over time and set the stage for improved revenues and lower attrition (customers with more services are less likely to attrite).

3. Build the cross-sell message into your vision and values: Cross-selling requires more than lip service. To be effective, senior management must embrace and continuously communicate to importance of cross-selling to both the bank and the customer. It should be published, posted, presented and reinforced continuously both within the bank and to the general public. Wells Fargo has made cross-selling part of their internal mission statement and vision for more than a decade. It is posted for their employees and is made public on their web site and presented as part of every investor meeting.

4. Provide metrics for employees to measure performance: Building an employee measurement and performance component to your cross-sell process is imperative to success since employee engagement is required for cross-selling to be effective. Setting standards for employees on a customer level will improve cross-selling and ultimately increase revenues.

5. Identify and share branch level best practices: When measurement is done on a branch and regional level, causes of variations begin to become clear. While some of the variations are out of a branch’s control (market differences, branch location, etc.), other variations are caused by controllable factors such as leadership, employee engagement, training, etc. It is important to find ‘success stories’ and share them across the organization to improve results across the board.

6. Improve the cross-sell communication process: As can be expected, the effectiveness of any cross-sell process depends on the quality of customer communication through every channel. This obviously includes improving the employee-customer engagement but also includes every marketing engagement with the customer through all channels.Unfortunately, according to the Gallup study, financial marketers could definitely improve cross-sell communications with current customers. Sixty-six percent of ‘fully engaged’ customers felt the offers they receive are ‘general’ in nature, 41% found the offer annoying, and stunningly, 53% of customers already had the product being promoted. Of significant concern is that the most engaged customers (the ones most likely to buy) felt they were targeted worse than those who were less engaged.
Poor_targeting_continues_to_plague_cross-selling_effortsGallup suggested several keys to making your cross-sell marketing program more effective:

  • Identify the most engaged customers (accounts held, transactions made, etc.) and review the products already held with your institution
  • Model the best relationships as the foundation for building similar relationships with less engaged households
  • Make product recommendations based on event-triggers, account ownership trends, market changes, etc. Increase insight gathering from customers to improve this process.
  • Make sure marketing offers are customized based on the customer relationship regardless of channel being used for marketing (provide flexibility to employees and personalize all marketing communication).
  • Leverage analytics on previous behaviors on the customer/household level to improve targeting, timing and offer selection.

7. Implement a short-cycle sales management process: Promote an environment that cultivates immediacy, focus and continuous improvement through daily huddles, short term result monitoring (weekly as opposed to quarterly). Breaking down major initiatives into ‘bite sized’ portions makes the accomplishment of major goals palatable on the individual level and promotes team engagement. Both actions and outcomes should be broken down in this manner. Commitments from individuals and teams are easier to measure as well.

8. Recognize and reward: Simplicity and frequency are the key. Most financial institutions over-complicate recognition and incentives, diluting the potential impact of the program. All activities and behaviors that drive cross-selling should be recognized and rewarded. Money may not be the only reward either. Sometimes recognition can be just as impactful, especially for shorter term accomplishments.

Improving cross-selling is difficult to do and even more difficult to maintain over time. Since returns on investment are sometimes slower and more incremental than major product promotions, financial institutions often place cross-sell initiatives further back on the burner or give these initiatives less attention. This has been seen with onboarding and event-trigger programs that represent ‘easy money’ once implemented.

All marketing channels need to focus on selling current customers the right product, at the right time, through the right channel leveraging the insight you have on each individual customer.

Jim MarousJim Marous is co-publisher of The Financial Brand and publisher of the Digital Banking Report, a subscription-based publication that provides deep insights into the digitization of banking, with over 150 reports in the digital archive available to subscribers. You can follow Jim on Twitter and LinkedIn, or visit his professional website.

This article was originally published on December 30, 2014. All content © 2018 by The Financial Brand and may not be reproduced by any means without permission.


  1. I totally agree with Jim. Banks and credit unions must improve their cross sell efforts! The great thing about cross-selling is that you can begin simply without having big data or any advanced predictive models. You can also have success without a marketing database or a modern CRM system. You simply need to be able to make use and take advantage of the data stored in your core operating system. If you are not currently taking advantage of cross-selling, start with simple easy wins. My favorite easy win for cross-selling is increasing E-statement penetration. Why? It’s simple and it reduces expenses. The expense reduction goes straight to improving the bottom line. Other easy wins are improving debit card penetration and debit card usage. Hopefully these are two items that you are currently measuring. If not, simply determine how many active checking accounts do not have a debit card and how many debit card holders have not used their debit card in the last 30, 60 or 90 days. Contact these customers to get or use their debit card. This tactic is a simple way to improve noninterest income vis-à-vis interchange from debit card usage. Related to this tactic is increasing debit card usage of your existing active debit card base. This tactic is not as easy but it can be just as rewarding (Please Note: Some debit card vendors have programs and expertise to help banks and credit unions with these programs.).

    The research that Jim quoted mentioned the effectiveness of direct mail and email. Forget the research. I can tell you from experience, when done right, the combination of direct mail and email can easily generate ROIs in the mid-hundreds. The key to success here is finding the appropriate segments to contact. If your bank or credit union has a robust profitability model, a well populated CRM system or marketing database and you have the money to purchase profit propensity models and product propensity models, you can take your cross-selling efforts to even higher heights. The banks and credit unions that are successful at cross-selling typically also have success in creating desirable products and services. Not all checking accounts are alike so make sure that your products and services that you are cross-selling are somewhat differentiated in your marketplace. Having better products and services will benefit your cross-selling success.

    Remember, increasing the cross-sell rate of the appropriate customer segments is a good thing. However, do not get lost in the metric. There are cross-selling tactics that are designed to improve revenue or decrease expenses and not the cross-sell rate. Do not forget about those.

    Good luck.

  2. Great insight as always, David. Your observation about the power combo of direct mail with email is spot on. Combined, the ROI is greater than either of these channels alone. If you want to achieve the ‘communication trifecta’, add mobile alerts or mobile ads to reinforce the direct mail and email messaging. The beauty is that you can use the same landing page for completing the sale. But organizations can’t make it easy to reach the customer and then make it difficult to open an account. Invest in the latest in mobile and online account opening capabilities to complete the sales process. Don’t make it difficult for the consumer to say ‘yes’.

  3. Deborah Kaz says:

    Great points gentlemen. I’d like to take it one step further for organizations that have already taken advantage of the low hanging fruit. FIs still have the challenge of disparate data silos and accessing that data. I’d like to suggest outsourcing cross-selling operations to a partner that is technologically savvy. Instead of struggling with pulling together all the data, find a partner that specializes in it. Why outsource? Simple. Convenience. Efficiencies. Value.

    Convenience. Partnering with a qualified outsourcer who can access that data and use analytics to match customer data to product data is a win-win for banks and customers alike. When a customer contacts the FI, the outsourcer can access all the information about that customer and provide the best product or service increasing their likelihood to purchase. It goes back to giving the gift of superior customer service: the right offer to the right person at the right time.

    Efficiencies: You can leverage operational best practices gained from years of experience when you decide to partner with an outsourcer. FIs can also avoid investing heavily in technology because the outsourcer is providing it along with the necessary operational efficiencies.

    Value: The value you gain by partnering with a business process outsourcer will drive customer loyalty, stickiness and share of wallet.

  4. Jim Marous Jim Marous says:

    Great additional thought Deb. Outsourcing is a great way to leverage external insights and resources for a quick and effective solution. Uncommon (and common) partnerships is a major theme for 2015 as noted in our Trends and Predictions article. Happy New Year!

  5. @Deb outsourcing is a good option for those banks who do not have the technical database marketing expertise or IT database expertise. A common failing of many companies who use data is thinking IT departments have database expertise. Data expertise is separate from IT infrastructure or networking expertise.

    The silo issue is strange to me. I spent ten years with the Jack Henry Silverlake system and all the various components work together so well that any marketing or IT employee with beginner database skills can combine the data from the various “silos” that make up the Silverlake system.

  6. Brian Siegel says:

    Great article, but one question about the Gallup information: they’re saying that “engaged” customers are more likely to bring additional business than simply “satisfied” customers, but what does engaged mean? Is it just a synonym for having a PFI relationship, or is there more to it than that?

  7. Jim Marous Jim Marous says:

    Great question Brian. Gallup doesn’t fully define the term ‘engaged’ in their research, but they do reference that engagement is achieved when a customer or member is using their account(s) regularly. This is also the way most larger banks define the term, but most will put a specific metric to the engagement. Some banks place the threshold at 3-5 transactions a month, while others place a threshold as low as 1-2 transactions a quarter. In reality, the definition is not as important as measuring the level consistently and finding a way to move engagement up over time.

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