3 cross selling of banking products and financial services

CROSS SELLING
OF

BANKING PRODUCTS & FINANCIAL SERVICES
-by
Gazal Badlani
Ashok Sarkar
PGDM 2010-12
Trimester – 4


Introduction
• Selling of banks products/services to an already
existing customer
• Cross-selling stands for being able to offer to the
existing bank customers, some additional banking
products, with a view to expand banking
business, reduce the per customer cost of
operations and provide more satisfaction and
value to the customer and higher per customer
earning.


Scope of cross selling
• Liability side
• Asset side


Examples of cross selling
1. Credit insurance
2. Life insurance enhancements to traditional

mortgages
3. Auto and homeowners insurance
4. Medical savings accounts
5. Asset management accounts


Importance
• Research statistics demonstrate that the
average customer uses less than two services
from any one depository institution
• Seventy percent of all customers share their
banking needs with more than one financial
institution


Tools Enablement
Ways:
• Phone banking
• Web
• Walk in

Tools:
•
•
•
•

CRM techniques
Referral tracking
Sales call tracking

MIS systems (activity management, information)


7 - steps
Marketing facets


7 times expense
 Strong commitment to customer care at all levels
 Promises made must be realistic and achievable
 Intimate knowledge of the customer leads to excellent
customer service
 Continuous feed back from the customers


7 steps approach


Cross selling & Relationship Banking
•
•
•

•

The emphasis here is on viewing the customer as a long term business
relationship
Banks plan to meet the total banking requirement of the customers and
expect repeat business
Relationship is based on full knowledge about the customer needs and

causing total customer satisfaction by providing services that exceeds his
expectation
An understanding of exactly what the customer is buying in critical. The
basic utility he derives from the product is the nucleus of core in the
center, surrounded by services of both tangible and intangible attributes


7 steps model of relationship banking


7 step model approach


7 step model approach
1. On super - ordinate goal: Draw the vision and mission
2.
3.

statements around the customer value
Strategy - Draw a strategy of market segmentation to focus on a
customer
On structure - Restructure the organization as a cross functional and
process oriented one
System - Design a service delivery system on quality and coordination

4.
5. On skill - Cultivate skill as cutting edge
6. On style - Devise a suitable appraisal system and reinforce it through
top management

7. On staff - Devise policies which empower staff and encourage open
communication


7 steps model of personal selling


1.
2.
3.
4.
5.
6.
7.

Prospecting & qualifying
Pre-approach (deciding the best approach)
Approach (ability to observe and listen)
Presentation
Handling objections
Closing
After sales service and follow up


Bundling


Cross selling process

Buying cycle


NPTB modeling
The challenge of cross selling is to know
which product to sell to which customer


NPTB modeling
A next product to buy modeling promises to
enhance the effectiveness of cross selling by
specifying which product to sell to which
customer


NPTB approach
1.
2.
3.
4.

Compiling data
Selecting statistical method
Estimation and evaluation
Scoring and targeting approach


Benefits
1. Develop a true dialogue with each customer
2. Knowing the ins and outs of the product

offerings
3. Propose appropriate solutions
4. Capture data and share it across enterprise
5. Create incentives around effective cross
selling
6. Recognize all opportunities for cross selling


Bottom line & Implementation
The biggest difference between "merely
effective" and "high performing" cross-selling in
financial services is the degree to which the high
performers invest the time to really understand
customers' needs.


Problems
• The banker as a consultant
• Who owns the client
• Dislodging a satisfied client


Thank You