Banking Up-Sell and Cross-Sell Strategies that Work

Banker Resource
August 15, 2012 — 2,886 views  
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Every customer relationship is an opportunity to cross-sell other products and services as the relationship grows. Customers also benefit from earning interest on their savings and by having one service provider for all of their financial needs. Here are some examples of cross-selling strategies and options that help banks earn more.

Savings Accounts and CDs

When talking with customers who only have a checking account, invite them to add a savings account, which can be extended to include money market accounts or certificates of deposit (CDs) if they have enough cash. Banks offer a nominal interest rate in these accounts on cash that customers don’t plan to use in the near future. They run the risk of customers withdrawing their savings, but in the case of CDs, customers are locked in for longer terms and are charged penalties for early withdrawals.


Premium Accounts

If customers want to avoid monthly fees on basic checking accounts, consider up-selling them to a premium account. These usually require customers to do more business with the bank, such as holding more assets in savings or investment accounts or taking out a mortgage.


Credit Cards

Offer credit cards to credit-worthy customers. Even with low prime interest rates, banks are earning higher rates from customers than they can get on investments. Banks pocket the difference between the costs of providing funds versus what customers pay in interest. They also benefit from any annual dues, overdraft charges, or late fees.


Investment Management

Invite customers to consolidate their investment accounts at your bank. Most banks offer their own branded mutual funds or wealth management services, and they earn management fees on the money customers have invested with them. Since the primary purpose of those investments is to build a long-term portfolio, banks benefit from many years of fees customers pay for asset management.


Mortgages and Personal Loans

Suggest mortgages, lines of credit and personal or business loans to strengthen the customer relationship. Long-term loans such as these help the banks plan their cash flow better so that they can continue to meet customers’ short-term demands.

Cross-selling services should strengthen the customer relationship and put the bank at the top of customers’ minds. Banks earn more when they have dependable cash that they can use to invest elsewhere at higher rates. They also benefit from fixed sources of income from investment management fees and repayments on loans and mortgages.

Banker Resource