The Importance of Cross-Selling at a Bank
Do you work at a bank? Yes? If so, then you know the importance of making sales. Opening those accounts is how both you and the bank make money. Perhaps you get paid on commission or you get some sort of monthly or quarterly incentive for exceeding your quota, but whatever the case, you have to sell the bank's products in order to get ahead.
The secret to making your sales goal, of course, is cross-selling. Cross-selling is the act of selling a broad swath of bank products to a customer that only came in for one thing. Just because a customer says they only want a checking account doesn't mean that you only open a checking account. And no bank wants a banker that's a one-trick pony.
But what's the secret to cross-selling? How do you market these products to your customers? Especially the tough ones that claim that all they need is a checking account? It's your responsibility to overcome their objections and show your customers the importance of having a wide variety of products with your bank. While I can't give you a line-by-line script on what to say, if you stick to these points and develop your own way to deliver the pitch, you should find your cross-sell numbers skyrocketing in no time.
Back in the day, banks gave you a 10% interest rate and a toaster for opening an account (free kitchen appliances and they still complained about bank fees? That's the general public for you). With today's abysmally low rates, however, I don't use interest rates as a selling point for a savings or money market account.
Instead, I point out the extra layer of security they get by having most of their money in a savings account. Imagine if someone stole your debit card and tried to go on an illicit spending spree with your money. If all your money is in your checking account, the identity thief has free reign over your money until you catch on and close the card. But if your money is in a savings account, then it's safe from the thief as using the debit card at a store will only debit the checking account. We live in dangerous times where identity theft is becoming more and more prevalent, and every little bit of extra security helps. A savings account can go a long way in protecting your customer's money.
Not only that, but in most banks, a savings account can be linked to the checking account to provide overdraft protection services (more on that later). Your customer will be happy to know that there are ways to avoid those extra fees. Speaking of which, does your bank offer any special deals for opening a checking and savings account together? Many banks offer free savings accounts to students and seniors, or higher interest rates for having an active checking account. Does yours? Customers love free stuff, so getting them to open up a free savings account should be no problem. See what special deals your bank offers and pass that knowledge to your customer. Personally, I like to share that information during the initial pitch and bring up the overdraft services and extra layer of security if they seem doubtful or uninterested.
People today are squeamish when it comes to applying for credit cards. And it's easy to see why. High interest rates can lead people on a downward spiral than can lead to bankruptcy, and it happens to way too many people. Plus, many people are afraid of being the victims of credit card fraud and identity theft. So how do you pitch this product, something which so many people see as the financial equivalent of jumping off a bridge?
By pitching the positives, of course! Talk to your customers—especially the college aged ones—about the importance of having a credit card and using it to build credit. We live in a society that demands you have good credit in order to get not just a loan, but a car, rent an apartment, or even get a job! I don't understand that last one either, but that is the reality of our situation today. Good credit opens a lot of doors for us, and bad/no credit can serve as a big deadbolt lock. It's very important that good credit is built early in life, and a credit card is the perfect way to start doing that. And by all means, tell them how to use their credit cards! When I have a young customer that I'm pitching the card to, I make sure he/she knows to use it sparingly and conservatively. To use it only for emergencies or for small amounts. To not “go wild” with the card. Care about your customer, educate them, and teach them good financial habits. Not only will you get this sale, but future ones down the road.
For more experienced customers who have already built credit, talk about specific benefits of your credit card. Most credit cards offer rewards such as airline discounts or cash back just for making purchases with them. They also offer 0% for the first six to twelve months of being a cardholder, and/or no annual fee. Make your credit card stand out in the eyes of your customer. Highlight things such as “double rewards points on qualified purchases” or “5% cash back for the first six months”. It might be a bit more difficult if your credit card isn't particularly competitive compared to the rest, but selling is all about finding something positive about your product and making it the first and foremost thing on your customer's mind. If anything, frame the benefits your card does offer as a “current promotion”, or talk about the great customer service that it has. It may not offer the same rewards as the competition, but you can sell the convenience of having their credit card (and credit card servicing) at the same institution that they normally bank at, and quickly point out that the application process is only a minute!
Even if your credit card isn't as good as the competition, stand behind it in some way. If your customers see that you have confidence in the product, they will have confidence in it too.
The unthinkable. The unspeakable. The unimaginable. The horror of horrors. The overdraft.
Your customers don't like it when their checks bounce and they don't like being charged excessive fees for when their balance goes below zero. And whether it's their fault or not, they also seem to come in and bug you to refund all their fees, don't they? More likely than not, your bank has a product that both you and your customer will love, and your customer probably doesn't even know about it!
Most banks offer overdraft protection that will cover bounced checks and reduce or eliminate fees for going below a zero balance. Depending on your bank, your customer can have a separate line of credit dedicated to overdraft protection, or their savings account can be linked in order to provide these services (which you can use to pitch a savings account). It can offer your customer piece of mind knowing that the bank will cover their checks in case there isn't enough in their account, and can eliminate the hassle of overdraft fees. Your bank likely provides this service for free. Customer customer will be thrilled to have a way to avoid paying any more fees than necessary. Make that the focus of your sales pitch. It's a safety net that offers the piece of mind of knowing that the mortgage, rent, or tuition check they just wrote will be paid, and a way to avoid the hassle of hundreds of dollars worth of overdraft fees.
Home Equity Line of Credit
Why would your customer want a revolving credit line that uses their home as collateral, you ask? For many reasons!
Due to the fact that their homes are being used as collateral in case of default, the APR on a Home Equity Line of Credit (often abbreviated as HELOC) can hover around the 4% range, depending on your bank. Compare that to a credit card, which can have you paying roughly 25-30%. What a difference! A HELOC can be used as an alternative to the credit card, or for debt consolidation purposes (perhaps they are already in credit card debt). Most banks also allow your customer to use their HELOC as overdraft protection.
Most importantly, it can be used to protect their most valuable asset: their home. Much of the American Northeast was devastated by the effects of Hurricane Sandy in 2012. Insurance companies weren't footing the bills and neither was FEMA, leaving people on their own when it came to financing home repairs. People using savings accounts and credit cards to pay for the repairs quickly found their savings depleted and their credit card debt snowballing out of control. People with HELOCs, however, were able to borrow at low rates and had no problem rebuilding their homes. Teach your customer this and ensure they understand the importance of having a HELOC with your bank. A low rate alternative to a credit card that can function as overdraft protection and can be used to protect their home? What's not for the customer to love? And if the customer is jittery about borrowing a large amount, be sure to remind them that they only pay back what they actually spend from the line. It's a safety net for them in case of disaster.
You'll notice that I just stuck to HELOCs here, rather than loans in general. That's because in my experience, personal loans are usually something that the customer needs for a specific purpose, rather than something you can just propose to the customer. A person's not going to take a $15,000 loan just because you mentioned its low interest rates if they aren't planning to use it for anything. But every homeowner should have a HELOC as protection, so if you see a customer owns a home, make sure you steer the conversation in that direction.
Your most important weapon against the ever-present threat of the looming sales quota is product knowledge. It's only by knowing your products inside and out can you market a full banking bundle to someone who only wanted a checking account. By being familiar with them, your pitch will sound natural and you will be able to overcome most customer objections.
And remember, you aren't bothering the customer by selling more and more products to them. They aren't going to get enraged and complain to the manager (and if they do, then good because the manager will see you are doing your job). Remember that you aren't cold calling them at dinner time; they specifically came into the bank to begin a financial relationship, and they certainly want to get the most out of it. It's your duty, not just to yourself and the bank but to the customer as well, to educate them on all that the bank has to offer. You aren't simply an order-taker being told what they want; you are there to give expert advice on what they need. The customer will welcome that advice.
And finally, PRACTICE!