Encouraging lenders to cross-sell: lenders can sell added products and service--thus enhancing bank revenue--by employing three simple strategies when processing applicants.

• Author: Guy, Allen

BANK EXECUTIVES HAVE LONG STRUGGLED with the notion of transforming lenders into well-rounded bankers who consistently cross-sell other financial products and services to their customers.

Loans are the backbone of any financial institution and will always be the driving force behind profitability. But given the talent and resources many banks have, shouldn't the opportunities to enhance revenue through cross-selling loan customers be employed to maximize shareholder value?

Almost all financial institutions have the quality individuals and products through which customers can receive great benefits and provide the bank increased earnings. Lenders often don't realize the cross-selling powers they possess and too often miss opportunities to enhance revenue. Below are three ways that lenders can use their key powers to transform themselves into full-fledged bankers.

1. Use the power of the "check in hand."

   Every lender knows how difficult it is to contact a customer when a loan is past due, a checking account is overdrawn or updated financials are needed. On the other hand, when a customer is in need of funding for new capital equipment, a working capital line of credit or a short-term loan to fund annual bonuses, he or she is eager to provide all that's requested from his or her lender.

   It's at that moment the lender has the opportunity to become a banker and increase the profitability of the lending relationship.

   Too often lenders close the loan, hand the check to the client and leave revenue on the table simply because of fear of losing a loan deal. Their approach to cross-selling additional products and services such as wealth management, retirement services, treasury management, insurance and other products is to follow up with the customer after the loan is made. The flaw in this approach is that the customer has what he or she perceives is needed and at this point is less likely to be receptive to other opportunities.

   The order in which a lender presents product and service offers will control the amount of cross-selling that he or she is able to achieve. As long as the lender possesses the funds that the client needs, the client will listen until he or she gets the desired money. Therefore, the client is more apt to listen to advice with respect to the benefits of additional products offered before the lender hands over the check. The time to cross-sell is before the check changes hands and the client no longer needs the lender.

   In my...