Improving Cross-Sell Opportunities.

• Author: Caplan, Jeffrey
• Position: Brief Article

Retail bankers have known for some time that, generally, the more products and services a customer has with a bank, the more profitable he or she is. Expanded product and service usage not only drives immediate profit but increases switching costs, effectively extending the customer's tenure with the bank. The question that bank marketers struggle with, however, is how to successfully drive this product and service expansion.

Current information suggests that the success of cross-sell marketing efforts depends primarily on message timing and also, to a large extent, on the relevance of the message and the communication channel used to deliver it. It is thus critical that the cross-sell message for each customer be delivered with appropriate timing. However, doing this with a customer base that is often measured in the millions of unique customers is not a trivial undertaking.

Fortunately bank marketers have an emerging range of software solutions that help to time as well as to focus marketing messages and offers. One such emerging class of solutions is based on tracking and leveraging individual customer behavior to drive marketing dialogs with each customer.

Customers signal needs through their behavior

Behavior-driven marketing solutions are designed to drive targeted offers based on the recognition of changes in individual customer behavior. These types of solutions can be used very effectively in focused cross-sell initiatives.

With behavior-driven marketing, bank marketers constantly track relevant customer behaviors, such as deposit and withdrawal size and frequency, direct deposit, online banking, and debit card usage, among others. The solution establishes normal patterns of behavior for each customer and detects customer activities that signal a need or interest in additional products or services. With this monitoring in place, it is straightforward to drive targeted alerts or messages to customers via sales or call center personnel or push them directly to customers via e-mail, mail, or ATM networks--at the moment the customer's behavior shows an emerging need or interest. While behavior-driven marketing is a new approach, experience shows that it can deliver excellent results.

Recently managers at one of the nation's five largest retail banks determined that they needed to address their margins...