Downloaded 23 times
More Related Content
Thesis presentation
- 1. Cross-selling in theBanking Industry BY: GILLYAN GOWARTY MAY 6, 2017
- 2. Introduction What iscross-selling? Cross-selling strategies Wells Fargo Consumer behavior Technology Opportunities/Advantages Challenges Recommendations
- 3. Cross-selling What iscross-selling? The selling of multiple products and services to existing customers How does it apply to the banking industry? Cross-selling is a core banking sales function A key element of cross-selling is establishing strong customer relationships
- 4. Strategies Cross-selling requiresthat bank personnel establish strong relationships with their customers. Bankers need to understand what their customers need, along with having a strong knowledge of what products and services they have to offer. Utilize a database Match the customer to the product Ask questions Present the questions in a natural dialogue
- 5. Strategies cont’d Theeasiest sales that can be made to existing customers are products and services that can help them to better utilize an account they already own These sales can include a debit card, online banking, direct deposit, bill pay, automatic savings transfer, personal line of credit It is important to stay connected with customers after that initial sale Send follow-up emails, make phone calls, send cards
- 6. Strategies Cont’d Itis important to continually evaluate cross-selling opportunities Customer focused software Send out personalized communication Make sure employees are properly trained Remember that customers like to be rewarded for their loyalty
- 7. Wells Fargo Sept2016- Wells Fargo was fined 185 million for unethical sales practices Fired 5,300 employees Employees had unrealistic sales goals Received threats from management Accounts were opened without customer authorization
- 8. Wells Fargo Cont’d Wells Fargo was always well-known for its effective cross-selling strategies In the first quarter of 2015, Wells Fargo reported that its retail banking customers had an average of 6.13 products per household Cross-selling became a focus for Wells Fargo during the 1990s Going for Gr-eight
- 9. Wells Fargo Cont’d Sandbagging Bundling Pinning
- 10. Consumer Behavior Consumerstend to utilize more than one financial institution Married couples have five or six bank accounts, sometimes spread over several financial institutions Joint or individual FDIC limits Some accounts are goal specific Christmas clubs, Vacation funds Keeping track of several different accounts can be challenging A downside of maintaining multiple accounts is the fees that can be involved
- 11. Bank incentives forCustomers When it comes to choosing a financial institution, consumers have many options Banks are using incentives to attract new customers, retain existing customers, and to get their customers to use more services Many banks offer cash bonuses for new accounts, as long as certain criteria are met Average balance, qualifying direct deposit, number of purchases with a debit card Average bonus between 150 and 300
- 12. Technology The bankingindustry is forced to adapt to advancing technology Branches are adapting/disappearing Changing the way bankers interact with customers JP Morgan said that tellers only handled 42% of banking transactions. This has drastically decreased since 2007, when 90% of all banking transactions were conducted by tellers Teller jobs/titles are changing These jobs now involve responsibilities such as handling transactions, assisting customers with online transactions, offering advice on various products, and assisting customers with ATMs
- 13. Technology Cont’d Branchtraffic is plummeting Customers can now perform routine transactions on their phones Not limited to banking hours Branches will soon look like airport check-in kiosks Self-service kiosks, iPads, 24-hour teleconferencing JPMorgan, Chase, PNC Bank, Bank of America, and KeyBank are testing self-service kiosks, self-service drive-thru lanes, and 24-hour ATMs which will feature the ability to chat with a teller
- 14. Technology Cont’d Onlinebanking Open checking/savings accounts Apply for loans/credit cards Mobile banking Deposit checks Check balances Transfer funds ATMs Withdraw/deposit money Transfer funds
- 15. Technology Cont’d Reducedneed for paper E-statements Ability to email receipts Eliminating deposit tickets Instant issue debit cards Paperless accounts
- 16. Opportunities/Advantages Reduces customeracquisition costs, servicing, marketing and communication costs It is well understood and key finding that greater the number of products held by customer leads to an increased probability of retention Although technology can place challenges on cross-selling within the branch environment, it is not an overall detriment to the process Can be used to enhance the process
- 17. Opportunities/Advantages Cont’d Threereasons why cross-selling is easier to do online rather than in the branch environment 1. Computers can analyze accounts for cross-selling opportunities faster than people can 2. Customer interactions within the branch can be threatened by time pressure and lines of waiting customers 3. Face-to-face selling can become uncomfortable for both the branch employees and for the customers
- 18. Opportunities/Advantages Cont’d Frequencyof the interaction Not limited to branch hours On average, they check their accounts seven to ten times per month, while the average person visits a branch just once per month “Online cross-selling lacks of human touch and the difficulty of gauging customer reaction to offers. He ultimately believes that online offers more advantages than not for cross-selling, even if an online application cannot interpret customer behavior. There are, after all, no robots in banking”
- 19. Challenges Getting customersto sit through a sales pitch, and sign up for a new product or service, is a difficult task It becomes even more difficult when bankers are not properly trained on the product catalog that the bank has to offer, or not properly trained on how to suggest the right product to the right customer Management may have limited time to offer this training It’s important to have the correct approach and to tailor a sales pitch to what the customer needs, instead of what the bankers want to sell to them.
- 20. Challenges Technology Can’thave necessary conversations Customers can open accounts on their own When they do so, tellers don’t get credit for the sales
- 21. Recommendations Find away to make online sales count for individual tellers Restructure sales goals so there are realistic expectations of what is being done in the branch Utilize technology so efforts aren’t being wasted by trying to sell products to customers who are already using them