Customer Stickiness – Why Cross-Sell for a Bank means everything

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“Is Cross-Sell the answer? My customers open Savings Accounts and run away! How do I keep them with me and not lose them to my competitors?”

Banks are like expensive cars. A customer’s deposits, his fees and interest earned from loans are fuel to keep the car running. Of course, as you drive at insane speeds, fuel is burnt. Capital Adequacy, NPAs, capital and operating expenses, interest paid on deposits, all of these empty the tank. Quite soon, all your customers who kept fueling your tank, leave for other Banks. With more and more regulations coming in, it’s only getting tougher to drive out there.

Which is why Banks must get maximum out of their existing customers. We all know it costs 8 to 10 times more to get a new customer than to retain an existing one. Now, customers don’t really care about this. They are ever ready to jump ship and switch banks the moment they’ve heard of a new offer or found a better deal.

The Untold Human Truth

Here’s the thing – humans are inherently lazy. We almost always choose the path of least effort. If one could provide you many things in the same place, even if it’s a bit expensive, chances are you would stick to that company. Welcome to the world of CROSS-SELL.

Why Cross-Sell works for Banks and Financial Institutions

Research clearly shows that a customer with just one product at their bank will stay for about 18 months. Add just one more product and the bank extends that relationship to four years. At three products, that relationship will last an average of 6.8 years. (Source: Bank Intelligence Solutions (BIS) from Fiserv). Which means Cross-Sell develops customer stickiness and this in turn helps to be an ongoing cash cow for the Bank.

Mistakes that Banks make while Cross-Selling

Banks know all about Cross-Sell. It’s not a new concept. In a frenzy to achieve stickiness, Banks smother customers with multiple Bank products (the average bank has 44 retail products to sell) at the same time, without understanding their needs or motivation. This leads to customer annoyance, frustration and attrition right after their savings accounts are opened.

What Banks must understand – Principles of Cross-Sell


The two basic principles of Cross-Sell are:

  1. Use your data to understand what your customer needs in addition to his primary productJust ramming a travel currency card, auto loan or a mortgage down the customer’s throat will not make him buy. Identify at what stage of the Customer Lifecycle he is in. Understand his current situation and what his short and long term goals are.
  2. Start small then go big

As seen above, it only takes 3 products for 7 almost years of loyalty. If you lack the data, start with cross selling simpler products with smaller commitments. Allow the customer to ease in to your banking suite.

A typical Cross-Sell schedule could cover:

Product 1 – Savings Account
Product 2 – Credit Card
Product 3 – Mutual Funds
Product 4 – Insurance
Product 5 – Personal Loan
Product 6 – Auto Loan
Product 7 – Mortgage

Where marketing plays a part and how important it is

For any Cross-Sell strategy to be successful, Marketing must work with business and product teams to:

Identify the best customers eligible Cross-Sell

Develop targeted communication unique to a segment of customers. For example – informing customers that we value their association through their existing X & Y products (mention them for personalization) and how as a full service bank we now offer product Z. Then go on to say why product Z from us makes more sense than from a competitor.

Communicate inherent advantages of sticking to the same Bank

These include:

  • Less documentation through the same Bank
  • A discounted rate for existing customers
  • Convenience and less running around
  • Single point of contact for problem solving and issue management
  • Existing trust and security with the brand
  • An upgrade in status due to multiple relationships

Cross-Sell is vital. Without it, customers attrite at alarming rates. Once stickiness is in place, overall profitability will rise. So will the brand name of the Bank. As loyalty increases, word of mouth increases and so does advocacy. Which means a higher Net Promoter Score. Which means a major win for Marketing.

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