Why Cross Selling Falls Short in Retail Banking?

By | March 27, 2012

Recently banks have learned how to cross-sell in an effective manner and have been using cross selling as a marketing approach to increase their client base. The retail banks are switching their strategic focus from cost reduction to revenue growth, while meeting the investor expectations of higher annual growth rates in earnings. This made cross selling a new priority in banking sector.

Cross-selling is considered as advantageous as it reduces customer acquisition costs, marketing, communication and servicing costs and thereby substantially increases spread for banks. It is well understood that, greater number of financial products held by customer leads to an increased probability of retention.

Moreover, banks need to understand that it takes a great deal of time, effort and teamwork to successfully cross-sell beyond the traditional bank product set. Credibility and motivation acts major role in this aspect. The person interacting with the clients needs to have an expertise on the subject and helps in understanding and getting the right product to the client.

Also, bankers are failing too often because they lack in sales skills which are required to sell in tandem with the other financial specialists. The major problem with the banks for failing in cross selling is due to the customer mindset of not to buy more financial products from a single bank. Thus, most banks falls short in cross selling.

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