Kicking It Up a Notch
Taking retail bank cross-selling to the next level
Cross-selling has become a strategic priority for many banks in recent years. It is well known that the incremental cost of selling to current customers is generally much lower than to new customers.1 Recognizing this, banks have, over the years, invested heavily in cross-selling to increase wallet share.
Yet, it appears, many banks may be far from realizing the full potential of cross-selling. A Deloitte survey conducted in August 2012 supports the view that existing cross-selling programs may be ineffective: only 19 percent of retail bank customers owned three or more products in addition to a checking account with their primary bank, compared to 49 percent who have three or more products with other financial institution.2
Successful efforts to address deficiencies in cross-selling may depend on a more refined understanding of the following questions:
- Why have customers opted not to expand their product relationships with their primary bank despite years of extensive efforts by banks?
- Is there a need to re-assess and refine how banks approach cross-selling efforts?
- And which consumer segments can banks target to capture higher wallet share?
This paper aims to provide some perspective on these questions. It also emphasizes the importance of adopting a behavioral segmentation approach that takes into account attitudes and perceptions together with demographics to improve cross-selling.
1 Tom Groenfeldt, “Tech and geography beat too big to fail at Wells Fargo,” Forbes, August 23, 2012.
2 The online survey of 4,271 checking account customers was conducted by Harris Interactive during August 16-30, 2012. For details, refer to ‘About the Survey’ section at the end of the document.
As used in this document, “Deloitte” means Deloitte LLP [and its subsidiaries]. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.