Cross-Selling in Uncertain Times

This is bonus coverage from “Lending 2020” in the January 2015 issue of Credit Union Management magazine.

“I know that I know nothing.” The Socratic Paradox is particularly true when it comes to the ever-changing state of the economy. There are two very specific predictions that none of us can make: How will the economy perform in the future, and what financial products and services will consumers be interested in during specific times of stability or uncertainty?

Regardless of economic conditions, it seems likely that consumers will still need basic products like car loans, credit cards and mortgages. There will still be a need for deposit demand accounts, loans, investment accounts and, of course, credit union memberships.

The big question remains: What additional products should credit unions be offering in the future? The inability to answer this question with complete certainty is the reason why the specific products offered for cross-sell are actually less important than the technologies used to present them.

  It is tempting to get caught up in the latest fashion trends of the next great cross-sell product. At various times, credit unions target debt protection, guaranteed asset protection, mechanical repair coverage, unemployment insurance, new loan offers, loan recaptures and replacement loan products. Some may focus cross-sells on building loyalty with innovative service offerings, such as credit counseling for the credit-impaired, or deposit products for affluent members. One credit union even collected information from the community so it could alert members with young children of openings at a popular daycare facility.

In the end, however, there will always be another new cross-sell product or service tomorrow, next month, and next year. The list is ever-changing, and that is a great thing!

Because the popularity of cross-sell products will continue to wax and wane, it becomes important that the people, processes and technologies are poised to adapt to the next big cross-sell opportunity as soon as the credit union is ready to take advantage of it. If not, the organization risks missing critical revenue and relationship-building opportunities.

For instance, we know from various studies that 80 percent of Millennials are more likely to buy from organizations that support a common cause, such as credit unions. Are your technologies helping you to capitalize on their active engagement from the point of purchase?

I liken cross selling Millennials during their online engagement to the on-demand cross-sells we all get today at the grocery store. When I went to the grocery store when I was 30 and had two young kids, the automatic coupons I’d get were for formula, diapers, popcorn, and free Blockbuster movie rentals. They knew me, who I was, what I was doing and, most importantly, where my paycheck was going. Now, in my 50s when I visit that same store, the coupons are for vitamins, buy-one-get-one-free dinners at fancier restaurants … you get the idea.

When Millennials are online with you the loan origination system or CRM knows who they are, what they are doing, and where their paycheck is going. The systems know this generally (from address, age, income) or specifically (from account number, credit report, social media connections, etc.).  All of that general and specific information can be used at any time during the engagement to generate messages to the member, customize offers or otherwise cross-sell to the young member in a very personal and timely way.

In addition to allowing new types of cross-sell opportunities to be implemented easily without needing significant configuration involving IT or the vendor, today’s cross-selling technology needs to be flexible on a number of dimensions and allow the following to be easily defined: 

1. To whom should the cross-sell be offered? At a minimum, the technology should allow credit unions to define member selection based on traits found within the loan application, collateral details and trade lines on the credit report.
2. What should the cross-sell offer include? Generic cross-sells simply do not work. The technology needs to only present opportunities that are appropriate, fully qualified and approved.
3. When should the cross-sell be offered? Timing is critical and differs across products. The technology should allow you to define if a cross-sell should be offered pre-application, pre-decision, at decision, post-decision, post-funding, three months post-funding and so on.
4. Where should the cross-sell be presented? Technology should accommodate offers that may be broad or specific. Some may be Web only, mobile focused, indirect only, or apply to whatever new delivery channel is on the horizon.
5. Why is the credit union offering this opportunity? Providing cross-sells in well-written marketing language that’s highly effective and understandable (not just “system alerts” type language), as well as tracking of the success and profitability, are items cross-sell technology must support.

Going forward into the year 2020, I believe that cross-sell engines will take a more holistic view of members’ financial situation before determining the best opportunities to offer them. Cross-selling will be more like helping members shop for a whole outfit rather than a single pair of shoes.

In keeping with this, the cross-sell teams of 2020 will need to (and likely will, says the optimist) move from a sales role to a trusted advisor and partner role. This shift changes the discussions from the tone of “past results do not guarantee future performance” to a tone of “You and I are in this together, and while I know you want a new car, now is not the time. Let’s chat about great repair shops that we endorse, and plan that new car for when Johnny graduates from college.”

The future is uncertain and is constantly changing. It’s important for your cross-selling vision—and technology--to keep pace.

Larry Edgar-Smith is SVP/product evangelism for CUES Supplier member Akcelerant, Malvern, Pa.