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Improving cross-selling performance in retail banking 

As system growth stalls, retail bankers are revisiting their cross-selling strategies as they seek ways to sustain revenues and profits by increasing their share of the customer ‘wallet’. The promised payoff is higher customer profitability, improved customer retention and lower cost of sales. KPMG believes the cross-selling effort needs to be tightly focused on the enablement of frontline bankers if it is to deliver the desired results.

cross selling performance in retail banking


According to data from Roy Morgan Research, Australia’s ‘Big Four’ banks have all significantly increased their average product holdings in recent years. Commonwealth Bank, for example, has seen its APH increase from just under 2.30 in September 2007 to 2.83 as at June 2012, and the other banks have seen a similarly upward trend. However impressive this growth may be, it still falls short of what has been achieved by French and Japanese banks – and certainly falls short of the Big Four’s own aspirations.

As market growth stalls, the focus amongst leading Australian retail banks on cross-selling is only likely to increase as they seek ways to sustain revenues and profits by increasing their share of the customer ‘wallet’. Banks face two imperatives if they are to cross-sell effectively. Firstly, they need to align cross-sell enablers across sales force, customer analytics, products, processes and infrastructure. Secondly, they need to focus on enabling frontline staff to have better quality conversations with their customers.

To achieve this objective, banks need to address five key enablers:

  • Deep customer analytics: Effective customer insights rely on a single customer view and an understanding of customers’ needs. Robust customer analytics rely on customer data from multiple sources that is kept up-to-date and processed quickly to ensure the shortest possible time from data capture to customer contact.
  • Sales tools: Meaningful customer insights are disseminated to sales staff via desktop tools that not only deliver targeted and prioritised leads, but also provide a consistent approach to effective customer conversations.
  • Sales staff capabilities and culture: Most organisations focus on improving sales staff’s product and process knowledge (‘hard’ skills). However, ‘soft’ skills to identify customers’ real needs and aspirations, and develop a customer/prospect dialogue are often more important and less developed.
  • Incentives: Well-designed incentives will be relationship-focused (not product-focused) and should reward customer satisfaction and the proper mapping of all customer financial needs.
  • Sales capacity: Development of capacity management systems will provide staff with sufficient time and resources to pursue their cross-selling objectives effectively and avoid distractions.

The results of empowering frontline sales staff to engage with customers can be compelling. One Australian bank has found that customers who had had a 1-on-1 needs-based discussion had on average 0.7 more products than other customers. Aligning a bank’s resources behind an effective cross-selling initiative is not without its challenges, but the benefits of getting it right can be truly significant.

By Mads Larsen, Associate Director, KPMG Australia

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