LAKE FOREST, Ill.—The bigger the institution the better it is at cross selling—and banks, overall, do a much better job of cross sales than CUs.
A new Cross-Sell Study from Moebs $ervices shows that, overall, banks more than double the cross sell rates at credit unions, averaging 2.5 additional sales per account, compared to 1.2 for CUs.
“For the first time ever Moebs $ervices has calculated the cross-sell rates for each and every bank and credit union in the United States,” said Michael Moebs, economist and CEO of Moebs $ervices. “With the improvements in non-dollar information on the Call Reports plus our survey data from over 3,800 financial institutions, we can now accurately measure the cross-sell of accountholders per depository in the nation.”
The results of the Moebs Cross-Sell Study definitely show banks “clearly in the lead” over credit unions, Moebs said.
“All that glisters is not gold,” cautioned Moebs. “Shakespeare in the Merchant of Venice gives a warning that is true today even about cross-sell rates. As with Wells Fargo, which pushed for cross-sell of eight services, there are other ways to sell services which can produce good results at much lower cost.”
Different Techniques
The Moebs Cross-Sell Study notes there are different techniques and processes among depositories for cross selling.
“Banks are primarily oriented to a salesperson approach providing the salesperson with the needed skill sets and affording them the time to sell. Credit unions, as well as some banks, take a multitasking approach,” said Moebs.
Multitasking can include tellering, servicing, or selling, or a combination of all three. Usually the multitasking approach is more order-taking than selling – relying on marketing to do the selling, explained Moebs.
“The multitasking role is less expensive, but is not necessarily more efficient producing sales,” observed Moebs. “This strategy often appears to work for many credit unions and community banks.”
As asset size grows financial institutions move away from multitasking and order taking approaches to full-time sales people only, explained Moebs. FIs with assets greater than $100 million will start to see the investment of time and skills of the salesperson start to pay off. Size and selling specialization allows the depository to build a relationship with customers or members, producing more accounts per accountholder and more revenue for the FI.
Benchmarks
Moebs said that the Cross-Sell Study provides benchmarks to measure the effectiveness of the sales process, allowing comparison among FIs. Other study findings:
- Often depositories cannot justify a full sales approach, so order taking is a fine approach in these situations.
- As banks and credit unions get larger, a full sales process takes over.
“These seem like simple results from the Moebs Cross-Sell Study,” noted Michael Moebs, “but now there are stakes in the ground for all financial institutions to measure the success of each depository’s sales approach.”