“The greatest acquisition strategy in financial services todayis cross-selling.” What a surprise! You could have read this samequote from Forbes (February 2012) 10 or 15 years ago. It's amazingthat banks are still averaging just a 2.10 cross-sell ratio to newcustomers (Forrester Research, October 2011). Credit unionscross-sell ratios aren't much better. If you want your members touse more of your services, it is going to take desire and courageto try something new, and the commitment to implementing a systemproperly.

Understand the Core of the Problem

Many of your credit union's members do not see a visit orinteraction with you as beneficial or valuable. They aren'tnecessarily “WOW-ed!” They want to go in, get their new savingsaccounts, checking accounts and debit cards, and get out as quicklyas possible. Most have no interest in having a detailedconversation with the credit union's employees.

And in many instances, unfortunately, many credit unions do nothave the infrastructure, process or training in place for itsemployees to engage the members. Hence, the dismal cross-sellratio. As a result, attrition rates at credit unions during thefirst 12 months of a new account relationship remain stubbornlyhigh.

In order to actively engage members in the sales process, youmust quickly articulate a compelling value proposition or they willscurry out the door. Getting consumers to open an account is onlythe first step in winning the long term relationship. But in orderto do this, you should assemble checking product packages — or“bundles” (checking plus three additional products or services) —and provide some incremental, monetized value. That's how you askthem to give you more of their business.

Yes, the checking account is the glue that holdseverything together. As you know, a Primary Financial Institution(PFI) is defined as the location that holds the person's checkingaccount. And credit unions need more of their members to use themas the PFI.

One bank, in particular, has done an outstanding job with thisconcept. In Wells Fargo's Q4 2011 earnings report, the bank saysthat 86% of all new customers took advantage of a package ofproducts. Based on average cross-sell ratios in the financialindustry, the average bank or credit union probably has no morethan 10%-15% of new customers/members using four or moreproducts.

The architect of the program for Wells Fargo was Tom O'Rourke.O'Rourke is now the director of Loyalty and Relationship Marketingat Dave Bocks & Associates Marketing in Denver. “The bundlesprogram was very successful at Wells Fargo and once it was rolledout to our customers and our employees were trained on how todiscuss the benefits of the bundles, we saw explosive growth andrecord cross-sell conversions,” O'Rourke said.

You don't have to run the math to quickly recognize thephenomenal impact that moving from 10% up to 86% would have on yourbottom line. Simply jumping from 15% to 30% can double your salesand profits. That's the kind of improvement that's off thecharts.

Duplicate What Works

Hey, if Wells Fargo can do it… so can you. The requirement ofpurchasing four or more products is the ideal place to start. Thistarget represents a relatively small commitment from financialconsumers, yet the retention difference between those with 4+products versus those with just 1-3 products is astounding.

It is paramount that your members understand the value of anybundled packages that are available. Think McDonald's with theirHappy Meals and Value Meals. Customers purchase these bundles of3-4 products because the “bundles” are positioned so that customersget a deal vs. purchasing each item individually.

Creating your checking packages requires pulling four or fivedatabase reports: product penetration, onboarding cross-sell,member retention, and profitability. Analyzing these reports andusing the data will enable you to determine your package mix andhow to quantify the consumer value proposition in monetaryterms.

But WAIT you say!! “We don't have time to do all of this.” Ourresponse: “Not a problem! You shouldn't be doing this alone in thefirst place. There are a lot of working parts that have to be insync to make this program successful” and there are people outthere who can help you.

Merchandise and Market the Heck out of Your New ValueProposition

Provide sales support, merchandising, point-of-sale, lapelstickers, and communication materials that generate customerinterest and make it easy to understand the benefits and value ofthe bundles. You will find new customers much more engaged in thesales process as they actively seek out the package best for them.This results in more engaged, productive, and successful bankers…and bigger sales and profits.

Create an Accountable, Package-SellingCulture

Applying a “package” approach should be relatively easy to do,especially if you are profiling members with an assessment of theirneeds during the sales process.

Training is a key element of a successful bundling orcross-selling program. You can't just throw the employees “into thefire” and tell them to talk about the bundles. They need to knowhow to do it properly. They need training on buildingrelationships and non-pressure selling. Front line must be able toeasily grasp the “bundle” strategy, and see its value — both to theorganization and to consumers. It needs to become second nature tothem, resulting in fewer “coaching moments” and more “attaboys.”

Of course, for this to work you must establish clearly defined,measurable goals. Here's a reasonable place to start: Take thepercentage of new members acquiring 4+ products in their first 12months, and double it. Make that your goal. Take a look at thisexample:

• Before “bundled” packaging: Credit Union XYZopens 5,000 new checking accounts annually. 15% of those are openedwith three additional products, with an average profit per productof $40. So, 750 DDA's x 4 products x $40 = 3,000 sales and $120Kprofits.
• After “bundled” packaging: 30% of checkingaccounts are opened with three additional products with an averageprofit proxy of $40. 1,500 DDAs x 4 products X $40 = $6,000 salesand $240,000 in additional profits annually.

As you can see, engaging members leads to mutually beneficialconversations, which in turn lead to significant increases insales, profits and member retention.

SeanMcDonald is president of Your Full PotentialLLC in Bloomfield, N.J.