Credit unions must improve cross-sell efforts

Despite the fact that credit unions have talked about the importance of cross-selling for decades, few institutions have a disciplined process to take advantage of cross-selling opportunities that can grow operating revenue from existing members. For those organizations that do have a process in place, studies show that many are not targeting the offers to reflect insights readily available, thereby annoying some of the best members.

by: Jim Marous

Outside of an improved interest rate spread (which is unlikely in the foreseeable future), banks can only create revenue by adding new members or by deepening existing relationships. At a time when competition for new customers has never been greater from both traditional and non-traditional players, the only sustainable opportunity is to sell more to the members a credit union already has.

While the findings differ a bit by study, research shows that U.S. adults own between 8-12 financial products each, with ownership of services increasing with age (until age 54), by channel (online users have more products) and by type or institution (credit unions and smaller banks do better cross-selling).

“While the number of products held by a typical household hovers around 10, most customers only hold 2-3 services at any one institution.”

While the number of products held by a typical household hovers around 10, most customers only hold 2-3 services at any one institution. Only the very best organizations sell more than four services to any one customer (not including ‘go with’ services such as debit cards). How can credit unions improve their penetration within their current member base?

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