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blockgraphCross-sell and Organic Growth Cited as Top Marketing Priorities for Financial Institutions

Yet many need to move from talking about them to taking action

Three years ago, Hudson Valley Federal Credit Union (HVFCU) a $2 billion financial institution in the Northeast realized it was spending too much time on one-shot promotion-based campaigns. So HVFCU decided to switch its focus to an ongoing top-of-mind awareness cross-sell program in which members were contacted regularly about various products. That way, if and when they had a financial need, members would think first and foremost of HVFCU.

Steve Nikitas, vice president of marketing for the credit union, calls this program “lights out” marketing because he knows it will get done, month in and month out, consistently and accurately. “Thousands of pieces of mail are going out to a targeted group, yet we only need to spend four or five hours a month on it,” he says. “This enables us to turn our attention to other marketing initiatives.”

Nikitas is on to something, because cross-sell and organic growth are hot topics these days for banks and credit unions. More than nine in 10 financial institutions say their No. 1 goal is to increase cross-selling.

Yet, while institutions may talk about organic growth, many have not implemented the strategies to facilitate it on an ongoing basis. Betsy Bentley, marketing services director for Harland Clarke, has experienced that firsthand. “I recently gave a presentation to bank executives and asked how many had an ongoing, sustainable cross-sell program in place,” she says. “There were approximately 45 people in the room, and maybe 15 raised their hands. That’s about a third, not 90 percent.”

There are several reasons for this, according to Bentley. One is that many financial institutions focus too much on acquisition. “For them, it’s all about gross new numbers of checking accounts,” she explains. “But in that case, you also have to look at attrition.” And instead of being proactive, some institutions simply will react to what their competitors are offering.

Another more nuts-and-bolts reason is that without an internal marketing customer information file or customer relationship management software in place, cross-sell programs can be time-consuming to set up and difficult to measure without outside help. Ultimately, it is a matter of senior management priorities.

The fact is that there is no better time to launch an organic marketing program than now. Bentley points out that due to the struggling economy and high unemployment, consumers are playing it safe and not moving their money elsewhere. Thus, account holder reaction to cross-sell mailings has been excellent, with an average response rate of 0.5 percent and sometimes as high as 1 to 2 percent. Nikitas of HVFCU says his institution’s onboarding and recapture programs generate response rates of 10 to 11 percent in many cases.

“But the true measures of organic growth are the overall lifetime value metrics,” Bentley says, meaning boosting retention, stemming attrition and increasing average household balance. This is true of all financial institutions, large and small. And while it is also true that the better the data, the better the results, the thing to remember is that a cross-sell program doesn’t have to be perfect. “Don’t worry about having every little bit of information. Just set it up and automate it,” Bentley adds. “You can adjust it later.”

What counts is having some form of direct marketing communication in place, because businesses utilizing direct marketing typically outperform their competitors. It's also important to remember that successful organic growth is not simply about selling more products and services. It's about a continuous organic process of relationship development. Growth initiatives will never move forward if there's too much focus on making them "textbook perfect" in terms of data and customer relationship management factors. As Bentley explains: “You want to avoid what we call analysis paralysis.

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For more information about implementing effective cross-sell and organic growth strategies, contact your Harland Clarke account executive or visit