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The Secret Weapon Banks Aren't Using

The Secret Weapon Banks Aren't Using

by Jay Freeman

Amid record profits, banks are still having trouble increasing their revenue. One strategy is to increase cross-selling, but few banks do it effectively.

Although the darkest days of the Great Recession are behind us and we've weathered the worst aftereffects of the 2008 global financial collapse, banks are still having trouble boosting revenue. One effective strategy is to increase cross-selling, but few banks do it well.

Most customers want their banker to be their advocate, not just an order taker.

In the first article in this two-part series, I wrote that a cross-selling initiative -- which aims to generate more business from existing customers -- is more likely to succeed if it's divided into two phases. The first phase has four steps. First, define and measure cross-selling because there's no industry-standard definition. Then, analyze the drivers of cross-selling to decide how to improve it. Next, link the bank's cross-selling efforts to its vision and values. And finally, determine the metrics that accurately reflect front-line workers' performance.

Once these activities are complete, the bank is ready for phase two.

Phase two: Building on the cross-selling foundation

1. Address variation in branch-level sales performance, and identify best practices. When banks analyze differences in sales performance across branches, they'll find clues to what is causing variation. Factors that are out of a branch's immediate control, such as poor location or market density, may be keeping sales low in certain locations. In others, sales could be down due to more controllable factors, such as low employee engagement or the need for better coaching of staff. By carefully analyzing and addressing what is causing the variation, bank executives can implement best practices that will control it and drive the average performance across all branches higher.

At the same time, it's also imperative to determine what drives high performance. Understanding what makes "the best, the best" can help executives identify best practices that they can implement across all branches. The ultimate goal isn't being better at being average; it's achieving excellence in every branch and at every customer touchpoint.

2. Improve the customer encounter. The number and frequency of products a bank sells depends on the quality of the customer encounter, and the biggest single influence on that encounter is the bank employee. A bank can improve the quality and consistency of the employee-customer encounter by recruiting the right talent, defining the right outcomes, and training the right skills.

Just as a golf coach takes a swing and breaks it down to its elemental parts, banks should analyze and define an ideal employee-customer encounter in detail. Developing a detailed description allows leaders to focus on specific areas for improvement through in-depth observation and coaching.

To determine the crucial elements, put yourself in the customer's shoes and think about what you might expect from such an encounter. Most customers value a warm greeting upon entering the facility. They want the banker to listen to them and understand what they need. They want the banker to be their advocate, not just an order taker. They want commitment and follow-through. All of this can happen in an unstructured encounter, but by developing a "golf swing" approach to managing, front-line workers can much more consistently and effectively achieve this ideal encounter.

Banks must take care when defining a process to allow room within that process for staff members to be themselves. A warm greeting, for example, can't be scripted and remain warm and genuine. It is a balancing act.

3. Implement a short-cycle sales management process. This kind of process can promote an environment that cultivates immediacy, focus, and continuous improvement. It also gives structure to the performance improvement process and keeps things moving forward. One example is having teams gather for a "daily huddle," which gives employees a quick opportunity to gain alignment and to commit to an outcome every workday prior to opening.

Another example is establishing a performance cycle for commitments and results. At the beginning of the cycle, the team commits to accomplishing individual objectives within a specific time frame (usually a week). At the end of the cycle, the team meets to report on the commitments and outcomes, then commits to the next cycle's objectives, and the process restarts.

These commitments should be actionable, measurable, and observable. They should be actions as well as outcomes, and they should be challenging but not overwhelming, such as making a specific number of customer calls. The goal is to stretch the team while making certain that all commitments get done -- always.

4. Review recognition and incentive systems. Once a bank has determined its performance measures and expectations, it should take a fresh look at its recognition and incentive system, which should be as simple as possible. Most companies tend to over-complicate recognition and incentives, and as a result, dilute the potential impact any program might have.

The simplest, best program should recognize and reward the behaviors that drive cross-selling. And banks will know what those are by doing a driver analysis, which we described in detail in part one. When employees exhibit those behaviors, they should be recognized; when those behaviors increase cross-selling, employees should be rewarded.

But employees don't always have to be rewarded with money. Banks tend to focus on monetary incentives much more than on nonmonetary recognition, but this is a mistake. Other forms of recognition can be powerful and meaningful to employees, banks can award them more often, and they cost the bank little or nothing.

Creating an unassailable business advantage

Every bank wants to grow revenue. Though many have conversations about cross-selling as a means to accomplish this goal, few get from a hypothetical discussion to enthusiastic action. Perhaps the reason few banks succeed at this strategy is because it is hard work. Success depends on the right outcome among thousands of customer encounters with thousands of bank employees each and every day.

Getting cross-selling right is hard to do. But that's the beauty of the strategy. When a bank can succeed at this business model, difficult as it is, the bank creates an almost unassailable competitive advantage. This alone is worth the significant effort it takes. But the real payoff is in increased revenue.


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