Instructing employees to offer additional products and services to credit card customers is a common, but often unsuccessful, approach to cross-selling with credit cards. Eric Lindeen of the global financial solutions provider Zoot Enterprises, writing in the American Banker says that although companies face many obstacles in creating an effective cross-sell, businesses can overcome them using the right approach.
A Small-business Strategy
Cross-selling with credit cards isn’t just for financial institutions and national credit card companies. With a good strategy and the right approach, a small business with its own credit card program has just as much chance for success as larger companies. In addition to offering third-party services such as life insurance and unemployment insurance, small-business owners can increase both market penetration and customer loyalty by offering their own products and services to credit card customers.
Lindeen cites irrelevant offers and unreceptive customers as two main challenges to successful cross-selling. One way to overcome this challenge is by using propensity modeling, a method of analyzing cardholder behavior according to specific variables. Use information from credit card applications and account history reports to create a customer profile database. Select variables such as:
- geographic location
- income level
- credit limit
- payment history
- spending habits
Data analysis can help you create both general and targeted cross-selling campaigns based on cardholder behavior.
Indirect options, such as billing statement inserts and indirect interactions with credit card customers, are appropriate for both general and targeted cross-selling campaigns. Billing statement inserts are suitable for products and services such as credit unemployment insurance or a “cardholder-only” shopping club membership offer that targets all cardholders. Indirect interactions, such as tagging specific merchandise with a 10 percent discount to store cardholders, are not only useful for cross-selling, but also for attracting new credit card customers. Use propensity model information in a direct-mail campaign to target cardholders based on their shopping preferences.
Direct cross-selling most often takes place over the telephone, when cardholders call customer service or in an outbound sales campaign. According to Lindeen, success depends in large part on how well your employees present offers. Provide a script that well-trained customer service employees can tailor according to propensity modeling information. This ensures the cross-sell pitch won’t start with a closed-end question, such as “can I interest you in,” or “would you like,” and allows representatives to present offers that match cardholder shopping habits and preferences.
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