Myth or Reality: the 90-Day Window of Opportunity

I find that most industry white papers focus on the importance of cross-selling in the first 90 days of a new customer relationship. It’s a theory likely borne of the belief that cross-sell effectiveness declines after that point in the relationship.

According to BAI, almost 81 percent of a bank’s opportunity to cross-sell happens in the first 120 days. Couple this with statistics that show attrition as high as 50 percent in the first 90 days and a belief that customers are less likely to leave with the more services they have—and you can see why so many banks feel that the onboarding process should be focused on cross-selling more products to new customers.

On this basis, bank marketers are being encouraged to use this window of opportunity to “lock in” new customers in relationships by selling them more products and services. However, can banks really lock in customers? As customers, we do business with banks we want to do business with, not financial institutions we feel obligated to do business with.

And will new customers really stay with a bank simply because they have purchased more products or services? Research shows customers with two or more services are 33 percent less likely to leave a bank. The key phrase here is “less likely to leave.” I’m convinced new customers will leave a bank during the onboarding process no matter how many products they have for following reasons:

  1. The indifferent attitude of employees
  2. Being placed in wrong products
  3. Fulfillment errors
  4. Dissatisfaction with customer service
  5. Being negatively surprised by fees
  6. Being bombarded with irrelevant offers

The major reason why new customers leave in the first 90 days isn’t because they don’t have more of a bank’s products. Rather, it’s because too often they’ve found their name spelled incorrectly on their checks, they haven’t received their check card, they’ve been charged a fee they weren’t aware of, or they’ve encountered a rude teller.

In short, customers leave because their expectations haven’t been met; they’ve had a negative customer experience; they’ve been surprised by unexpected fees; and the bank has done an inexcusably poor job of identifying and meeting their needs—of building a relationship.

Instead, banks need to start building stronger relationships with their customers before providing them with opportunities to buy additional products. Initial communications should be a series of value-focused touch points that encourage customer feedback. Messages should be customer focused not product focused. The bank should ensure that their products match customer needs, the rates and fees on the accounts were understood, and the fulfillment process was smooth, accurate and timely.

To reduce new customer attrition, an onboarding program should center on engagement first and selling second. Banks should first focus on enrollment, activation and recurring use of the accounts the customer already has. Then they should make a smooth transition into cross-selling additional products and services based on identifying their customer needs.

Rather than indiscriminately inundating new customers with product offers in the first 90 to 120 days of the new relationship, banks need to consider successful engagement and relationship building—a strategy that will lead to long-term cross-sell success and customer retention.