The Retentive Power of Relationship-Selling

With the perception of banks at an all-time low, a successful customer retention strategy requires frequent contact, a consistent message, education and trust — thus becoming not only a cross-selling strategy, but also a relationship-selling strategy.

Relationship-selling is a fundamentally different way of thinking about your customers. It’s based on a philosophy that business should be practiced as a trusted friendship, rather than a process of simply selling products and services.

Relationship-selling focuses on identifying and meeting the individual needs of your customers. One of the major reasons for high attrition rates is that customers’ needs change over time. And, unfortunately, banks fail to notice and don’t do what they should: preemptively offer appropriate products and services.

By integrating a relationship-selling strategy into your bank’s current marketing strategy, you’ll no longer have to rely solely on offers generated by your CRM system or directives from senior management on the products and services your bank needs to sell.

Often, Marketing is told what product to offer—then must try to identify what customer segment to send the offer. I’m sure you’ve all heard a statement like this: “We need to push home equity loans this quarter!”

But, instead of pushing products, your bank should be tailoring offers specifically for its customers. It’s the strategy at the heart of relationship-selling: Offer products that your customers need rather than what the bank wants to sell.

Research shows banks that implement a relationship-selling strategy are more effective in increasing cross-sell opportunities than banks that solely rely on their MCIF or CRM systems. Why? Cross-selling is far more than just slicing and dicing data to try to determine patterns of behavior that will reveal some hidden need for the bank’s products and services.

Granted, CRM systems have the ability to model and make predictions of what customers may purchase next based on the products and services they currently have. Data, for example, may show that customers with a checking account traditionally open a savings account as their second bank product.

However, customers continuously experience lifestyle changes. They’re graduating from college, getting married, having children, buying or selling homes. The big question is: How can you identify these lifestyle changes so your bank can send timely relevant offers to meet those specific needs?

We all know CRM systems can’t predict when a customer will get married, divorced, move or change jobs. You can only identify these needs by communicating with your customers and having them share this information with you.

To be effective, you need to create a dialogue with your customers. Ongoing, two-way communication with your customers provides your bank with important feedback so it can consistently send timely relevant offers to your customers based on their life cycle and needs. Only by learning what your customers want and need can you provide appropriate offers to your customers. The more insight you have with respect to your customers’ needs, the more products they will buy and the longer they will stay with your bank.

With eroding customer confidence and competitors aggressively trying to lure away your customers, you can’t afford (literally) to miss the opportunity to build trust-based relationships with your customers by focusing on developing a relationship-selling strategy that identifies and meets the personal needs of your customers.