Startups, scaleups, and mature organizations – all use cross-selling techniques for customer acquisition. It’s a great way to not only sell new products but also hook users on a brand and increase chances of future loyalty. The key is trust, engagement and offer. What cross-selling FinTech strategies can you implement in your company? How to deepen relationships with your customer base?
What is cross-selling in Fintech?
A cross-sell is a practice of offering additional service or a product to an already existing or a new customer. In can be done even at the stage of setting up the account, when a prospect gets a splash screen with complementary service. Although it’s not recommended (seems very pushy), it sometimes gets the job done.
According to a Hubspot survey with over 500 sales professionals polled, 74% of cross-sellers said it contributed to up to 30% of revenue. On the other hand, research by Temkin Group shows that loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering.
This points out interesting possibilities. If you want to sell more, simply offer more. Especially compatible, complementary products and services that give people more features and enhance already rich experience. But that calls for personalization. Gallup study tells us that 66% of customers feel that incoming offers are general in nature, with 53% of customers already owning the product being promoted.
As you can see, cross-selling is a critical sales technique that increases customer lifetime value, generates revenues at low incremental costs, and strengthens customer loyalty and client relationships.
What are the benefits of cross-selling in FinTech?
There are a few major factors to consider. Selling more is the most obvious thing, but you should not implement this strategy for money alone. Other things are even more important since cross-selling is a marathon, not a sprint.
Customer engagement. The more people trust your solution, the more they decide to stick to it. This leads to improvement suggestions, promotions participation, etc.
Customer loyalty. The more they are engaged, the smaller the risk of ever leaving the app. Yes, people experiment and change tools, but if something works, why bother?
Higher, even two-digit spending. This is the heart of cross-selling, with the rest serving as the preparation. When the trust is established, the rest follows. The more you sell (and prove usefulness while doing it) the more people see the value.
Higher payment frequency. People use digital currency and tools associated with them as something only half-real. It’s easier to spend ones and zeroes than cold, hard cash. It’s basic psychology. So, if you can convince people to spend more on additional services, they will. Not only on them but across the app.
An increased number of users. There isn’t a universe where all features speak to all users. People cherrypick. What they need now and what they need overall. But the more you offer, the higher your chances to sell something to everyone. Cross-selling is not only for the existing client base. It’s a powerful tool to convince new ones to sign up.
Testing ground. Cross-selling in FinTech is about personalization. That’s why implementing new solutions gives you an opportunity to refine ideas and see what works and for whom. It’s not necessarily a good idea to present and pull out services after just a few weeks to test them. But it’s a great idea to test what has strong feelings among your team and seems like a worthy addition. When you’re numbers-based, it’s easy to make more than educated guesses. Use it.
Cost efficiency. Cross-selling to existing customers is often more cost-effective than acquiring new ones. The marketing and acquisition costs are typically lower.
Competitive edge. Banks that excel in cross-selling gain a competitive edge in the industry. They can provide a more comprehensive range of services, attracting new customers as well.
Data insights. Cross-selling can provide valuable data insights that help banks understand their customers better, refining their product offerings and marketing strategies.
Some examples of products that you can cross-sell
You can offer multiple things across the board. Here are just a few inspirations.
Credit cards. Cross-sell credit cards for convenient purchases and financial management, while generating revenue through interest and fees.
Savings accounts. Encourage customers to open savings accounts, promoting financial security and growth through interest on deposits.
Insurance offerings. Promote insurance products, such as life insurance, health insurance, and property insurance, addressing customers’ protection and security needs.
Personal loans. Assist customers with financial needs like home renovations, education expenses, or debt consolidation through personal loans within the mobile banking app.
Mortgage services. Guide customers in the process of home buying with cross-sold mortgage services, simplifying the complexities of home financing.
Investment products. This is advanced, not that easy, but doable if you can establish trust first. Offer various investment options like mutual funds, stocks, and bonds, attracting those aiming to build wealth and achieve long-term financial goals. Especially households, with little-to-none knowledge about the subject. Show them they can really benefit without the hidden agenda behind it and they will come. Everyone likes additional bucks in their pocket, after all. Even if the pocket is virtual.
Cross-selling in FinTech? Only through a customer-centric approach
We need a customer-centric approach to follow users in the funnel. A solution to that can be contextual banking. You need a plan to ensure a customer-centric approach. Here’s one:
Data analysis. Begin by analyzing the customer’s transaction history and behavior.
Identify needs. Look for patterns and needs. For instance, if they check balances frequently, they may be interested in savings, investments, or insurance.
Select products. Choose relevant products and services for cross-selling.
Personalize approach. Tailor your approach to the customer’s specific needs.
Engage. Engage the customer through appropriate channels.
Provide information. Offer clear product information.
Encourage action. Prompt the customer to take action based on their needs.
Support. Provide ongoing support and assistance.
Feedback loop. Gather feedback and adapt your approach for future interactions.
Use optimal frequency. Push notifications in a mobile banking app are typically less bothersome than SMS as they pop on the screen without interfering with users’ ongoing tasks. Use prompts wisely.
Communicate through simple wording. Most mobile banking users don’t know a lot of financial terminology. Thus, tailor the wording in cross-selling messages to clients. Speaking customers’ language helps to avoid scaring them away, strengthen communication, and succeed in cross-selling endeavors.
How to measure the effectiveness?
You can use a few Key Performance Indicators (KPIs) for that. They will provide valuable insights. You can, for example, consider these:
Cross-sell ratio. The number of cross-sell products per customer or per account.
Revenue per customer. The additional revenue generated from cross-selling products.
Customer satisfaction. Customer surveys and feedback to gauge satisfaction levels.
Customer retention rate. The percentage of customers who remain with the bank.
Compliance score. Ensuring adherence to ethical and regulatory standards.
With them, you can make sure your efforts don’t burn money.
Valuable strategies for cross-selling in Fintech
To succeed, companies need to develop cross-selling strategies that position additional products as amplifications or extensions of the user’s existing engagement. That way, they feel like the natural next step in the customer’s journey. The goal is to deepen the relationship with customers, ensuring you meet their diverse set of needs via products developed through user and UX research.
Strategy number 1.
Drive conversion by minimizing the steps to use a new service or a product. Lengthy, complicated initial registration processes are a barrier to conversion and account creation.
Defer or postpone data collection where possible, and tailor any requests to fit the specific product in question. Avoid asking users for large amounts of information (that may seem irrelevant to them) at the outset. Leveraging familiar registration options such as Facebook and Google (“Continue with Google”), can further smooth the registration process and minimize requirements for the user. Registration for a product is not a job!
Organizations should also think about how they can provide users with tangible value before asking for information. This could include a free report, a self-assessment tool, or other types of relevant engagement that provides users with immediate benefit.
Strategy number 2.
Anchor on an initial experience and then orient the user toward other relevant products. Preserve the flexibility and control for users to opt-in when they want.
Users prefer to start with a single product as a way of “testing” the experience as this helps them build trust and “verify” that the product is credible. Once they have experienced value through this exploration, users are more open to signing on for additional products.
Given this expectation, startups should design an entry point or anchor to their offering, and direct new users to this anchor as the first step in the funnel. This anchor serves as a way for users to meet, get to know, and test their experience with the provider, before committing to further engagement. This first experience should be carefully constructed to minimize “asks” and provide immediate value to users and start to build a foundation of trust.
Good anchors not only benefit users, they also nudge users in the right direction, helping them make informed decisions in the future. They often foreshadow the product journey by showing a current starting point along with suggested actions for now and for the future. A good anchor opens the door for future engagement and for a personalized experience.
Strategy number 3.
Respect the user’s cognitive capacity by making options, actions, and features visible when the user needs them the most.
Aim for visual simplicity and aim for content simplicity in organizing elements on the interface so that users can easily discover new products in their journey. It is important to use language the user understands and maintain consistent use of the terminology.
Iconography and other visual aids such as themed coloring and consistent placement of items can help returning users find the functionalities they want. Startups can also employ visuals and pictures that users can quickly associate with specific actions or information.
Furthermore, startups should minimize the user’s memory load by making objects, actions and options available when users will need them. For example, all essential information should be on the same page as the call-to-action button. Users should not have to remember information from one dialogue to another, or shuffle between pages to retrieve the information they need to understand products and make a decision.
Finally, discoverability is the critical aspect of designing for cross-selling strategies. Core services should always be easily visible, and it is critical to have a good user experience in learning about new services to drive uptake of those offerings.
Strategy number 4.
Present products in the context of a user’s needs as a unified goal, journey, and experience, and avoid treating them as standalone objects.
Treat their cross-selling strategy not as a separate funnel strategy but as a deeper engagement; one that extends tangible solutions and strategies to help users achieve their set objectives.
This can be done by integrating products in the context of the user’s experience and behavior, illustrating how unlocking these additional services can help the user reach articulated goals.
For example, asking a user who has recently received a salary payment, “Did you know that by also saving 10% of your income, you can grow your wealth and meet future expenses by depositing into your savings wallet?” could be an example of an effective cross-sell trigger.
This approach highlights products’ complementarity in the context of the user’s needs, goals, and journey, giving them a holistic picture of the value they can derive over time. It also allows users the freedom to choose and engage according to their felt needs, preferences and abilities.
Strategy number 5.
Leverage gamification for the perfect outcome but don’t oversell it. Not everyone likes to compete (even if only with themselves) all the time. This should be an option, not a mandatory activity. Companies tend to create gamification that often overstay their welcome.
Mobile banking enables the creation of competitions, challenges, and rewards centered around particular features of your product. Setting objectives, monitoring progress, and achieving milestones can be used to unlock rewards. These rewards incentivize customers to explore and engage with cross-selling offerings.
Gamification allows you to influence desired consumer behavior or the customer journey and build a strong brand connection in their minds. You can make your banking apps more exciting and enjoyable by incorporating gamification components like quizzes, surveys, and minigames.
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