Research unequivocally shows credit cards are money makers for financial institutions.
Successful bank and credit union credit card programs depend upon two factors:
- Penetration of the financial institution’s customer base
- Card utilization
In short, it is all about being “top of wallet.” Simple, right? Not so fast.
Growth in penetration rates lost momentum concurrent with the start of the recession. And the CARD Act of 2009 further dampened adoption among younger millennials.
Faced with customer penetration rates that rarely budge, issuing financial institutions have focused on boosting utilization of their credit cards through more customized loyalty/rewards programs, better card controls, and beefed-up fraud protections.
Still, these financial institutions could do much more to optimize their credit card programs.
Leveraging Sales Opportunities
It’s no secret that many community financial institutions are battling for relevance in the marketplace, but many are missing the mark on cross-sell and upsell opportunities.
Personnel is trained to behave like bankers operating in a compliance-driven, regulated marketplace – all necessary – but they lack the discipline and sales-minded culture of best-practice retailers they need for survival.
Bankers need to realize that they are retailers with cash and different solutions to access it as their inventory.
While we’re all aware of the missteps of some of the largest financial institutions trying to drive behavior through incentives – the wrong behavior with the wrong incentives – real success comes from a thoughtful approach that puts the customer or member first.
An approach that not only broadens the breadth of services provided in the relationship but the correct services and solutions that strengthen the financial wherewithal of both.
Think about the best customer experience you’ve ever had – when a service person totally exceeded your expectations.
How did the interaction take place? Was it serendipitous?
My answer is that it was intentional – orchestrated through training and discipline and executed by someone trying to create an immersive experience – the antithesis of a typical experience.
The typical experience begins with the salesperson asking, “Can I help you?”
You respond, “No, I’m just looking,” so the salesperson backs off and waits for you to decide what you need and then fulfills the request.
No further questions from the salesperson. No attempt at problem-solving. No attempt at even trying to understand if a problem exists. No cross-selling or upselling. No real interaction.
Contrast that experience with a salesperson walking up to you in an athletic footwear store and saying, “I see you’re looking at cross-trainers. Do you run on the street or on a treadmill?”
You say, “I run on the street.”
The salesperson then asks how far you run, if you suffer from shin splints and a series of other questions about your running habits – questions that open the door for upselling a shoe with new technology that relieves shin splints and cross-selling some comfortable socks.
That’s intentional selling. But here’s the thing, you were in control the whole time. You got to the correct solution, it just took a thoughtful approach and some probing questions. Being intentional.
Adopting the Retailer Intentional Selling Mindset
If you want to get to the top of the consumer’s wallet – and I’m not limiting this advice to your bank’s credit card – you must adopt an intentional selling mindset. For starters:
- Assume that every person walking through the door has the potential to need additional services from your bank
- Train your bankers to sell with intention: Create a dialog by asking questions to identify and solve problems; identify additional opportunities
- Align bankers’ incentives to behaviors that ensure appropriate and qualified cross-selling and upselling activities are taking place
Top of Wallet – Or Even in the Wallet
There is no doubt that a credit card that provides rewards, fraud controls and the proper line-of-credit is table stakes in this ever competitive marketplace.
The real question is this – are you leveraging your interactions to ensure that a card, your card, is in your customer’s wallet?
- At closing for a mortgage, do you offer your customer / member a pre-approved card?
- How about when you close an auto-loan?
- What is included in your new account opening process?
Sometimes it is not about the data analytics, marketing research, or a special promotional offer, rather, it is really about addressing each interaction as an opportunity to identify a new solution.
An intentional approach that helps ensure the success of your customer and your financial institution.