How financial institutions can leverage data to cross-sell and spark delight

As Managing Vice President of Client Strategies for Deluxe Data-Driven Marketing, Derek Elmerick helps banks plan and execute cross-selling campaigns that derive more value from their existing customer portfolios. A positive feedback loop of timely and relevant offers, reduced attrition and improved customer retention is a powerful combination. As Derek explains, having access to the right data—and knowing what do with it—is key to delighting your customers.

Your role involves a lot of direct interaction with financial marketers. What do those clients say are their biggest challenges right now?

Derek Elmerick: I think the biggest challenge is just, how do you compete in a really competitive environment? There are a lot more opportunities today than there were historically for customers to shop around and find competing products.

And over the past years as interest rates fluctuate, consumers’ perception and interest toward mortgages has changed. It's not that the products have disappeared—the opportunities have decreased in volume, but they are still there—but the level of precision and sophistication that goes into targeting customers is greater now than it was a year ago.

How is data-driven marketing helping clients respond to those challenges?

Elmerick: Right now, that might look like restructuring how they think about marketing, shifting from acquisition to cross-selling. We have access to a tremendous amount of first- and third-party data, so we’re able to understand how the market is changing and evolving and use that to help clients create a really informed approach to their marketing.

Expand on that—why is it so important to get the cross-selling piece right?

Elmerick: There are two major reasons. One is, it’s just easier to sell to an existing customer than to a new prospect. In terms of revenue generation, on a cost-per-account basis, the ability to sell to your existing client base is easier than prospecting.

The other is more of a retention play. If you don't continue to cross-sell to your existing clients, somebody else will. You need to make sure you’re maintaining your existing customer base and continuing to cross-sell to mitigate attrition. The good news is we have a lot of data today to help support cross-selling initiatives, that allows us to get in front of consumers as soon as we understand that they may be in the market for a product from a competing institution. 

What differentiates a successful cross-sell program from an unsuccessful one?

Elmerick: There are three main things it often comes down to: timing, data aggregation and segmentation.

Trigger-based programs are about looking for opportunities where someone is likely to be in the market for a particular product and reaching out to them when it’s relevant to do so. The more you can capture that timing piece, the better experience you’ll create for existing customers as well as prospects.

Regarding aggregation, banks have a ton of internal data on their own customers. But if you're only using that single source to run your cross-sell program, you're missing out. You won't have that greater holistic understanding of your customers, and you’ll miss additional opportunities for outreach.

And when you do talk to them about those products that are relevant, speak in a way that aligns with the with the behavior of that particular consumer versus just a mass outreach in a very uniform way. That’s where segmentation-based solutions come in.

What are segmentation-based solutions?

Elmerick: I talked about this recently with a client asking about home equity. It’s an important product for them, but they're not really sure how to create some level of differentiated marketing right now.

The way I explained segmentation is, certain consumers are very averse to any sort of home lending product. They won’t align with that product messaging. And even within the group that is favorable toward home equity, there are consumers that view it in a cautious way, and others who see it as an efficient funding vehicle. And within each of those segments are consumers who have utilized home equity before, and those that haven’t. And so on.

Those are all very different segments of consumers, just for one product. Being able to identify those differences helps you message each of them in a way that’s as relevant and effective as possible.

From the consumer perspective, most people would say they don't like being aggressively sold to. How can cross-selling help marketers meet their own goals while still creating a positive customer experience? 

Elmerick: With the right approach to data, cross-sell programs can do more than just achieve loan growth. They can actually delight customers and turn them into advocates for your bank. But again, that can only happen if you capture the timing, data aggregation and segmentation pieces. 

As a rule of thumb, if your customers’ response to cross-selling is that it’s “too sales-y,” you probably need to optimize the segmentation, triggers or both.

With all the data points available to marketers, is it possible for marketing to become too precise?

Elmerick: Definitely. There’s a boundary between using the data effectively and over-utilizing the data. You can’t delight a customer if they feel like they’re being watched. That sensitivity piece is really important.

We build solutions that are highly precise, and we believe our trigger data is the best you can find. But there’s still going to be a false positive here and there. In that scenario, you want to resonate with somebody who's actually experiencing the trigger, but you still want another at-bat, so to speak, if you reach somebody that didn't. And if you're if you're too precise, that second at-bat can't happen.

Let’s say you do strike out on that first at-bat. How do you make the most of that second chance?

Elmerick: Optimization. We're always looking for ways to make greater strides and improve our targeting—taking the results of our programs and using that information to help inform subsequent programs. One of the things we tell our clients, and it’s true, is that we’re not doing our job if the performance of our programs is not improving campaign over campaign.