When making decisions regarding their marketing strategy, financial institutions often discuss “sales funnels” or a “buyer’s journey.” These terms represent strategies businesses can employ to encourage potential clients to leap from qualified lead to buyer. Two of the most commonly used strategies among institutions are “nurturing” and “cross-selling,” which offer unique opportunities to capitalize on potential leads and are suited to different products, target markets, and advertising platforms.
This article will examine these techniques and five of the most important distinctions between these two common approaches. We’ll also explain how they can deliver better results for financial institutions that implement them intelligently.
The Strategies
“Nurturing” refers to how a business accompanies a prospect from inquiry to eventual sale. The nurture approach is very involved and requires multiple contact points across different channels. This approach allows institutions to build deep relationships with their prospects, inspiring future loyalty and allowing companies to gather precious data regarding consumer habits and demographics.
“Cross Selling” is the process by which companies offer related products to previous buyers or leads already on a buyer’s journey. Often, cross-selling is a delicate balance of showcasing complementary products and timing the offer so that the client feels as if they’ve been rewarded for navigating the sales process. This approach is very effective for financial institutions, as they provide multiple products and services. Their offerings generally constitute an “ecosystem” where consumers’ closely related needs can all be fulfilled.
Why it Matters for FIs
Distinguishing which type of sales tactic you should implement can make an enormous difference in the overall effectiveness of your marketing. In an increasingly digital sales environment, financial institutions often need help finding an approach that matches their brand and meets the needs of their consumers.
The Five Key Differences
#1: Target Audience
A nurture campaign's target audience should be people demonstrating brand loyalty. To establish a long-term relationship, a nurture campaign requires contacting a lead at multiple touchpoints through different channels. Therefore, it is less suitable for consumers who tend to make numerous inquiries to other providers. For instance, financial institutions may attempt to target older demographic categories when opting for a nurture campaign, as they tend to stick with their financial providers for longer periods.
Cross-selling concerns itself with audiences already on a buyer’s journey, whether they are potential leads or have already purchased a product or service. Financial institutions, for example, can scour account data for variables that indicate their prospects are about to inquire about a credit card and preemptively market those options to the consumer.
FIs interested in a cross-selling approach may benefit from SMS marketing, a straightforward way of reaching out to previous clients with updates and offers. You can read our article on The Dos and Don’ts of SMS Marketing to learn how your institution can leverage SMS marketing effectively.
#2: Points of Contact
As stated previously, nurture campaigns require a great deal of contact between institutions and consumers. These interactions are spaced throughout the buyers’ journey and assist prospects at the “sticking points” where questions and concerns can cause them to drop out of the sales process. Ensuring they receive fast, accurate information about their current stage in the journey allows banks and credit unions to sidestep objections and build momentum toward an eventual sale.
Our article on Conversational Marketing demonstrates how businesses can use AI chatbots to accompany consumers through different stages of the sales process, a high-tech example of a nurturing campaign.
Cross-selling is most effective when utilized at the end of the sales process. Consumers are much more likely to make additional purchases once they have committed time and thought to purchase the original product. This technique can be used when customers/members are finalizing a service acquisition or in follow-up conversations with people where data can help to make more accurate predictions about their needs. For example, a small business owner opening a line of credit with your FI may feel overwhelmed if presented with all their options at once. Offering them the chance to consider additional products or services towards the end of their initial inquiry prevents this analysis paralysis from happening.
#3: Relationship Building
Nurture campaigns rely significantly on the institution’s ability to build a trusting relationship with the potential customer/member. The prospect relies on the business to educate them about the product or service, answer questions, and lead them through the process step-by-step. All of this requires that the consumer trust the institution wholeheartedly. This can be achieved through choice of language, availability, and demonstration of knowledge about each individual. Financial institutions often require one-on-one contact, where the consumer is assured that their individual needs are recognized and prioritized.
Cross-selling campaigns also benefit from an abundance of trust in the relationship but differ in how they cultivate it. Institutions can build relationships with buyers by establishing the reliability of products and services and using that positive impression to market additional offerings. For instance, people who have trusted an institution with their mortgage, and are pleased with their rates and terms, are more likely to seek out its services for everyday banking needs.
#4: Products & Services
Financial institutions benefit most from nurturing campaigns to assist in meaningful, thought-out purchases. This could be a costly product, like a home or vehicle loan, or a very important one, such as life or pet insurance. These products and services are not chosen lightly and require some support at every stage of the decision process. A nurturing approach can help consumers see major financial decisions like mortgage and auto loans as less intimidating, making the conversion much more likely.
Both large and small products and services can benefit from a cross-selling approach. When deciding if a cross-selling strategy is appropriate for a specific offer, the most important factor is defining the consumers’ needs. Cross-selling can fall flat if, for instance, an FI is attempting to market a HELOC to college students rather than a student credit card.
#5: Follow Up
Once a sale is completed, nurture campaigns can focus on ensuring the consumer is satisfied with their new service and begin collecting data from the whole process. Nurture campaigns are fluid and require fine-tuning, which means that receiving feedback from customers/members is essential to streamlining the process for the next lead. This data-gathering process should mimic the language and feeling of the sales process closely, where buyers are made to feel that their individual experience is most valuable to the bank or credit union.
Cross-selling follow-ups are very straightforward. Once the purchase is complete, institutions clearly understand the products and services they should be offering to complement the sale that was just made. A financial institution that just opened a line of credit for a small business venture could follow up with offers for a business debit card, treasury management services, or any other small business solutions.
Implementation
So how to go about implementing these techniques into your sales process? Luckily, Prisma specializes in creating personalized marketing campaigns tailored to suit the needs of financial institutions and the people they serve. Our insights give us a unique vantage point to survey the environment our clients find themselves in and offer comprehensive solutions that drive true value.
Contact us today and see how Prisma can transform your marketing and empower your financial institution, or visit our blog for the latest on the rapidly shifting landscape of marketing strategies in the financial sector.
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