Truebridge, Inc.

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As seen in the section, The Lobby, in the November 2009 issue of Community Banker It’s no secret across the banking industry that cross-selling has fallen far short of its early promise. That fact makes the success of Sovereign Bank all the more impressive. Sovereign, a $78 billion-asset institution based in Philadelphia, has seen referrals to its retail investments unit rise between 15 and 20 percent in each of the past three years. “And the quality of those referrals has been higher as well,” said Casey Roberts, a Sovereign senior vice president, who is director of retail investments. Sovereign is not the only bank that has solved the cross-selling riddle: A growing number said they have dramatically improved results by throwing away the traditional playbook and using a customer-centered approach. Partnering with Boston-based Truebridge Financial Marketing, they have implemented a new, low-cost marketing system that uses customer education to deliver more loyalty and profitability. “Our improvement over the past five years in cross-selling has been remarkable,” said Gerard Lavoie, executive vice president and chief operating officer at Dedham Institution for Savings, a $1 billion-asset mutual institution in Massachusetts. THE QUEST FOR CROSS-SELLING There’s no question that cross-selling is the Holy Grail of banking. It allows banks to win a greater share of customers’ wallets, and it ties those customers more closely to the institution. “The more products and services customers buy from you, the stickier they will be,” said Mark Primeau, president and chief executive of Laconia Savings Bank, a $970 million-asset bank in New Hampshire, “and the more likely they’ll be to seek financial answers from the institution over their whole lives.” What’s more, growing sales among existing customers is a way to stretch a bank’s marketing budget during the tough economy. “It’s much easier to cross-sell to existing customers than it is to acquire new ones,” noted Primeau. It’s far more cost-effective, too: With today’s thin profit margins on most products, having a one- or two-product relationship with customers is “rarely going to be profitable in and of itself.” Matching customers with additional products can have an outsized impact on revenue. For instance, just five new appointments per week at a branch can add $160,000 in gross annual revenue for that single branch alone, according to industry experts. GOLDEN OPPORTUNITY Adopting a new marketing system is the last thing that many financial institutions are interested in these days. Most are in survival mode-slashing expenses, wrestling with new regulations and focusing their marketing efforts solely on deposit growth. The industry is missing an important opportunity, however. The upheaval in financial services over the past year and a half has left bank customers with “a crying need for financial education and knowledge,” Primeau said. By offering education, banks can cement customers’ trust while deepening relationships, he said.

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