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Financial Planning > Behavioral Finance

Cross-Sell To Your Clients, But Don't Oversell Your Ability

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Cross-Sell To Your Clients, But Dont Oversell Your Ability

By Charles R. Duncan

So, you really want to cross-sell? Youre convinced that customers want a central source for trusted financial advice. You feel you can truly show you have their best interests at heart if you are able to look at their larger financial picture. And you believe the more products they have from you, the higher your persistency will be.

You arent off the mark. Theres a powerful rationale behind converging multiple (insurance, banking, securities) products on your shelf.

Research–and common sense–tells us it is more efficient to maintain fewer client relationships with multiple products than it is to maintain multiple client relationships with fewer products.

Existing customers are twice as likely to buy again. According to LIMRA Internationals 2000 Study, “Opportunity to Buy,” 27% of households with an existing relationship made an additional purchase, compared with 13% with no previous relationship.

The actual numbers vary by study, but the theme is the same: Improving customer retention rates even slightly causes an exponentially larger increase in profitability over time, thanks to additional sales and referrals.

But stop and think before you rush to expand your knowledge base so that you can offer banking services and investment vehicles.

You offer the most value to your client–and avoid potential errors and omissions (E&O) issues–with a depth of knowledge on select topics, not with inch-deep, mile-wide knowledge of multiple topics.

No financial professional could, or should, single-handedly solve everything for every client.

Ask yourself: Do I want to be in the banking business, or do I want to be the relationship manager for a team that includes a banker and other financial specialists?

In a culture where the customers needs should be given top priority, you must be able to offer various solutions. Do it by building alliances or finding a company that can round out your team.

If you arent affiliated with a company that already offers cross-selling capabilities, meet other professionals through referrals from your top clients, industry associations and local business groups.

When you do this, you can still control the relationship and position yourself as a comprehensive financial advisor. You do this by facilitating annual reviews and by addressing questions from the clients legal and accounting advisors (if they arent already on your team).

Doing this brings you the added advantage of maintaining a grasp of your clients overall financial picture in relation to their short- and long-term goals.

Whether it is you who is offering the advice or someone you have brought in, it is your reputation that is at stake. If you try to take on too many roles, you risk losing credibility not only with the supplemental sales but with the original transaction as well.

As a precaution, make sure your alliances share your business philosophy and values. After all, if your client doesnt like one of the team members youve brought in and takes that business somewhere else, you risk losing your business to another cross-selling relationship.

Moving to a converging sales culture requires an essential shift in mindset. You cant look at a sale as the end of a conversation and simply move on to another client. Its your beachhead, your footprint. It should be the beginning, not the end.

The real victory in making that first sale is not the sale itself. It is the trust you have earned.

That trust positions you to grow your business, both through referrals (from clients and teammates) and through the long-term relationship that will last beyond your clients wealth-accumulation needs and on into the wealth-management needs of retirement.

Achieving multiple products with one client is a goal that can strengthen relationships. But dont try to do it all yourself. Its about discipline. We all know what should be done, so why dont we? Answer that question, connect it and start doing it. The rewards are enormous.

Charles R. Duncan, LLIF, is senior vice president of individual distribution with the Principal Financial Group in Des Moines, Iowa. His e-mail address is [email protected].

Reproduced from National Underwriter Life & Health/Financial Services Edition, May 26, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.


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