Cross-selling can significantly bolster your institution’s bottom line by eliminating acquisition costs, increasing revenue, and creating loyalty. It’s also an area many financial institutions struggle in.
The good news is that loyalty rewards, especially relationship rewards, can be harnessed to enhance customer engagement and supercharge your cross-selling efforts. Cardholders who utilize multiple products and services enjoy a more comprehensive financial experience and unlock many benefits, including enhanced convenience, improved financial stability, and increased opportunities for maximizing their economic potential.
This week on the blog, we explore how loyalty rewards, particularly relationship rewards, can strengthen the bond between cardholders and your institution while effectively increasing cross-selling opportunities.
Understanding Relationship Rewards
Relationship rewards are loyalty rewards specifically designed to cultivate a deeper connection between cardholders and their financial institution. Unlike other rewards products, relationship rewards incentivize cardholders to explore and utilize a broader range of products and services. This goes beyond the conventional approach of merely earning transaction points; it encourages cardholders to engage in a more meaningful financial relationship.
A key benefit of relationship rewards is their effectiveness in generating new business among existing cardholders. The Financial Brand1 states that financial institutions can generate up to 70% return on cross-selling initiatives aimed at existing cardholders versus 10% aimed towards new cardholders. Consumers are likelier to stick with their financial institution for the long haul when they see their loyalty being recognized and rewarded. This trust forms the foundation for cross-selling opportunities.
Tailored Offerings for Cardholders
Financial institutions have many products and services, from savings accounts and investment options to insurance policies and credit lines. However, not all cardholders know these offerings or understand how to benefit from them. Relationship rewards can be strategically used to introduce cardholders to these products and services by tailoring offers to their unique financial situations.
For example, a cardholder who consistently maintains a healthy balance in their savings account could be rewarded with a special interest rate on a certificate of deposit (CD). Similarly, consumers who frequently use their credit card for travel expenses could receive exclusive discounts on travel-related products and services. Institutions can pique their interest and drive cross-selling conversions by aligning rewards with cardholders’ behavior and preferences.
Cross-Selling Made Personal
One of the challenges financial institutions face is the impersonal nature of cross-selling efforts. Loyalty programs analyze cardholders’ transaction history, spending patterns, and financial goals, enabling them to recommend products and services that are genuinely valuable.
For instance, if a cardholder frequently uses their credit card for dining out, the institution can implement a rewards campaign that offers cashback at restaurants. By demonstrating a keen understanding of cardholders’ preferences and needs, financial institutions can enhance the effectiveness of their cross-selling efforts.
Loyalty rewards are not just about pushing products onto cardholders but creating a win-win scenario. Cardholders are more likely to engage with additional products and services when they align with their financial goals and enhance their well-being, leading to increased revenue and stronger relationships.
Ready to boost cross-selling among cardholders? Connect with our loyalty experts today by contacting email@example.com or click below to get started.