The financial services industry is continuously evolving, and it is essential to optimize collections strategies to maintain liquidity and minimize risk. One of the most critical choices for credit un...
It is a well-known fact that it is more cost effective to market to your existing account holders than to go after new ones. In fact, according to OutboundEngine, “The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.”
When it comes to selling property, casualty, or life insurance, your financial institution has a unique opportunity to cross-sell to your existing clients. Those borrowers have already placed their trust in your institution, so they are a ready market for complimentary insurance products.
In this blog post, we’ll give you three highly effective strategies for cross-selling insurance and loan protection products at your financial institution. And, of course, we're basing our comments on the assumption that your financial institution has the right licenses in place to offer these products!
1. Pay attention to your account holders’ life events.
Good salespeople at financial institutions get to know their borrowers on a personal level. They know if their borrower gets married, has children, or retires. They not only stay informed of these major life events to build rapport and a strong relationship with their account holder, but they also understand the value of cross-selling to meet their clients’ changing needs.
If you learn that your checking account holder got married, you can offer him or her jewelry insurance for their new wedding ring, or a new auto insurance policy that would include their spouse's vehicle. If your borrowers have their first baby, you can offer them a life insurance policy. With almost all of your account holders’ life events, you have the opportunity to offer, and potentially cross-sell an insurance product.
2. Turn service calls into sales calls.
If one of your borrowers calls or stops by your institution for account servicing, such as a name or address change, you have the opportunity to discuss an additional insurance product with them. By navigating their profile, you can see what products they currently have. Take the opportunity while they're in front of you or on the phone, to offer insurance products that they may be missing.
Did you know that many Americans either don't have adequate life insurance coverage or don't have any at all? In fact, according to PolicyGenius, only 54% of American adults have a life insurance policy. On average, a healthy, 30-year-old male can get a 20-year, $250,000 term life policy for approximately $160 a year, or about $13 a month.
Service calls are a prime opportunity to give your account holders a positive customer service experience and to offer personal insurance products that could have a positive impact on their lives and give them peace of mind.
3. Offer insurance at the close of every loan
Insurance and loans go hand-in-hand. Insurance should be offered at the close of every loan you sell. From auto loans to home loans, and even business loans, there are multiple insurance products to offer. Not only do they protect your borrowers' investments and generate fee income for your institution, but quite frankly, it’s a comfortable discussion. If your borrower already trusts you for their home or auto loan, why wouldn't they trust you to provide them with adequate and affordable loan protection products?
Related Reading: How to Increase Non-Interest Income for Your Financial Institution
Cross-selling insurance products to your existing account holder base benefits both parties involved. Your borrowers benefit by having insurance products that could potentially save them money while giving them peace of mind. Your institution benefits by building member loyalty, and ultimately, increasing non-interest income.
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