Boosting CRM Profitability By Initiating, Coordinating And Closing Referrals

BY MIKE KOZUB

Cross selling technology is a customer relationship management (CRM) basic, but too often it's focused solely on direct marketing. A database guesses the next most logical product a customer will buy, and the customer receives a call or mailing. While this is an effective start as a cross sell strategy, people often overlook the referral opportunity that resides outside the marketing database in an everyday 800-number sales call, customer service inquiry or live interaction.

Opportunities are especially rich in a company that offers many different products, each requiring individual expertise to sell, or where there are many separate lines of business sharing a common customer base. To understand how you can leverage your sales force and other customer-facing employees to succeed in cross selling today, I will discuss four aspects of a successful cross sell program:

• Initiation of referral cross sell opportunities;
• Coordinating opportunities across channels and distributed sales forces;
• Cross sell technology requirements; and
• Best practices: Case study on cross selling.

These are keys to selling more within divisions, and best practice players are finding them critical to selling across divisions as well.

INITIATION OF REFERRAL CROSS SELL OPPORTUNITIES
Consider the financial services industry as an example. Since financial products and services are largely event-driven purchases, and are considered carefully before they are bought, finding customers who are ready to buy at any given time is a challenge. So when customers present themselves as "ready to buy," it's critical to act immediately, suggest complementary products and connect (refer) the customer to other agents as necessary. Let's now briefly look at two different types of cross sell initiation and referrals.

Inbound agent to outbound agent
A call center in a retail bank, for example, might have agents whose expertise lies primarily in one of three different areas -- debit cards, checking/savings and CDs. Let's say the agent who handles checking needs to make a warm transfer to an agent who handles CDs -- but can't because the CD agents are all busy and the customer doesn't want to hold. What the bank needs is technology to capture and route that customer information to the CD agent, then monitor, manage and track its progress -- while compensating the agent who forwarded it.

Inbound agent to live sales person
Let's say that same checking account agent is able to discern that a customer is in the market for mutual funds and needs to transfer the customer to a salesperson in the next 24 hours. An agent with a lot of initiative can dial around to identify the right sales representative and refer the customer. Most agents are too busy, aren't incented, don't know where to send the opportunity and end up letting the sales opportunity walk out the door. What the bank needs is the means to automatically deliver the customer information to the right sales representative for follow up without needing to know exactly where or to whom to send it, and without changing the way agents work.

To ensure employees listen closely for cross sell opportunities, it's important to incent employees by giving them a commission on referrals they generate. Some top-performing companies let agents monitor the status of all their referrals on a dashboard GUI so they track the progress.

After referral initiation comes coordination. Companies can gain a distinct competitive advantage during the cross sell referral coordination phase. During this phase, cross sell opportunities can be enhanced with data to improve their quality. Companies can append customer, product and service information from their own data warehouse, overlay it with third-party information, including Acxiom or Dun & Bradstreet data and attach key selling messages and training materials to aid follow up. The next step is prioritizing these opportunities based on sales potential and assigning them for immediate follow up. These steps boost the confidence of the receiver of the referral, since they know they have significant information and sales tools to help them close the opportunity. Careful coordination also eliminates confusion by preventing companies from using too many methods to pitch customers with the same offer.

CROSS SELL TECHNOLOGY REQUIREMENTS
Now that we've seen how cross selling can work, let's take a look at some of the technology requirements for successful cross selling:

• A comprehensive database that provides a deep understanding of each customer.
• An enterprise-wide cross sell system that drives user confidence and behavior:
    -Without changing the way people work;
    -Supported by incentives; and
    -With an ability to monitor, take action and measure results in real-time.
• Delivery mechanism to get the right message by a trained representative at the right time to the customer. The message should be:
    -Ranked and prioritized;
    -Relevant, enhanced with customer information; and
    -Delivered by a trained professional.

So where do cross sell best practice players begin? And where does technology fit? By examining best practice players in financial services cross selling -- including Wells Fargo, Charles Schwab, Fidelity and MetLife -- some common patterns emerge. These firms all seem to share the following guiding principles. They:

• Make it easier for customers to do business;
• Make it easier for staff/agents to do business;
• Create a business system focused on the highest-value cross sell opportunities;
• Test, track and learn to determine what works, with fast recalibration cycles; and
• Operationalize activities that work best, so they become self-sustaining.

The case study example that follows reviews how these guiding principles were translated into a new cross sell game plan at one of the largest financial institutions in the United States.

Challenge
The institution's diverse lines of business include consumer, small business, retail brokerage, mortgage and wealth management, each represented by a separate sales force and call center. These lines of business represent a lucrative cross selling opportunity, but also a complicated collection of relationships to manage. The institution needed to find a way to drive revenue growth across lines of business, especially among core customers, in a coordinated way.

Critical Requirements
The solution needed to fit easily within the existing systems environment and marketing and delivery applications. In other words, the solution needed to become part of the plumbing, not a separate, discretionary appendage. Additional prerequisites that were vital to the company in realizing its cross sell vision included:

• Capitalizing on customer event triggers and campaign prompts;
• Capturing inquiries from customer dialogs and online transactions, and delivering them in real-time across sales channels;
• Enhancing and prioritizing sales leads most likely to close;
• Integrating with multiple sales force automation solutions, desktop configurations, and online/self-service delivery systems; and
• Creating a centralized database that can be shared by constituents across the enterprise.

Test and learn to determine what works
In essence, the system had to support the new business processes in a way that was transparent to all parties involved. The originator of the referral needed to know who was following up and where it stood. The sales force needed to know who sent the lead, as well as information about the customer need. Managers needed to monitor referral activities and the sales pipeline. And the marketing team needed to see how their campaigns were working across channels.

Solution
After an extensive product review and evaluation process, the company decided upon a cross selling solution that was uniquely capable of bringing central marketing/business intelligence resources to customer contact channels without changing the way people were working. And from a customer experience perspective, customer contact staff had a new way to navigate the breadth of the organization and communicate across business lines as never before.

Results
The institution maximized relationship profitability by giving customers access to its community of experts from any location and through any bank representative. Its customers now enjoy a consultative relationship with their representatives in which their financial needs are identified and promptly fulfilled. With tens of thousands of employees enterprise-wide, the agents and representatives will no longer need to know the salesperson for a particular territory, since the system automatically delivers the cross sell opportunity to the most appropriate channel or
salesperson and engages the sales force automation systems to complete the processing of the opportunity.

After implementing the system and following these principles, the company was able to grow its cross sell ratio to 3.6 products per household (from 2.8) in the past year, and is on a trajectory to achieve best-in-class performance. The institution ultimately expects to create an enterprise sales approach by connecting all customer touch points -- from Web site to bank branch to ATM -- and all lines of business. This automated, interconnected cross-selling environment will further increase sales lead volume and conversion rates.

Progressive, intensive cross selling approaches like these are essential for survival in this economy. They seamlessly link people, business processes and data across the organization and empower your agents with the tools that inspire confidence, providing visibility the whole time. This approach makes it easy to act on behalf of your customer, which will not only increase revenue, but also customer satisfaction.

Mike Kozub, with 15 years of corporate strategy, marketing, and executive management experience, is currently the vice president and CMO of MarketSoft, a provider of Marketing Process Management software that drives new sources of revenue by connecting marketing activity with sales results.