How To Use Cross-sell and Up-Sell Effectively At Your Bank

Cross-sell and Up-Selling

U.S. airlines carried more than 743 million passengers last year to cover some 840 billion miles during which time they fed an estimated total of 12 bags of peanuts and 7 bags of pretzels. We are not against paying for food, but let’s have something more than Pringles and $12 boxes of assorted travel sized food items that we are certain are leftovers from Jetro Cash & Carry. We bring this up because while the airline’s effort in cross-sell and up-sell leaves much to be desired, bankers should understand the difference between cross-selling and up-selling because the travel industry is well on its way to perfecting both and it will be a trend in banks in the next several years.


Up-selling and cross-selling are starting to make a difference in banks looking to expand products to current clients. The two are often confused and at a recent banking school, were used interchangeably which resulted in even greater confusion.


The Cross-Sell


In the airline industry, when United Airlines wants you to purchase that chicken wrap sandwich with the pink mystery sauce - that is an example of cross-selling. One of the most common cross-sells in banking is for customers that open a checking account to get a debit and/or credit card. This cross-sell generally triples the profit of the account and forms the basis of most banks’ efforts. This is good cross-sell. Unfortunately, another common cross-sell is when a customer opens a checking account and is cross sold CDs. Depending on how the CDs are priced, this generally results in lower net profit for the bank and is an example of poor cross-selling. Cross-selling investment services, mortgages, cash management products are just some of the more common bank cross-sell tactics that generally result in slightly greater lifetime value.  


The Up-Sell


Upselling is when Delta wants to charge you $319 to move into business class for that three hour flight. This might be worth it just to have a warm meal and to have a reclining seat without someone putting those Knee Defenders in so this extra cost might be worth it. Instead of selling another product, ups-selling is the art of selling a higher-end version of the product the bank client came to transact. Moving from a basic to a Gold-type checking account is the most common up-sell in banking and results in about double the profits.


Sales Management


If your staff now understands the difference between cross-sell and up-sell in your bank, next it is important to understand how to present both. When cross-selling, the banker highlights a clear need that the customer has and fulfills that need by recommending an additional product such as ID theft protection. Up-selling, however, is a less need-based sale technique and relies  more on emphasizing  additional value for a greater price.. In up-selling, qualifying questions revolve around the individuals’ or businesses’ future needs and their banking style.  For example, a customer may not see the need for a VIP Checking Account at first, but when they learn that it will save them money on wires, mobile payments, and overdraft protection and other items now and that given their recent growth of items processed, they will save money in the future, the product will sell itself.




It is important to remember that both cross-selling and up-selling not only results in greater monthly revenue, but also greater retention which increases lifetime value. In addition, both cross-sell and up-selling impacts performance (either positively or negatively) in such areas as interest rate sensitivity, optionality and satisfaction.

No matter what the case, calling officers, universal bankers and tellers must be sure not to just list attributes or consult brochures about details of certain products. Training staff in the intricacies of the products and how to cross/up sell is key.  The goal is to tell a story or paint a picture of the value that the customer will receive allowing the customer to visualize themselves using the additional products or  higher quality products.


In either case, bankers should understand the difference and be able to present the additional value in such a way that is the opposite of Spirit Airlines. Our first and only flight, not only did we get charged for having a “pre-reclined seat” (i.e. non-reclining), but we got cross-sold on the Pringles, water, the ability to carry on two pieces of “personal luggage” and a $15 charge for just having confirmed seats. These tactics may have increased Spirit’s revenue stream, it substantially shortened our lifetime value - we will never make that mistake again.