feature / cross sell Revenue plus Story / Jessica Darnbrough
okers that don’t cross sell run the risk of missing out on revenue and losing market share AustraliA’s mAjor banks have since last year been engaged in a bitter price war and are hungrier than ever for business, going head to head with the non‑major and non‑bank lenders to secure clients. While competition at this level is, arguably, good news for brokers and their clients, it also puts pressure on the third party channel to have something – a value‑add – that differentiates its services from those offered by the banks. That ‘something’ may well be cross selling and brokers who are able to do more than just secure a residential loan may find they also secure a client for life in the process. According to Ballast’s general manager, Frank Paratore, Australia’s lenders will stop at nothing to generate additional business. “Brokers who do not cross sell run the risk of losing their clients to the banks,” he says. “While some brokers are hesitant to cross sell additional products, the banks are not. If a bank starts cross selling to a broker’s client, the broker has less chance of retaining that client long‑term.” A mAjor benefit Client retention is one of the biggest benefits associated with cross selling, according to Connective principal Mark Haron. Mr Haron says brokers who cross sell two or three products will build strong client relationships, which is critically important to a brokers’ success. “In today’s market, with the property market flat, brokers need to ensure the service they provide their clients is good enough to keep them coming back time and time again,” he says. “At the end of the day, repeat business is a broker’s bread and butter.” House + Home Loans’ owner Rael Bricker agrees, which is why all his brokers actively cross sell. Mr Bricker says that to provide the best financial advice and best service, brokers have to offer products to complement their mortgage products. “I believe it is part of our responsible lending obligations,” he says. “Brokers who do not cross sell are not successfully fulfilling all of their client’s needs. In my experience, I have found brokers who do not successfully fulfil a client’s needs, do not receive any repeat business opportunities.” In other words, the client is likely to find their way back to the bank and out of the broker’s hands. It makes good business sense, according to Mr Bricker, for brokers to cross sell, whether they complete the additional services in‑house or outsource the work. “The more products you cross sell to a client, the stickier that client will be and the more income you can earn,” he says. “if a bank starts cross selling to a broker’s client, the broker has less chance of retaining that client long‑term” “When we cross sell insurance, we can earn up to $1,000 from each client. It might not sound like a lot, but it all adds up.” Additional income is another benefit closely associated with cross selling. The more products a broker cross sells, the more income streams they add to their business. branching out / 09