According to a new study by Kehrer Bielan Research & Consulting, credit unions raised more revenue through offering investment services to their members than banks in 2013.
The Credit Union Investment Services Benchmarking Study was a survey of 905 credit unions that offered investment services. The survey found credit unions saw an increase in the number of members participating in investment business at the firm, from 2.7 percent in 2012 to 3 percent in 2013, Credit Union Times reported.
Along with the number of members participating, revenue from investment services also rose 4 percent in 2013. The average credit union generated $1,514 in revenue from investment sales per 1 million members, while banks earned $1,384 in revenue per 1 million customers.
The survey found these organizations had a 9 percent rise in penetration, according to CU Times. In general, large individual banking institutions produce more revenue from investment services than credit unions. However, based on the opportunity to earn revenue from their members, the credit unions performed better overall than banks The credit unions had a 21 percent better penetration rate than the banks, Kenneth Kehrer, a principal at KBR&C confirmed.
Importance of cross-selling
All financial institutions, whether credit unions or banks, understand the importance of cross-selling financial products. The Credit Union Investment Services Benchmarking Study is just another example of how organizations can improve their bottom line by increasing cross-sales.
Credit unions can improve their numbers even further by understanding how their members make decisions regarding new products. Most consumers will research available products before making a decision, according to The Financial Brand. Credit unions should research where their members are most likely to gather information regarding financial products and invest in creating resources in those channels. For instance, if their members are likely to look for information about products on Twitter or Facebook, credit unions should have information and links to resources about their products on those platforms.
Organizations will have better success cross-selling products if they gather information regarding their members, through member relationship management software, for example, according to Credit Union Journal. When any representative can quickly access a member's preferences and unique circumstances, he or she has the ability to recommend products that will be truly beneficial to the customer, which increases the likelihood of a sale.
Credit unions should also focus on cross-selling when bringing a new member onboard, The Financial Brand reported. When introducing a new member to the organization, the credit union's representatives have a unique chance to educate the consumer on all of the credit union's services and products.