Cross-Selling Called Industry Imperative.

Anchoring mortgage customers by cross-selling them an additional bank product is so important to the RBC Financial Group and its major Canadian bank, RBC Royal Bank, that it won't pay its commissioned loan originators until after the customer is introduced to bank products beyond the mortgage, according to company vice chairman James T. Rager.

Mr. Rager made his comments in a session at last week's Forrester Finance Forum here, where he told the audience that cross-selling was an imperative for his and all financial institutions.

Anchoring, Mr. Rager said, was the process of selling additional bank products to the customer. RBC's research indicates that the more bank products a customer owns, the less likely that customer is to defect.

"Anchoring is extremely important. So when we get a mortgage through a commissioned salesperson, we're not going to pay that person unless they go through a proper routine to anchor that client in the branch," Mr. Rager said. "A good predictor of defection is if the customer only has one product."

Canadian customers utilize their branches differently than Americans, he said. "About 70% of our customers go to a branch at least once every three months," he told the audience. That makes it important for bank customers to be anchored there. While the bank works to provide all the channels a customer would want to use to interact with the institution, its customer segmentation strategy works to identify those channels most likely to be utilized. Actual behavioral data is used to determine what different channels cost the bank and then efforts are made to lure customers to lower-cost channels. But, despite the fact that it costs more than the online channel or the call center, branches are very important to RBC's customers.

"In Canada, 90% of the routine transactions are handled out of the branch," Mr. Rager ...