Five principles for systematic account growth

To start, banks must have continual proactive outreach to credit-active customers to make sure they’re top of mind when those customers are shopping.

If only businesses could put an “open” sign on their door and be guaranteed a flood of customers would show interest in their products and services. Unfortunately, the competitive landscape is not that simple.

Today, there are more options than ever and mindshare is hard to come by – even some existing customers won’t automatically grant your bank a “first shot” when new needs arise. This may be because they didn’t know you offered the product or service, or that a competitor reached out to them and positively impacted them in their time of need.

Here are five high-level insights for these changing times to help banks adapt their strategy and open up a systematic growth mindset.

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Customers’ credit needs aren’t tied to your marketing calendar

When considering loan growth strategies, banks must keep in mind that customer needs change with the cadence of their lifestyles. Borrowing needs tend to be distributed evenly throughout the year, with more than two million households self-identifying as prospects in any given week – and this represents only a fraction of the real opportunity.

Additionally, there’s a decline in the inclination to buy from a given source based on the time between outreach and actual need. This demonstrates why banks must have continual proactive outreach to credit-active customers to educate them on how the solutions offered best serve their needs. Doing this will enable a bank to be top of mind when the customer is actively shopping.

Proactive cross-selling is the best retention tool

Customer acquisition must be strategically planned, but banks would be remiss to lose sight of properly serving existing customers. The higher the attrition rate of current clients, the more customers must be added to achieve growth. It costs more to attract a new customer than to retain an existing one, plus current customers are the most efficient candidates for additional sales.

One of the ideal times for cross-selling is within the first 12 months of a new customer relationship. Ongoing interactions generate a wealth of data, making it easier to discern the needs of these customers and respond with relevant offers. To cross-sell, institutions must create loyalty by offering a superior experience when offering the first product. Waiting until a customer already has a foot out the door to act is ineffective retention management.

“In-market” prospects can self-identify

Financial institutions have to find new ways to generate leads as the market changes. There is an opportunity cost associated with every conversation that once took place in a branch that is not happening today. Banks should create new feedback loops that are aligned with the preferences and lifestyles of today’s consumers.

It’s paramount that they form a strategic digital-marketing strategy to create and reinforce brand and product awareness in target segments, while simultaneously enabling dynamic outreach and facilitating consumer interaction awareness. This will allow banks to collect and track ROI data to fuel future campaign performance, including the conversion rate between engagement (clicks) and response (actual accounts opened).

Onboarding is about more than digital banking

Cross-selling to existing customers is a good way to generate sales, as long as the customer is happy with the relationship. Customers are typically more receptive to additional offers within the first 12 months of their banking relationship – this reinforces the importance of a seamless onboarding experience.

While ensuring that new checking households connect to mobile channels is fundamental to onboarding, there is a more significant opportunity to capture wallet share by addressing a more comprehensive range of customer needs. New customers have widely varying sets of financial requirements. As such, a one-size-fits-all approach to onboarding is suboptimal. Banks should educate new customers about checking, loan or wealth offerings based on analyzing their data and determining their needs.

Play for base hits, not just the occasional home run

The home-run campaign strategy invariably relies on thinner margin/lower profit product offers with expanded audience selection that delivers diminishing returns. Incremental advances (like stringing together singles and doubles in baseball) and “always-on” marketing often prove more effective and profitable than a small number of significant events. More targeted/more frequent is more effective.

To remain relevant, maintain market share and sustain growth, banks should commit to the discipline of data-driven personal outreach. By keeping these five fundamental principles in mind, banks can also leverage data to open new doors.

Tim Keith is CEO at Infusion Marketing Group and Robert Koehler is executive vice president at Strategic Resource Management.