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Understanding customer primacy can drive revenue efforts

Banks believe they have many more primary relationships than they actually do, which provides a false sense of accomplishment.

Jun 13, 2022 / Consumer Banking

The lack of a standard definition of customer primacy in financial services today leaves most banks unable to achieve true relationship primacy, much less use it as a revenue driver.

Some banks define primacy based on a threshold number of products a customer has, while others try to create a “one-size-fits-all” definition based on product mix or transactions. Because of these too-broad definitions, banks believe they have many more primary relationships than they actually do, which provides a false sense of accomplishment.

Banks with a more accurate definition of customer primacy can see their opportunities clearly and are able to actively use it as a key revenue-driving metric.

The crux of the issue is that most banks view primacy as a binary designation, rather than as a continuum. A customer can have multiple products with a bank and not consider it “their” bank. And while an account with lots of transacting activity is an indictor of the bank’s utility to the customer, it does not necessarily indicate primacy. Rather, each of those approaches is a stepping stone to understanding a customer’s degree of primacy. They areas clues to how primary the bank is for the customer.

Shifting to this non-binary mindset helps bankers to better understand the customer lifecycle and encourages them to seek opportunities that move customers toward greater primacy. To do so, bankers must be able to analyze their customers’ product usage and transactions – a challenge at most banks.

The ideal way to overcome that challenge is to provide them with simple data that shows how the customer uses the bank, layered with profitability information. These efforts can be enhanced with artificial intelligence (AI) to eliminate the manual processes used to determine primacy today and can be used to create playbooks that extend customer life spans and raise lifetime profitability.

According to an internal analysis we did at White Clay,  based on the broadly held but flawed understanding of primacy, most banks on average have six months to establish primacy for a commercial client and half that amount of time for a retail customer. While initial onboarding will always be a critical part of the customer lifecycle, thinking of primacy as a continuum extends that window, perhaps indefinitely.

There’s tremendous value in having a primary relationship with a customer, as they typically generate an average of 3.2x revenue and 8x lifetime value. Bankers have a short period of time to make rapid gains early in a relationship but should never stop looking for ways to provide personalized and value-building solutions in an effort to develop primary relationships, which is why an established playbook and education is an important part of driving those efforts.


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These materials are used to inform and coach bankers on how to execute potential opportunities. Bankers should be able to view each individual relationship and their unique financial situations, rather than view customers as segments. Successful playbooks will include common recommendations and scenarios specific to the relationship, providing guidance on how a banker can talk to this individual based on their financial needs.

Bankers who have a detailed view of their customers and designated playbook will have the confidence and insight needed to have more meaningful conversations. They will also have a better understanding of how the bank defines a profitable relationship versus their own definition, further ensuring alignment and standardization across the organization.

Understanding the continuum of customer primacy is a key way banks can make the most of their new and existing customer relationships and drive significant revenue returns. Bankers need to have the information at their fingertips to easily engage with customers and have more impactful conversations, helping them improve their financial health with the most relevant products and services.

It’s time bankers know how many primary relationships really exist at their institution today, so they can create more profitable and longer-term relationships.

Scott Earwood is the director of bank solutions at White Clay.