Or, Can the Marketing Director Be the CFO's New by ypy11747

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									 Bottom Line Marketing
   ,
 Or Can the Marketing Director Be the CFO’s New Best Friend?
 By William Andrews, SVP, Director of Marketing, BankAtlantic




T
       here has never been a better time to               Today’s advanced database management
                                                      techniques coupled with targeted
       be in bank marketing. Why would                communications plans give the marketing
       someone relish the thought of being            department a big advantage. Never before
                                                      have we had so many opportunities to
in a profession that, just 15 years ago, the
                                                      strategically pinpoint our targets and attack
biggest criteria to getting the Director of           them with such accuracy.
Marketing job was having a good dip
recipe for the next branch grand opening?                       Database Techniques
                                                          In most cases, we can use what are now         to show the value to shareholders of our
                                                      seasoned models to guide us in the anticipated     strategic plans.
    With the professional tools available today,      response. Then using per account profitability,
there is not another department in the bank that      either internal numbers or industry averages,
can show such detailed cost-benefit to bank           calculate a very buttoned down ROI analysis.                    Multiple Products
shareholders. When you boil it down, the
primary job of any CEO is to create and                   Armed with the proper database techniques,         What other manufacturer runs 150 products
communicate the vision of his or her company.         a bank’s marketing department can rival any        through the same factory and delivery system?
The CFO then takes that vision and is the             area in the bank in being able to quantify their   No wonder we struggle to truly understand what
gatekeeper for the allocation of the                  actions and the benefit to the shareholder.        our cost of goods sold might be. But as we
shareholder’s capital.                                Becoming viewed as a profit center is a            begin to offer more financial solutions that are
                                                      far cry from not long ago, when most bank          manufactured by best-of-breed providers (credit
                                                      marketing departments might have been seen         cards, annuities, mortgages, property and
                                                      as a cost center by their executive                casualty insurance, etc.), our income stream
In This Issue
                                                      management suite.                                  converts to a set, predetermined payout to the
BOTTOM LINE MARKETING . . . . . . . . . . . . . 1                                                        bank that is recognized on day one.
                                                           There is a good chance that this trend
SKIP-A-PAY PROGRAM . . . . . . . . . . . . . . . 2    will become more pronounced over time.                Yes, the times are changing, but the changes
                                                      If you subscribe to the theory that banks will     are very positive for bank marketers. There has
FREE CHECKING GOALS . . . . . . . . . . . . . . 2     concentrate more on providing financial            never been a better time to use database tools to
                                                      solutions to their customer bases, and spend
NEW BRANCH OFFICE . . . . . . . . . . . . . . . . 3   less time being the manufacturer of products,
                                                                                                         not only insure that we satisfy the financial needs
                                                                                                         of our customers, but also to be able to claim
LETTER DOC: THE CALL TO ACTION . . . . . . 4          chances are the revenue streams marketing is
                                                                                                         the status of profit center, not cost center.
                                                      leading will become more predictable than what
CUSTOMER CROSS-SELL . . . . . . . . . . . . . . 4     we have today. This will make it even easier


                                                                                                                                                               1
    Need to kick your Skip-A-Pay Program up a notch?
    By Cathy Smith, Vice President



    A
           re Skip-A-Pay response rates                                                                      By taking a closer look at past responders,
          hitting a plateau or even                                                                     it is possible to customize an offer that could
          .dropping? Perhaps taking a                                                                   be more appealing to customers.
    look at how much the fee is – or
    creating a tiered fee plan –could                                                                      Produce a simple distribution report of the
    help jump-start the program again.                                                                  customers who have responded based on the
                                                                                                        payment amount. There may be a wide range
                                                                                                        of payments anywhere from $200 to $2000!
        The three prime benefits of
                                                                                                        Why should all customers pay the same fee?
    offering existing loan customers the
    ability to “Skip” a loan payment are:
                                                                                                              By tiering the fee schedule, a customer
                                                                                                           with a lower payment is more likely to feel
         1) Customer goodwill for providing them this opportunity to            that it is worth it to pay a $30 fee to skip a $300 payment. And the
            defer a payment when cash may be tight,                             customer with a $1,500 payment is more likely to be agreeable to an
         2) Fee income (in those states that allow) for the service, and        $80 or higher fee. The specific pricing schedule that works for an
         3) Loan extensions                                                     institution can only be determined through analysis and testing.

        But some institutions that have enjoyed high response rates of a           It is worth knowing what the market will bear to maximize the
    Skip-A-Pay Program are finding these rates flattening out. This can be      benefits of this great income producer. Of course, many states cannot
    due to increased fees being charged, “overworking” the loan                 charge fees for skipping certain types of loans and the state of the
    portfolio, or run-off of the type of loans that qualify for the offer.      economy in a particular region has an impact on response. But
                                                                                checking out a segmented, tiered Skip-A-Pay Program is worth the effort.


    Free Checking Goals
    By John Scoble, Vice President



     I
        t seems like a marketing no-brainer: Increasing the number of           3) Cross-sell other services – One of the real benefits
        checking customers in a financial institution’s customer base           of establishing this new checking relationship is the
        is a good idea. However, banks should think through what their          opportunity to cross-sell new customers other
     true marketing goals are when promoting Free Checking.                     products and services they may need.
                                                                                There should be a regular program to
        Depending on the objectives, this could change how the best prospects   communicate on an ongoing basis to
     are selected – and what follow-up marketing steps are taken. Here are      suggest other savings or loan products.
                                                                                If not cross-sold, retention and a
     four possible goals to keep in mind when promoting Free Checking:
                                                                                customer's life-time value/profitability will
                                                                                suffer – with many ‘walking out the back door’ as fast as they came
     1) Increase core deposits – This is one of the traditional prime
                                                                                in the front.
     motivators in acquiring new checking accounts. But experience
     shows that customers who come in with the incentive of a “Free             4) Fee income – A significant benefit of Free Checking is the fee
     Checking plus a free gift” offer will carry lower average balances than    income that can come from this block of checking customers. History
     ‘regular’ checking customers.                                              shows this group will generate and tolerate fee income attached to
                                                                                their not-sufficient-funds and overdraft protection function. It appears
     2) Upsell checking – While prospects may be attracted to the bank          this group is not actively managing their cash flow and appreciates an
                             with the offer of Free Checking + gift, there      institution’s efforts to avoid bounced checks, and to cover them for an
                             may be another (more profitable) account           administrative fee.
                            that may better suit their needs. This                Knowing what the goals are going into a program will dramatically
                           presentation can take place at the point of          improve the chances of success at the end of the campaign.
                           sale or after the fact.

2
New Branch Office... If you build it, will they come?
By Charles E. Gross, Vice President


A
   s with any marketing initiative, a successful                            • Key/Treasure Chest: individuals receive a real metal key and are
   branch opening promotion begins with setting                               invited to see if it opens the lock on one of several treasure chests in
   objectives. It is important to understand why the                          the branch,
branch location was chosen and what senior
management’s expectations are.                                              • Instant Winning Number: the computer-generated number on
                                                                              the mailing piece must match ones posted in the lobby,
   Long before the ribbon cutting, a multifaceted program that
builds awareness, encourages potential customers to visit, and then         • Jig Saw Puzzle: each prospect receives a puzzle piece which
provides an effective sales mechanism to maximize results needs to            must be brought to the branch to see if it fits the master,
be prepared.
                                                                            • Currency Serial Number: an authentic foreign banknote is mailed
    A successful promotion operates on a number of levels. A grand            and prospects come in to see if the serial number matches those posted.
opening ceremony attended by local officials provides an opportunity
for press coverage. An after-hours reception for local business leaders                           Convert Traffic to Sales
is an excellent way to build good will. But the real challenge to getting
a new branch off to a fast start is to motivate large numbers of                Every person coming to the new office is a potential customer.
nearby residents to visit the office and open accounts.                     That’s why successful branch promotions include special product
                                                                            offers designed to encourage new account openings. These offers
                     Define the Target Market                               should be a prominent part of the mailing package. They should also
                                                                            be available in printed form at the branch to help the contact staff
   One of the first steps is to plot the branch location on a map and       initiate sales conversations.
then determine how many households live within the market area
(usually a 2-5 mile radius). In rural areas, the radius may reach out a                                              The Results
considerably larger distance. And in more
urbanized markets, the distance may not need                                                          Soon after the promotion, management will be
to be more than 1 mile.                                                                           interested in a measurement of the volume of
                                                                                                  traffic coming through the door. This is a good
     Also list selection mapping should consider                                                  indication of the public’s ability to find the office
any natural or man-made barriers that will                                                        and of the effectiveness of the marketing program.
hinder the office’s accessibility. For example, if
it is located near a river, it may not make sense to                                               Experience has shown that 10% to 20% of the
mail to people on the other side.                                                              people on the mailing list will visit the branch
                                                                                               during the opening celebration - provided the
   Once the target audience has been defined                                                   location is easy to find and the value of the prizes
on the map, it can be further refined (reduced)                                                is high enough. So a mailing of 10,000
using demographic selections such as age and income. But in most            households should bring 1,000 to 2,000 people into the branch.
cases, everyone who lives within the defined market area is invited to
the new office.                                                                Later, the numbers that management will want to see will be those
                                                                            related to new accounts. After the first 90 days, new account openings
                             Greed is Good!                                 should average between 1.5% to as much as 10% of the mailing list,
                                                                            depending on the strength of the offers and the sales skills of the
   The next step is to get the selected prospects to visit the new          branch staff. Good post-campaign analysis should match new branch
branch. The best results are obtained by using a fun, non-threatening       customers to the original mailing list and generate detailed reports,
game offering the chance to win a nice prize.                               including maps that show where new customers live.

   It is greed that motivates people to action; and a grand prize with a                       Not Just for Grand Openings
value of at least $1,000 should do the trick. Multiple prizes of lesser
value will round out the second and third prize categories. A modest           This marketing process can also be used for older branches that
prize budget of $2,000 - $3,000 should be sufficient, with cash being       are not meeting expectations and for offices that have recently been
the suggested award instead of travel or high-end electronics.              renovated or relocated. In fact, even prosperous offices can benefit
                                                                            from the new business “jolt” that these promotions provide. For more
   The game is designed to be fun for the prospects and the staff at the    details and case studies, visit www.wordcom-inc.com.
branch. Some of the game concepts that have worked well include:


                                                                                                                                                          3
    The Letter DoctorTM
    The Call To Action                                                                    for these responses: Do you want the customers to come into the
                                                                                          branch? Call your customer service center? Mail in a reply coupon
                                                                                          for more information and/or a follow-up call from you? Take the

     Y
          ou’ve made the sale! Your letter did the
          job of getting the prospect’s attention                                         time to fill out an application and mail it in? Go online?
          and motivating them to take the next
     step. Now, you need a clear and strong Call To                                                                Multiple Options
     Action, with as many options as possible.
                                                                                              Whatever your first choice is, give your customer several reply
         Frequently, letter writers leave the reader unsure                               options. Some people will have the time to fill out an application or
     what they should be doing next to get more information or to open                    come into a branch. Others will not and will want to pick up the
     an account. The ideal spot for the Call To Action is in the last                     phone or go online for faster answers.
     paragraph of the letter – after you have successfully convinced the
     reader of all the consumer benefits.                                                     Remember, the more you ask the respondent to do, the less
                                                                                          likely they are to respond. So you have a choice: do you want a
        There are two key factors: what you want the respondent to do;                    larger number of warm leads, or a fewer number of more
     and what they want to do. Actively decide on your primary channel                    motivated prospects?



    Customer Cross-Sell Corner: Equity Line Increase
    By Christopher Wachtel, President


     W
                hat are the two fastest ways to increase the volume of                    Manager, BankAtlantic (Florida). “A
               equity lines on the books?                                                 customer may have a borrowing need
                                                                                          and respond to another bank’s offer –
                                                                                          not knowing they may qualify for an
       The first is one that most banks are regularly doing: seasonal                     increase with us.”
     activation mailings to existing equity line customers. But the second
     method is often overlooked: offering selected existing equity line                      With the increase in real estate
     customers an increase in their line limit.                                           values in many parts of the country, many customers may not even be
                                                                                          aware of the potential borrowing power they may have.
       Review of equity line usage will probably show that 25-35% of all
     customers are near the maximum of their credit limit. These are                         According to Mr. Aponte, the best times to offer the equity line
     good credit risks who may also have additional borrowing needs –                     increase would be the same as the traditional activation mailings,
     and increased equity in their homes to support that need.                            when people most likely need extra cash: before and after the
                                                                                          winter holidays, tax time, and in the fall. And the uses of the funds
        “One of the prime reasons to make the offer is customer                           would also be the same: debt consolidation, home improvement,
     retention,” says Daleth Aponte, AVP, Consumer Loan Product                           and education.



    Contact your Regional Marketing Consultant Today!
                                                      Charles E. Gross, Jr  .                                    John Scoble
                                                      Vice President & Senior Database Marketing Consultant      Vice President & Senior Database Marketing Consultant
                                                      Phone: 800-822-0622 Fax: 860-872-2713                      Phone: 615-794-8309 or 800-822-0622 Fax: 615-591-9609
                                                      Email: Charlie@wordcom-inc.com                             Email: John@wordcom-inc.com

                                                      Cathy A. Smith                                             George Wachtel
                                                      Vice President & Senior Database Marketing Consultant      Chairman
                                                      Phone: 888-596-4491 Fax: 904-928-9173                      Phone: 800-828-5061    Fax: 239-591-4561
                                                      Email: Cathy@wordcom-inc.com                               Email: George@wordcom-inc.com
    To request more information about our services,
    you can reach us at:
                                                      George Wachtel                                             Christopher Wachtel
    WordCom, Inc.                                     Chairman                                                   President
    56 Main Street, P.O. Box 308                      Phone: 800-828-5061    Fax: 239-591-4561                   Phone: 800-822-0622    Fax: 860-872-2713
    Ellington, CT 06029
                                                      Email: George@wordcom-inc.com                              Email: Chris@wordcom-inc.com
    Phone: 800-822-0622 Fax: 860-872-2713
                www.wordcom-inc.com

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