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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
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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.
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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:
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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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