How To Effectively Use New, Closed Account Research

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New account research is important. It determines where members are coming from, how they learned about the institution and why they joined. In the form of awareness and marketing surveys, it can assess consumers' awareness of the institution's brand identity and their eligibility for membership.

A great benefit of new account research is that it often reveals new channels for attracting members. "Build it, and they will come," for example, has proven ineffective, as evidenced by the generally slow growth following a change to community charter. Researching new members can help direct more effective targets and marketing for community growth.

Measuring members' perceptions can also enhance online bill pay growth. For example, one credit union significantly increased its online bill pay penetration by inviting members and prospective members to bring in their bills and meet with a service rep who sets up online bill pay with them. The setup program not only attracts new members, but succeeds in retaining them since consumers are unlikely to change financial institutions once the bill pay relationship is established.

Closed account research is best understood with the metaphor of a tire. Do members leave for less actionable reasons (the over-inflated tire) such as life changes (moving or death), or due to a preventable leak (service or pricing issues)? One institution discovered that it had failed to take steps to retain the personal accounts of business account holders. It had not solidified its very profitable business relationships by offering incentives to business account holders for maintaining personal accounts. Without these pricing advantages, consumers took their personal accounts elsewhere and their business accounts often followed. Fixing this simple leak significantly increased retention.

Survey new account holders quarterly or monthly to determine why they opened their accounts and to assess marketing effectiveness. Closed account research should be conducted at least annually, or every six months if there is an apparent leak. Always track results to create a baseline and then trend them to measure success in addressing the problem.

Neil Goldman is President of Member Research. He can be reached at (310) 643-5910 or by email at ngoldman

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