Two current trends are presenting you with ample acquisition opportunities. They are: 1) Bank switching; and 2) Multi-banking.

As you actively pursue consumers who are thinking of changing or expanding their banking relationship, be sure to remember these other important “twos”:

Two in 10 Consumers

Of U.S. consumers who switch financial institutions, about 20 percent do so because of life circumstances, according J.D. Power and Associates. Changes such as relocating, marrying or divorcing -- rather than dissatisfaction over fees or service -- prompted this group of people to seek a new banking relationship. Make certain these “life circumstances” consumers are a priority segment in your targeting strategy.

Two Banks

Consumers generally consider two institutions before making a final banking decision. To become one of the two, you’ll need to be top-of-mind with the consumer.

If you lack high branch-density, optimal locations, and extensive multi-channel advertising, then targeted direct mail and social marketing becomes critically important in reaching the “life circumstances” consumer.  

Your acquisition strategy should involve dripping on high propensity households with a series of multi-touch, multi-channel campaigns. If you handle this correctly, you can achieve response rates that hover near 2 percent even after as many as 10 touches.

Two Lists

In direct marketing, the list is everything! The best practices approach is always to run two lists, meaning that each time you create a mail/contact file, you should remove a random sample of the file and make it your control group. Use the control group to experiment with variables that will continuously improve lift and marketing ROI.

Two Mindsets

To improve your marketing results even further, consider integrating breakthrough mindset information. Research funded by Deluxe shows that the way U.S. consumers feel about their banking relationship falls within two broad mindsets. There are those who just want you to “eliminate barriers” and let them access their money how and when they want it. And there are those who have “jobs to be done” and they “hire” your products to help them achieve their goals.

For example, people who are time-challenged or go crazy sitting in traffic might consider hiring the carpool lane – and paying a user fee – to help them get to work on time. The job to be done (on-time arrival), in spite of constraints (oversleeping, no clean socks, traffic accidents, rush hour), has value and is worth the extra cost. Others would never dream of spending their money this way.

Right now, banks and credit unions are experimenting with language, offers and marketing approaches that figure these mindsets into their segmentation strategies.

Two Anchors

Once you’ve invested money and time in acquiring new households, it is devastating when a third of the new accounts go inactive in the first 90 days. This attrition most likely happens because the onboarding process has failed to anchor the consumer financially and emotionally.

Financial – Your attrition rate will plummet to less than 8 percent if you can secure direct-deposit into the account. And it will plunge to about 3 percent if you combine direct-deposit with a pre-authorized bill or two. To help facilitate this process, consider providing a switch solution that combines technology and a highly trained personal attendant to bear the work load and seamlessly orchestrate the transition from the old account to the new one.

Emotional – Your attrition rate will also improve if you have provided an experience that feels welcoming, and shows the consumer that you understand what they value. Having a personal attendant handle the account switch is a giant step in the right direction. However, the consumer must continue to see value beyond the honeymoon phase. Wise institutions invest in decoding and delivering the proper value quotient.

What To Do

To ensure that you are well equipped to take advantage of the bank-switching and multi-banking trends – and keep your own customers from moving – gather your brain trust and ask:

  • How can we make our marketing more timely, relevant, memorable, and actionable?
  • What can we do to tie together acquisition, onboarding and anchoring?
  • How can be become and stay the consumer’s primary institution?

With the right planning and approach, it is possible for some institutions to achieve a twofold- increase in response and ROI without doubling their budget. That is our hope for you, too.

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