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OBJECTIVE:
Households that are in the "A" profit group
generate $500
or more per year in profit and account for a major part of an institution's overall profit.
Therefore, retaining A households is a very good idea
that makes solid business sense. One way to do
that is find those A households that do NOT have any
direct deposit in place, and focus on getting them set
up with it. Direct deposit is a wonderful way to
strengthen the relationship. The
query below looks at three different points, two of
which are Activity specific. First, use the
Direct Deposit flag, which has either a Yes (true) or
No (false) value, to find those households that do not have any
direct deposit checking accounts. Next, check
the average number of transactions per month for the
checking account and only use those that have 10 or
more transactions per month. This ensures that
the checking account is being actively used and may
well be the primary checking account for the
household. Finally, check household
profitability and set to allow only A-rated
households. Run
the query at the Household level. 
In this example 397 matching A households were found,
representing $670,000 in annual profit.
IDEAS:
-
Offer
a discounted loan rate to those A households that
sign up for direct deposit. One institution
that tried it found that despite the below-market
loan rate, the overall household profitability
increased. Not only does this encourage the
A household to set up direct deposit, but also
encourages them to get a loan.
-
Considering
the value of this group, do everything you can to
make the signup process as easy and simple as
possible.
-
Offer
an incentive such as cash paid directly into their
checking account each month. For instance,
if you offer a $50 incentive, pay $10 each month
for five months and make sure you show it on their
monthly statement in a way that makes the customer
feel valued by your institution. Offers
vary, and may go as high as $75 for direct
deposit activation.
CAVEATS:
Check to make sure your state or charter does not have
any rules prohibiting cash incentives, or places
limits on the amount of incentive.
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