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Leveraging Market Insights for Acquisition, Growth and Retention

August 6, 2020
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Pandemic-forced branch closings and shifting demographics have highlighted and hastened the growing need for financial institutions to leverage market insights for acquisition, growth and retention. As strategic planning season approaches, it’s important to dedicate road maps and resources to reaching your best existing and potential consumers with timely offers through relevant channels.

Building long-term loyalty and high-value brand experiences depends on:

  • The energy you insert into the market
  • The engagement you bring to accountholder relationships
  • The experience you project with each interaction

As the recent Raddon Report High Tech, High Touch in a Socially Distant World pointed out, branches are not going away anytime soon. However, the reasons consumers visit a branch will be more information-driven than transaction-driven. Younger demographics have higher digital adoption rates than older demographics, who may be the most reluctant to enter enclosed areas with one-on-one contact. Many financial institutions repurposed call center and branch personnel to proactively reach out to customers or members who didn’t have the mobile app or had little mobile activity to educate them on how to download and use the technology.

As some areas of the country see an increase in COVID-19 cases, this proactive approach will pay dividends, not just in loyalty, but in rich transactional information. Financial institutions can use this data to predict emerging consumer needs and recapture lucrative balances. Marrying survey information on mobile usage with appended data on the propensity to use a mobile wallet is a powerful intersection of market insights to acquire and retain customers or members.

Financial institutions still need to train branch employees to identify cross-sell opportunities, but the pandemic has hastened the need to leverage demographic appends, prospect lists, credit data and transactional information for cross-sales, acquisition and recapture. These tools can be the difference between motivating people versus pushing product.

Painting a Picture of Your Audience

Demographic and psychographic information are the paint and brush of audience portraits. This data helps marketers create a robust audience profile to target effectively and message relevantly. Appending age and income develops personas to help marketers better understand how to drive desired behavior for increased results.

There is a wide array of appended information available from multiple sources. Examples of basic appended data, in addition to age and income, include home ownership, marital status, presence of children within specific age ranges, level of education and total liquid assets. Institutions concentrating on lending can leverage information such as home market value, available home equity, new or used vehicle purchase, propensity to carry credit card balances, and heavy transactors. On the deposit side, this information can target consumers who have purchased, or are likely to purchase, certificates of deposits, premium checking accounts and money market accounts. As the industry’s deposit focus expands from core deposits to investments, appending information on households that hold investable assets or that are highly likely investors provides the opportunity to segment marketing investment products and messaging from core deposits.

With certain demographic appends, indices on propensity to purchase specific products can be overlaid for even greater specificity on which consumers to target for a higher likelihood of purchase. An index above 100 indicates higher-than-average propensity to hold or purchase a specific type of account or investment.

These demographic appends can also be applied to prospect lists. Financial institutions often leverage demographics as they look to deepen relationships with branches. Demographic information is an important layer when looking at market opportunities for expansion. To take it a step further, demographic information can be used to profile your “best” current customers or members to find look-a-like prospects in terms of product usage and profitability. The motivation behind this type of analysis is targeting and acquiring prospective consumers who are most attracted to the institution’s offerings and can bring balances to drive profitability.

Lists: More Than Names and Addresses

Additional tools for timely offers are lists targeting new movers into a market, premovers who are selling or recently sold a home, new homeowners, and new borrowers (people who have recently refinanced or opened home equity products). For institutions looking to preserve core deposit runoff as it passes to future generations, there are lists to identify the family members of existing accountholders. From this list, marketers can reach out to different generations with life stage-relevant prospecting messages. These lists are valuable for financial institutions seeking to grow relationships through family members of current or previous accountholders.

Triggers: Time to Load up on Credit Information

To get even more targeted and timely, monitor your accountholder base using credit bureau information. Your institution will receive a notification, or “trigger,” if one of your customers or members applies elsewhere for a real estate loan, auto loan or credit card.. Triggers are usually received within a day of application, which gives marketers time to reach out with a competing offer. Credit bureau lists also are great resources for recapture opportunities throughout the year. Leveraging information from all three bureaus at once versus using just one bureau increases opportunities for recapture. With so many virtual lenders contacting consumers today, credit reporting is spread across all bureaus, not just the one most prevalent in a particular market.

Now that so many consumers are working from home or working long hours outside the home in essential services, institutions need to be able to identify and leverage opportunities. And once an opportunity is identified and executed, it’s essential to have the tools to manage, track and measure effectiveness of marketing efforts. Remote outreach demands remote access to tools consumers need for fast, easy application, account opening and information. Merging your high-tech approach with high-touch availability, such as chat and video, brings some of that prepandemic human interaction to what we now call the “next normal” in the consumer experience.

With marketing budgets being squeezed even more amid uncertain consumer demand, leveraging market insights to identify the best targets at the best time with the best message hands institutions the competitive edge in ensuring a continued return on investment through acquisition, growth and retention.