DDM - Financial Services

Bank Uses MarketMix to Assess Branch Performance

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200 180 160 140 120 100 80 60 40 20 0 0 20 40 60 80 100 120 140 160 180 200 MARKET SHARE INDEX MARKET GROWTH INDEX 8 5 3 1 2 6 9 10 4 7 Top 10 Bank Redefines Branch Goals Based on Market Opportunity case study A leading U.S. bank needed to assess branch performance. They knew which branches had the highest Assets Under Management (AUM), but were unsure how those branches compared to competitive branches in the area. The bank also wanted to know which branches were underperforming relative to market opportunity. Objectives The bank needed an objective way to view branch performance. The firm wanted to: ■ Set realistic growth goals for each branch, based on market opportunity ■ Assess if branches were appropriately located to meet market demand ■ Optimize staff and resource deployment given market need Solution The firm used MarketMix TM to analyze branch performance. MarketMix provides estimates of the total invested assets for defined geographic areas and can be used to analyze market growth over time. By conducting a three-dimensional quadrant analysis incorporating MarketMix' market size, share, and growth data, the bank was able to plot each of its branches into one of four quadrants. The graphic below shows a subset of the analysis. Branch Performance Based on Total Assets Market Size, Market Growth, and Firm Market Share IXI TM Network Member Financial Services Firm CHALLENGE Measuring branch performance was a growing priority for a leading bank. The bank needed a way to objectively compare branches and identify underperforming locations in order to enhance its branch management strategy. SOLUTION The bank used MarketMix to compare branches by market size, share and growth data. RESULTS The firm was able to recognize fast and slow growing markets, and how branches within each market were performing based on the opportunity. SEGMENT 2 Status: Low market share in a high growth market Strategy: Add to staff and/ or add a branch SEGMENT 1 Status: High market share in a high growth market Strategy: Leverage staff and exploit best practices Market size using total market assets SEGMENT 3 Status: High market share in a low growth market Strategy: Maintain, combine branches, and/or reduce staff SEGMENT 4 Status: Lower market share in a low growth market Strategy: Reduce staff, consider closing a branch

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