DDM - General & Digital

Improving Customer On-Boarding Leverage Financial Insights

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Improving Customer On-Boarding: Leveraging Financial Insights to Assess Customer Opportunity from Day One case study Challenge: The Perils of an Incomplete Picture with Traditional Customer On-Boarding Effective customer on-boarding continues to be a challenge for many banking institutions. Banks have a very limited window to engage new customers, increase new account balances, and grow share of wallet before households lose interest in the many new customer communications and offers being sent their way or switch to another bank entirely. However, this short grace period is the optimal time for banks to establish long-lasting and profitable relationships with new customers. In the crucial first year of a relationship when the customer is most inclined to develop a positive or negative brand experience, a bank is least likely to possess the necessary data to accurately engage a customer according to his or her true wealth. For some new accounts, banks typically only have information on initial opening balance; many banks rely on this extensively to assign treatment groups and decide which new customer should receive premium offers. However, the initial balance amount can be misleading as some consumers open new accounts starting with a relatively low balance, perhaps to take advantage of a special offer or to begin a new, low-dollar amount direct deposit program. Opening balance often does not present an accurate depiction of households' wealth and growth potential. As a result, potentially high opportunity customers may be placed into sub-optimal treatment groups and upsell opportunities are lost. Banks require additional information to effectively identify high opportunity customers from day one in order to appropriately distribute resources, grow deposits, and increase share of wallet. Solution: Find the Opportunity at Day One Banks and other financial services firms can use IXI TM financial measures to gain insight on new customers from day one. Based on approximately $10 trillion in anonymous, direct-measured TM assets provided by over IXI Network Member Financial Services Firm CHALLENGE Banks often rely on the opening balance of new customers to determine new customer treatment groups, which may result in missed cross-sell/upsell opportunities and attrition due to lack of information on households' true growth potential. SOLUTION Banks can utilize WealthComplete estimates of total household assets and deposits to identify high potential new customers from day one and benchmark the expected share of wallet that can be achieved within the first years of a new relationship. RESULTS An analysis shows that by better identifying high potential new customers on day one, within two years banks can expect to: ■ Increase balance amounts for high potential new customers over 200% more than for low potential customers ■ Grow AUM by approximately $50 million for every 1,000 customers it brings on board

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