DDM - Financial Services

Customer Acquisition: Reaching Profitable Younger Prospects with Precise Segmentation and Targeting

Segment your customers and prospects to optimize your marketing campaigns

Issue link: https://resources.datadrivenmarketing.equifax.com/i/920297

Contents of this Issue

Navigation

Page 0 of 2

Customer Acquisition: Reaching Profitable Younger Prospects with Precise Segmentation and Targeting case study Challenge: Increase AUM and Lifetime Value from Younger Customers Given the continuing competition to attract deposits, many regional banks are assessing the value of their customer base. Regional banks often operate in markets where the prevailing customer profile is older and less affluent than the national average. Although this customer segment represents a stable source of revenue and these customers tend to keep a higher share of their assets in deposit products, their relationships do not necessarily generate the greatest profits or promise the highest lifetime value. Thus, it is not surprising that regional banks are seeking to acquire younger, mass affluent households. In order to do this, banks must take a holistic approach to the initiative, including understanding and identifying these consumers and then reaching out to them with appropriate product, pricing, and service offerings. In addition, firms must create marketing messages that speak to the specific needs of the targeted households and deliver them via their preferred media channels. Solution: Use Asset-Based Segmentation to Identify and Reach High Potential, Younger Prospects We worked with a regional bank to help the firm examine its customer base, identify attractive new segments in its market footprint, and reach its goals of increasing AUM, profits, and customer lifetime value. The firm was focused on identifying and acquiring younger prospects with significant growth potential. Working with us, the firm learned that about 6% of its customer base was classified as younger mass affluent. However, our data classifies more than 7% of all U.S. households as younger mass affluent. The bank discovered that its customer base was not as young or as affluent as it had hoped and determined that just "getting its fair share" of that segment was simply not enough. IXI TM Network Member Financial Services Firm CHALLENGE Due to increased competition for deposits, many banks are focused on attracting new customers with the demographic and financial profiles most likely to develop into profitable, long-term relationships. SOLUTION Financial Cohorts asset-based household segmentation helped a regional bank identify and target younger, mass affluent prospects in order to meet the bank's goal of increasing customer lifetime value. RESULTS The bank was able to: ■ Allocate its marketing budget to better prospect to younger mass affluent households ■ Narrow the target audience for its prospecting campaign by 90% ■ Pursue over $54 billion in potential new assets

Articles in this issue

Links on this page

view archives of DDM - Financial Services - Customer Acquisition: Reaching Profitable Younger Prospects with Precise Segmentation and Targeting