Because of the economic downturn and new regulations, it's
never been more difficult for banks and credit unions to grow revenue streams.
It's even more difficult without a perspective that provides a clear
understanding of account and client value.
Behavior-based value is a vital component in the sales and
marketing planning process in this brave new world. The behavior-based approach
reflects how individual clients actually use the accounts and
services they own with your organization...the balances they keep...the
interest they earn...the fees they pay...their channel-specific transactions.
This methodology achieves results that are straightforward, provable and
actionable. And with these results you can quickly and easily determine
both what a client's value is as well as why accounts
and customers are profitable or unprofitable.
Focusing solely on more traditional metrics like balances or
cross-sell ratio often obscures key conclusions – impacting the success of your
revenue improvement plans. For example, you may discover:
with substantial deposits can be a significant drain on your bottom line
least profitable clients often have as many services as your most
will have two distinctly different types of high value clients – and the
strategies you employ for each group should be drastically different
The ultimate objective of a well-designed model is to
provide clear direction on how you can enhance your bottom
line. You'll uncover winning strategies for priority client clusters,
Focus on maintaining clients who provide 80, 90, or 100% of your company's
Pinpoint profit-based initiatives to strengthen ROI
Explore cost/benefit trade-offs of various approaches
Target efforts on demographic profiles producing superior results
Evaluation: Observe the contributions of clients aligned with various
business units to help direct service and staffing
Everyone is working with more limited resources these days.
By adding a comprehensive value perspective to your strategic planning process
you'll compete more effectively by knowing where to focus those resources to
achieve the strongest payback.
Patricia F. Donahue will be speaking on this topic at our
May conference on Thursday, May 12 at 4 p.m.