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Deepening Customer Relationships: Marketing on Auto Pilot

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As more people nationwide get vaccinated, many customers are refocusing on their banking needs, whether it’s savings, loans for home improvements, or new cars. Developing deeper relationships with existing customers is a proven approach to increasing profitability and reducing attrition.

The goal of increasing share of wallet for existing customers through a structured cross-sell program is achievable using a marketing automation approach. What if existing customers could be offered the product they likely need the most, automatically, each month? This approach will engage customers repetitively with minimal day-to-day task burden on the marketing staff.

Many institutions rely on a “matrix” mailing program where cross-sell offers are made via traditional mail. The offers should be targeted and delivered at multiple touch points over time to enhance frequency of message. Targeting can be done using business rules selections or with sophisticated customer product profiles that predict the next most likely product purchase. Cross-sell offers should be aligned with the strategic goals of the institution. Program execution can be structured to automatically generate letter offers at specific time intervals so that the institution is continuously connecting with customers.

Targeting specific product offers to customers most likely to respond is accomplished by customer product profiling. This profile of existing customers (with a specific product) is built and other customers with similar profiles but without the product receive the targeted offer. WordCom’s proprietary modeling process, known as MicroModeling, builds this customer product profile by appending over one thousand demographic, behavioral, and lifestyle attributes. Once the model is verified, it’s used to score households within the existing customer file. The model then scores records based on resemblance and likelihood of responding to a marketing campaign. MicroModeling also determines which customers are unlikely to respond to a given product or service. This model can be further enhanced by appending specific demographic, affluency, and credit risk data to the household records.

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A multi-segment program should use all communication channels available. With the mail as the centerpiece of the program, email should be used in tandem with the letters, reinforcing the offer before and after the mail is received. Likewise, digital marketing involving social media follow-up keeps the cross-sell offer in front of customers.

Understanding the results of a cross-sell effort is important for evaluating the organizational impact of the mailings and to make adjustments to improve results. Direct responses (customer opens the product/service offered) are critical, as well as purchase responses (customer opens a product/service other than the one offered). Understanding open rates, balances generated, and the ROMI will help assess the program’s profitability. Segment offers and selection criteria can be adjusted as needed on an ongoing basis.

Bank marketers looking for a way to increase products/services per household while driving customer retention and profitability can accomplish both objectives with a robust cross-sell program.