3 Pillars of Financial Institution Success
To achieve growth, acquire customers and deliver a powerful customer experience, start with data-driven strategies and proven practices.
With markets fluctuating daily, financial institutions have their work cut out for them. Inadequate strategic focus and lack of competitive data can thwart efforts to achieve three vital objectives: Growing, acquiring customers and delivering a powerful customer experience. Here’s a look at best practices gleaned from thousands of client engagements that can provide a path forward.
In the current financial landscape, three key strategic imperatives will dominate the agendas of banking executives for the remainder of 2024: growth, customer acquisition and customer experience (CX).
Implementing these priorities necessitates unique approaches tailored to each individual institution, but there are also some broad principles that apply. We are pleased to share some valuable lessons we’ve gleaned during five decades of supporting hundreds of financial institutions.
Pillar 01 Growth Strategy: Adapting to Market Shifts
BAI.org reports a negative trend in consumer deposits due in part to economic fluctuations like inflation and the current craze for certificates of deposit. While competitive CD rates have undoubtedly attracted customers – a 6.5% APY is hard to pass up – history suggests thigs trend will eventually recede, as we’ve seen with the pandemic-driven mortgage boom. To prepare for this inevitable shift, consider these simple, yet effective action steps:
Case Study Spotlight
In anticipation of opening new branches, Webster First Federal Credit Union proactively integrated a financial services-specific segmentation system with its first-party data to better understand existing members. This insightful initiative yielded previously unknown information, uncovering a sizable demographic of mature and fiscally conservative individuals within the member base. Armed with this valuable segmentation data and member channel preferences, Webster First strategically crafted targeted multichannel campaigns tailored to specific service areas surrounding the new branches. The messaging, meticulously designed around the segmentation analysis, resonated significantly with the target audience. By the conclusion of the third quarter, deposit growth had already far exceeded initial projections, surpassing the goal by a remarkable 250%. Read the full Webster First Federal Credit Union case study, here.
Pillar 02 Increasing Acquisition: Beyond CRM Metrics
Growing the existing customer base differs from acquiring new customers. That said, marketers often approach acquisition campaigns with CRM metrics in mind, leading to unexpected and occasionally disappointing results. As Quinn Jalli, SVP of Email Products at Claritas, noted during a recent podcast interview, acquisition campaigns require a completely different set of realistic key performance indicators and the leveraging of insights gained from growth opportunity segments. Remember, prospects are less likely to “open” marketing messages but they often engage more than an existing customer once they do. Refer to the institution’s segmentation analysis: the insights used for existing customers are equally valuable for acquiring new ones.
Case Study Spotlight
When local mergers and acquisitions caused churn within neighboring financial institutions, Lake Michigan Credit Union, recognized an opportunity. Already adept at understanding the existing member base and acquiring new members in market, the credit union embarked on a “switcher” campaign. Acting swiftly, it delivered over 30,000 direct mail pieces within its targeted service area. Leveraging the intelligence of identity graph technology, it strategically linked email addresses to corresponding postal addresses, enabling a multichannel approach. This dual-pronged strategy – physical mailers followed by targeted digital outreach – resonated with its audience, yielding a post-campaign conversion rate of 8.3%, nearly double the industry average. This success underscores Lake Michigan’s keen understanding of its target demographic and its ability to utilize cutting-edge technology to effectively reach them, establishing itself as a compelling alternative during periods of banking disruption. Reach the full Lake Michigan Credit Union case study, here.
Pillar 03 Building Loyalty Through Exceptional Customer Experience
CX isn’t just a buzzword – it’s the bedrock of lasting success in the financial sector. Institutions with optimized CX witness accelerated growth, forge deep bonds with their customers and tap into a powerful source of new business: enthusiastic advocacy. So, how can the financial institution transform its CX landscape into a customer magnet?
By proactively gathering feedback, unveiling browsing patterns and embracing AI-powered personalization, a financial institution can craft a CX that goes beyond convenience, fostering loyalty and turning the existing base into ardent advocates. Remember, happy customers are not just satisfied; they become brand ambassadors, driving organic growth and propelling the institution towards lasting success.
Case Study Spotlight
Driven by a strategic objective to deepen customer relationships and expand existing share of wallet, Alltru Credit Union implemented a targeted auto loan campaign for its current members, leveraging social and digital display advertising. The internal marketing team leveraged identity graph intelligence to identify and strategically retarget website visitors whose online journeys hinted at potential interest in auto loans. The creative messaging for the campaign was meticulously crafted to resonate with these specific audiences, utilizing data on their preferred online channels to ensure optimal message delivery.
This data-driven approach yielded impressive results: Compared to the previous year, website traffic to the dedicated auto loan landing page surged by 623%, a direct consequence of the targeted retargeting efforts. Furthermore, within a mere three months, the campaign demonstrably drove over 100 conversions, highlighting its effectiveness in influencing purchase decisions and cementing Alltru’s position as a trusted financial partner for its members’ automotive needs. Read the full Alltru Credit Union case study, here.
While many successful strategies exist, implementing these initial steps can put a financial institution on the right path to achieving growth, acquisition and CX goals. Remember, adapting to market shifts, focusing on data-driven insights and prioritizing customers’ experience are key ingredients for lasting success in the financial services industry.