5/14/2009
A 2009 study shows community banks see growth in deposits as a result of new customer acquisition. But your newest customers are twice as likely to leave, taking their deposits with them. Are you using the right tools and processes to keep these new customers?
We Have Some Good News and Some Bad News ...
We Have Some Good News and Some Bad News ...
For community banks and regional banks, the good news - and this is very good news - is that these banks are acquiring new customers and deposits as individuals and businesses everywhere seek a safer haven for their money. A new report from Aite Group, LLC shows that 55% of bank respondents indicate they see growth of deposits as a result of new customer acquisition. And there are more encouraging figures, as shown by the responses to the study, detailed below.
2009 Study: New Customers Leading Growth of Deposits
Q: Which of the following new opportunities is your organization seeing as the result of the financial crisis?
- 55% - Growth in deposits as a result of new customer acquisition
- 51% - Growth in deposits as a result of existing customers maintaining higher balances
- 41% - Better positioning your bank to compete with larger banks
- 36% - New opportunities to grow market share within your geographic footprint
- 29% - Growth in business deposit accounts
Source: Aite Group, ICBA
But Here's the Problem ...
Now for the bad news: attrition rates during the first three months of an account's life span are up to two times higher than for accounts six months old or older (Source: BAI, The Quest for Deposits). What should your community bank do when you know you have new customers who are twice as likely as existing customers to walk out the door in the next 90 days?
On-Boarding Helps Keep Those New Deposits
Fortunately, there are actions you can take. According to Bruce Clapp, "...the single most effective way to enhance the 'new' customer relationship and maximize lifetime value is to have a consistent on-boarding process" (ABA Bank Marketing magazine, October 1, 2007).
On-boarding is the process of acquiring, accommodating, assimilating and accelerating new customers.
We at SEDONA Corporation couldn't agree more with Mr. Clapp. We have seen how one of our community bank customers improved new customer retention by 6% by implementing a simple and easy on-boarding process. Our analysis shows this improvement generates $175,000 in additional bottom-line profit annually for our client with absolutely no additional cost to the institution.
But a typical community bank needs appropriate technology to support a consistent on-boarding process that will have the right bottom-line impact.
The On-Boarding Effort Pays For Itself
Are you ready to increase your retention of new customers and bring in additional profit to your bank? SEDONA CRM is software, services, and knowledge that helps your bank effectively acquire and retain new customers. SEDONA's New Customer On-Boarding Service gets you ready to launch your on-boarding process fast, in 90 days or less, so that your financial institution sees an uptick in profit and deposits, not next year but next quarter.
Contact us to request a personalized demo of how to use SEDONA CRM to retain more new customers.
On-Boarding Helps Keep Those New Deposits
Fortunately, there are actions you can take. According to Bruce Clapp, "...the single most effective way to enhance the 'new' customer relationship and maximize lifetime value is to have a consistent on-boarding process" (ABA Bank Marketing magazine, October 1, 2007).
On-boarding is the process of acquiring, accommodating, assimilating and accelerating new customers.
We at SEDONA Corporation couldn't agree more with Mr. Clapp. We have seen how one of our community bank customers improved new customer retention by 6% by implementing a simple and easy on-boarding process. Our analysis shows this improvement generates $175,000 in additional bottom-line profit annually for our client with absolutely no additional cost to the institution.
But a typical community bank needs appropriate technology to support a consistent on-boarding process that will have the right bottom-line impact.
The On-Boarding Effort Pays For Itself
Are you ready to increase your retention of new customers and bring in additional profit to your bank? SEDONA CRM is software, services, and knowledge that helps your bank effectively acquire and retain new customers. SEDONA's New Customer On-Boarding Service gets you ready to launch your on-boarding process fast, in 90 days or less, so that your financial institution sees an uptick in profit and deposits, not next year but next quarter.
Contact us to request a personalized demo of how to use SEDONA CRM to retain more new customers.
