Competition for Checking Is Heating Up Again…

By now, this offer should be familiar to everyone in our business–“Switch to Bank X and Get $300!”

Banks, particularly the larger players are pulling out the stops with offers of $300, $400, even $500 for moving. What are these banks looking for? Customer relationships–checking, savings and a loan relationship. Some of the offers are targeted at new checking customers and offer large bonuses for opening and funding a premium account. Others are going after relationships offering bonus money for various account types. All have activity and funding requirements, but know this–these offers work.

StratAgree recommends that regional and community banks do two things. First, they must understand the value of customer relationships to know how much is reasonable to spend to acquire them. Second, they need to ensure that their digital banking offerings (particularly mobile banking) are current and attractive.

Customer Value
Banks need to know which account types customers buy, what the average balances in those accounts are and the length of time customers keep these accounts open to begin to understand the value of a customer relationship. Many a marketer has been criticized for high cost per account acquired but few of the criticizers have solid evidence for why they believe it’s “too much.” Better marketing decisions are possible when you know the real value of a customer relationship

Digital Tech
The bigger banks are investing in state-of-the-art mobile banking platforms. Smaller players are beginning to lose share on this alone. Get current. Again, customer relationships are probably worth more than you think. Marketing isn’t the only investment required to attract and retain them.

Here’s a great piece that appeared at bankdirector.com about 6 weeks ago. Although it’s a similar story, we don’t see this as a new trend–it’s always been good business. It’s just that some players have better information to guide their strategy.  Chase has been using this tactic for many years with great effect. They know what a customer is worth. Do you?

 


 

To learn more about Customer Lifetime Value, contact Alpine Jennings at 716-713-4266 or

Robert Dorn at 404-987-2419.

 

Women Stuck Managing Home Finances

Women, more often than not are the CFO of their household. Our friends at The Financial Brand have compiled research from Regions Bank, Allianz and other sources showing that women feel like financial management of the household ends up being their responsibility in spite of their feeling less confident in financial matters compared to men.

44% of women said they are solely responsible for making financial decisions for their household, compared to 35% of men. However, men rated their overall confidence in handling finances higher (6.20 on a seven-point confidence scale) than women (only 5.86). Women under age 50 rated their confidence even lower (5.61).

The largest confidence gap between women and men is in the area of investing, where women respondents showed a confidence level of 4.75 on a seven-point scale compared to 5.42 for men. For the entire article click here.

Banks Need to Step It Up With Millennials

Our friend, David Kerstein of Peak Performance Consulting Group wrote an interesting piece on the need for banks to attract millennials that appeared last month on BAI’s Banking Strategies blog. Dave’s premise isn’t anything new, but the fervor in which he makes his point is particularly apropos–other competitors will step in to serve this important segment in banks don’t. In fact, it’s already happening.

Banks need to take action or risk losing this segment to new entrants in the payment, consumer banking and business banking space. And there is cause for concern: we counted 38 different non-traditional competitors in the payments space alone, of which 10 were new in the last year.
–David Kerstein

As we’ve stated before, StratAgree’s assessments is that banks’ must focus on experience and that means digital. Serendipitously, consumers in the Millennial segment are up to ten times more likely to switch than more mature (older) counterparts. The point is: the time is now to make sure your customer experience is up to date so you can protect the customers you have and attract new customers from laggard institutions.

To see Dave’s article in its entirety, click here.

 

Younger Consumers Ditching TV

Millennials are dropping cable after leaving their parents’ home.  The trend appears to be related to lower incomes of younger consumers. A new Nielsen report, (covered by the New York Times, see link below) shows the trend is likely to reverse as these younger consumers start families.

smartphone-982563_640For us, the takeaway is that 1 in 4 consumers ages 18-24 without children are foregoing cable TV. According to the research, these consumers are using an antenna or the internet for TV.

For consumers under the age of 32, at least half of their TV watching is on computers, tablets or smartphones.

Not surprisingly, this growing trend underscores the necessity for advertisers to build their presence in digital media.

The entire text of the NYT article can be found here.