A recent survey revealed that 57% of banks say internal silos are their biggest obstacles to big data success. Sharing customer data across departments and even across marketing channels can be challenging, but the benefits are worth it.
Your bank may not be leveraging retail customer data to its’ full potential, but the good news is that it is a big opportunity…and it can be easy to implement. Customer segmentation analysis transforms a basic customer and address list into an insightful and powerful targeting tool.
Data has the power to drive customer acquisition, improve customer relationships, unlock new opportunities and increase profitability. Analytics provides the knowledge to empower your institution to drive retail customer growth.
How can data drive your growth strategies? There are typically three basic questions marketers ask themselves.
- Where are my customers coming from?
- Who are my customers?
- How can I find my best potential customers?
The best way to unveil your most profitable targets is by gaining a detailed understanding of your existing retail customers. Think about your branches. How is each one unique? How are the customers you serve at each branch different? How do the market areas for each branch vary? How can you understand those differences to drive growth at each branch strategically?
Every location has unique differences.
Understanding your various customers and the trade area differences that exist allows you to market to those differences to accelerate growth. Identifying key characteristics of your customers at each branch improves your ability to invest and trim marketing dollars in order to improve advertising efficiency and drive ROI.
If customer data is so powerful, why don’t most community banks leverage it? Here are a few common myths we often hear from community banks.
MYTH: “As a community bank executive, I know my customers like the back of my hand. I don’t need analytics.”
Recently, I asked two community bank executives from the same institution who their customer was. They both gave me completely different answers based on their day to day interactions with customers. Analyzing their data showed that their customer base is made up of different types of consumers with varying demographics, spending behaviors and financial propensities. And those customers types look different across their branches. Analytics helps you move from thinking you know who your customer is to knowing who your customer is.
MYTH: “Customer analytics costs too much for a financial institution my size.”
Instead of investing substantial time, money and resources into a customer analytics platform, a financial institution might partner with a service provider, like Main Street, that provides affordable customer analytics & segmentation solutions.
A targeted approach gets results.
Understanding your customer’s DNA can serve as a blueprint for locating the best potential customers for each branch and how best to reach them based on their media preferences and likelihood to utilize your products. Before receiving their customer analysis, one of our clients thought the best way to reach the local Hispanic community was through commercials on a select local TV station. But, analysis showed the local Hispanic residents preferred newer television shows and weather programming early in the morning. This knowledge armed the institution with the intelligence needed to execute relevant marketing strategies to the right audience at the right time. As a result of this targeted approach driven by the analytics, they experienced a 50% increase in new Hispanic customers.
Banks find themselves in the same situations as many SMBs. To grow, they need to know more about their customers and prospects—where they live, what motivates them, and how to reach them. With so much customer data at your fingertips, intuition alone is no longer an acceptable growth strategy.
According to Capgemini Consulting, banks that apply analytics to customer data have a four percentage point lead in market share over banks that do not.
Budgets are not endless. At the end of the day, acquiring new customers can be costly. Using customer data-driven profiles & actionable strategies will improve your marketing efficiencies across your media channels and improve response rates, resulting in better ROI.