The financial industry is fiercely competitive, with banks contending for the same pool of customers in the market. With more choices available to people, new client acquisition can be a costly ordeal for banks of all sizes, especially without effective strategies in place.
So, what can give you the competitive edge you need? DATA. There has been an exponential growth of customer data available to banks, and if used and leveraged correctly, it can bring impressive results. Here’s how the Speedeon team helped a leading retail bank acquire customers with the power of predictive analytics for finance.
Data Analytics in Banking
Today’s banks can obtain their data in multiple ways. Even if the availability of first-party data is limited or restricted, banks can still benefit from high-quality third-party data from reliable platforms like Speedeon.
Data opens up new avenues through which brands can execute effective customer acquisition strategies and attract customers. It can also provide a very accurate and comprehensive picture of your targeted customers with insights about customer behavior, preferences, and expectations. More importantly, it helps you segment your customer base and identify your most profitable segments.
Overall, data is a critical asset for finance companies as it can help them provide a better customer experience, increase customer retention and lifetime value, and compete better.
Using the Right Data, the Right Way
At Speedeon, we do not just provide clients across different industries with rich third-party data. We also help them leverage data to optimize the benefits. With predictive models, brands can anticipate the next major life event of their customers, develop cross-channel acquisition strategies to reach them, and connect with them with the right offer. They are vital for identifying customer and prospect needs beforehand and offering proactive solutions at the right time.
Our client, one of the top 5 retail banks in the country, has an extensive network of branches. They primarily relied on direct mail for marketing efforts because unlike other customer acquisition channels, it’s cost-effective, highly customizable, and delivers better response rates.
We had identified that movers presented a great opportunity for the bank to increase its new client acquisition rate, given the nature of their needs and requirements as they settle into a new environment. This included customers who were moving into their footprint the first time and those who moved into a footprint with a different competitive landscape.
A Frugal Approach to New Client Acquisition
Attracting new customers can cost up to 5 times more than retaining existing clients. Many businesses don’t have the budgetary freedom for trial and error. Similarly, the bank’s marketing team had to work under tight budgetary constraints. They had to keep customer acquisition costs low but still bring in results in terms of new account holders. This demanded a frugal approach to targeting customers, aiming only at those more likely to convert.
So, we could do nothing but roll up our sleeves and get to work right away. Considering the limitations and the need for efficiency, our team focused on a highly selective model for targeting purposes. Our selected approach was Mover Exact, a predictive response program focusing on movers built using the database of the bank’s current customers.
A Predictive Model Based on Movers
Even within movers, not everyone would respond to our campaigns with equal enthusiasm. Therefore, we needed to narrow down and find the ideal audience group for our promos. We didn’t want to waste funds by including the entire population and filling our customer acquisition funnel with random leads. Here’s when predictive analytics for finance becomes helpful!
We used the existing first-party data as a seed and combined them with our latest new mover data to build a predictive model, identifying the segments within the moving population that are more likely to respond to our marketing campaigns.
In order to increase the response rate further, the highest deciles of the group were offered cash promotions. It was provided as a reward for opening a checking or savings account with the minimum opening balance. We aimed to make our direct mail marketing programs as appealing as possible to get customers to respond to them.
Better Model, Better Results
The results of our customer acquisition method were impressive! Thanks to the accurate model, we were able to put our dollars to work effectively by targeting the right segments of the moving population and drive new customer acquisition. The one-time bonus for the sign-up also paid off and proved really effective in attracting high-value customers.
There was a significant increase in new accounts, and in addition, opening balances also showed an improvement of 37%. As with other metrics used to measure customer acquisition, there was a 24% increase in relative redemption rate and a $510k increase in annual savings. With 44% fewer records mailed, we witnessed that our customer acquisition efforts were indeed a huge success.
Win the Game with Predictive Analytics for Finance
Looking for a customer acquisition strategy to win your customers? Speedeon can create a tailored approach to reach potential customers with high customer lifetime value. With data, the room for error is minimal, and we target specific segments, addressing their specific requirements.
Our data-driven solutions make new client acquisition cost-effective and deliver the maximum ROI for every dollar spent. Whether your company is in finance or insurance, we have you covered. Get in touch with us today to book a consultation.
