These results echoed a Forrester report issued in February, which found that acquisition continues
to trump retention as a marketing priority. Nearly 60 percent of respondents cited acquisition as a priority, compared with half that number who were looking to boost retention.
With that information, webinar presenter Srividya Sridharan, an analyst with Forrester Research, issued a caveat. “Don’t just stop at acquisition,” she said, adding that all newly acquired account holders are not necessarily good account holders. “You need to ask which account holders create value, which ones destroy value and which segment is not currently served.”
It’s not sufficient only to budget for acquiring new account holders. Equally important is to consider what happens once they’re in the door. Toward that end, Sridharan stressed the importance of putting account holders in the center of the relationship as they discover your financial institution, explore the products you offer, choose which ones they want initially and, ultimately, become interested only in additional services.
A Shift in Mindset
Each interaction is an opportunity for the institution to learn more about the account holder, and the amount of information about that individual grows as the relationship advances through the account holder lifecycle. The key is to capture the information and know which aspects of it are useful from an analytics perspective.
This also requires a shift in mindset. “It’s time to turn the tables on the traditional relationship management approach,” said Sridharan. “It’s better to have a more account holder-centric culture, where the focus is on the account holder experience.” In other words, the focus should be less on the acquisition goal and more on what matters to the account holders and their perceptions of value.
Using the old approach, a marketer would focus on operational and volume-based metrics for tracking results. “It meant measuring how many impressions the campaign generated,” said Sridharan. “Did they click through to our landing page, or did they buy our products?” She calls this funnel-based analytics.
But using funnel-based analytics doesn’t give insight into account holder behavior. “It ignores the quality of the prospective account holder, which is evident if you do a profitability analysis,” she said. It's far better, Sridharan advises, to align acquisition and retention goals via an account holder experience approach. For example, banks and credit unions should examine call center interactions to see if there is account holder dissatisfaction, and emphasize engagement-level metrics such as social media activity and service interactions. “Adopt a more holistic outlook that goes beyond measuring just outbound acquisition efforts such as email and direct mail," she explained.
Creating a More Engaged Account Holder
Thinking about analytics from both an acquisition and a retention perspective enables institutions to
dig deeper by asking four questions:
“Analytics can more quickly move the account holder to greater profitability across the entire lifecycle.”
This sort of approach requires mapping out analytical interventions across the account holder lifecycle and balancing the efficiency of acquisition with the account holder’s lifetime profitability. It makes use of segmentation programs, response models and propensity models to further refine acquisition efforts with predictive analytics (see below).
“Analytics can more quickly move the account holder to greater profitability across the entire lifecycle,” said Sridharan. By using analytics in this way, institutions can create actionable metrics for key performance indicators, whether they are account holder focused (loyalty and engagement), marketing focused (campaign response, cost per lead) or service focused (cross-sell revenue, average wait time).
“The more we can focus our efforts along the continuum of lifecycle marketing, the better the return and the greater the value to the financial institution,” said co-presenter Sandeep Kharidhi, vice president of analytics and business intelligence at Harland Clarke. “The further into the lifecycle the account holder is, the more valuable he or she is to the financial institution.”
Kharidhi recommends that banks and credit unions take the following three actions when embarking on an acquisition program:
What is paramount, according to Kharidhi, is a long-range, account holder-centric approach. “At every stage of the account holder lifecycle, there are analytics that can help maximize your ROI,” he said.
For more insight into using analytics to boost your acquisition programs, visit harlandclarke.com/acquisitionwebcast to view our webcast.