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Gain a Bigger Slice of the “Core Deposit” Pie

Drive Growth and Achieve Goals With a Strategic Approach to Checking Acquisition

Acquiring and retaining core deposits has been a growing challenge for financial institutions. That’s because consumers today can choose from a seemingly endless menu of savings and investment options. Not surprisingly, people are getting savvier about their financial decisions.

“Consumers are being asked to take greater responsibility for their financial well-being,” says Michael Bencic, executive director of client strategy, Harland Clarke Marketing Services. “They want products with higher growth potential, such as mutual funds and stocks, that will help ensure they don’t outlive their assets.”

According to a Federal Reserve Survey of Consumer Finances, in the two decades spanning 1985 to 2005, the percentage of household assets in deposit accounts shrunk from nearly a third to less than 10 percent. In contrast, the percentage of assets in life insurance, pensions and trusts grew from 37 percent to more than 51 percent. Likewise, household investments in mutual fund shares quadrupled as assets were moved into equities and money market mutual funds, and as consumers increasingly turned to employer-sponsored contribution plans for their retirement savings.

The combination of Harland Clarke’s Acquisition Accelerator™ and Intelligent Onboarding™ is a one-two punch that both attracts new account holders and lays the foundation for long-term profitable relationships.

Consumers are also demonstrating much greater confidence in the increasing number of direct mail and online high-rate offers from national and nontraditional financial services companies, making the challenge of deposit retention and growth even more critical.

Account Acquisition + Organic Growth = A Winning Strategy

Stable core deposits are vital to the strength and performance of banks and credit unions, enabling them to lend, invest and reduce exposure to risk. Checking accounts in particular are a low-cost source of funds and a key source of fee income. Perhaps more importantly, they are the glue that keeps account holders with you for the long haul, according to Diane Merrifield, director of program management, Harland Clarke Marketing Services.

A Smart Approach to Deposit Acquisition

Acquisition Accelerator™ utilizes a strategic combination of four key elements to drive core deposit acquisition: (1) audience, (2) offer, (3) incentives, and (4) execution. Choosing the right options will depend on your financial institution’s goals and factors that are specific to your situation, which include:

Your goals. Whether you’re seeking the greatest possible account volume and fee income opportunities or looking for long-term quality relationships and deposit growth, your business objectives will guide your marketing strategy.

Your market. Understanding who your prospects are and what makes them tick is crucial to defining the right acquisition strategy.

Your competition. Who are they and what are they doing marketing-wise? With everyone vying for the same deposit dollars, your strategy must evaluate competitive challenges.

Your product offer. Your success also requires a compelling product offer that supports your goals and appeals to your target prospects.

Your marketing budget. A consistent and targeted direct marketing program will stretch your dollars further in terms of acquiring the right account holders, and it is far more costefficient than other media

“Checking accounts are that critical foot-in-the-door that offers the opportunity to engage, onboard and cross-sell new account holders,” she says. “They drive organic growth and counteract the inevitable losses due to attrition.”

The Grant Thornton 14th Annual Survey of Bank Executives found that while nine out of 10 bankers feel that retaining deposits and attracting new account holders are important for success, only half are confident of their financial institution’s performance in these areas.

Merrifield explains that now is the time to gain momentum and market share by investing in marketing, especially when competitors are cutting back as a result of economic pressures. “With financial institutions generally spending more than 50 percent of their marketing budgets on account acquisition, combining acquisition with a disciplined onboarding program is crucial to long-term growth and profitability,” she says.

But attracting new checking accounts is easier said than done. “Switching banks is a hassle,” says Merrifield. Typically, people won’t bother unless motivated by a lifestyle change (often accompanied by a move—see “Welcome to the Neighborhood” on page 12) or dissatisfaction with their current institution. These triggering events typically are not predictable, underscoring the need to view account acquisition as an ongoing strategic marketing investment, not a one-time promotional shot-in-thedark.

Indeed, acquisition marketing has become more targeted and sophisticated. “We’ve moved beyond simple free-checking-with-a-gift offers,” says Merrifield, “to strategies designed to better target households with the greatest opportunity for long-term deposit growth and profitability. Direct marketing is one of the most cost-effective and measurable approaches, especially compared with such tactics as print and radio advertising.”

With an increasing focus on attracting households that are more likely to engage more deeply and grow in value over time, financial institutions need to consider more strategic approaches to acquisition— and that includes a direct marketing approach that involves four essential elements: the right target audience, a compelling product offer, motivating incentives, and strong creative execution.

For example, the institutions that have made Harland Clarke’s direct marketing solution, Acquisition Accelerator™, part of their marketing strategy have reaped results that include a 66 percent upswing in new checking account openings and a 58 percent boost in direct mail response rates. What’s more, the cost of acquiring new account holders dropped in some cases by 30 percent to 40 percent (your results may vary).

“Account acquisition is the first step in the marketing continuum,” says Merrifield. “After that, you focus on engagement, growth and retention. It’s a winning strategy.”

To learn how Acquisition Accelerator™ can help you apply smarter strategies to acquiring more checking households and deposits, go to, contact your Harland Clarke account executive, or call 866.609.8609. Also see how we streamlined the acquisition process for one financial institution in Client Cases.


Welcome to the Neighborhood

According to the U.S. Census Bureau, 14 percent of the U.S. population relocates every year. This translates to some 40 million people, many of whom seek out a new bank or credit union in the process. Not surprisingly, direct mail response rates from new-move lists are almost twice as high as those generated by other household acquisition lists.

The best time to reach new neighbors with your message is during the 90-day time span before and after the move. “You need to reach them quickly and efficiently, before your competition does,” says Merrifield.

Therefore, an ongoing direct mail program, such as Acquisition Accelerator™, is a smart choice. One feature of Harland Clarke’s Acquisition Accelerator Program is the new-mover database. Harland Clarke’s new-mover database—compiled from national and regional sources—is updated several times a week. It incorporates such information as U.S. Postal Service NCOA (National Change of Address) data, new telephone and utility connections, and subscription address changes.

Of course, the goal of any direct mail program is not just high response rates, but also new accounts. To do that you need to factor in demographics, your product offer and the creative execution. “It’s a balancing act,” adds Merrifield. When reaching out to new movers, consider these facts: