Small Business is Big Business

While most banks are spending more time and resources trying to address the needs of small businesses, a large percentage of this segment is still underserved. According to a Javelin Strategy & Research report released last year, about two-thirds of the 26 million small firms don't have business banking accounts.

Smaller companies usually integrate their business and personal relationships or simply open another personal account according to the Javelin report released late last year. That means they may pay lower account fees, but also don't receive cash flow and treasury service attention from a bank's small business sales team, potentially impacting the business' ability to grow.


At a time when banks are looking for ways to acquire new customers and generate additional revenue, marketing to and serving this untapped banking segment is a win-win for banks and small businesses alike. The challenge is to uncover these somewhat hidden relationships. Sometimes, banks are evaluating transactions to determine what customers are using accounts for business purposes while others are using social media to have small businesses indentify themselves.

According to several reports over the past two years by Aite Group, while smaller businesses tend to use banking services similar to consumer banking relationships, their payments habits show tremendous growth opportunity for debit and credit cards as well as online banking services. In fact, according to Aite, only 4% of spending by small businesses currently is done on a small business credit card. Capital One has already responded to this opportunity by allowing small businesses to combine their business rewards with their personal rewards. Other banks are tracking checks and ACH transactions to help find underserved businesses.

Alternatively, firms like Bank of America are leveraging the power of social media to develop the Small Business Online Community which has over 50,000 registered users, while American Express continues to promote their very successful small business OPEN Forum where small businesses can find articles, expert blogs, success stories and advice with limited networking opportunities. Wells Fargo is also the first bank using blogs to stay in touch with small business and retail customers, while VISA teamed up with Facebook to create the VISA Business Network for small businesses to share advice and potentially grow their customer base.

Going forward, bank marketers should take notice of the smaller business market (under $500,000), tieing together personal and business relationships, changing payments behavior and providing better cash flow solutions that can help these business grow.

Growth in Deposits Presents Opportunities and Risks

The American Banker today had an article detailing the recent trend of low cost deposit growth experienced by the major banks in the fourth quarter of 2009. According to KBW Inc.'s Keefe, Bruyette & Woods, the top 40 banks experienced a deposit growth rate of 8% in the quarter, with only a couple large banks intentionally allowing higher-cost deposits inherited during acquisitions to run off during the year.

Even though interest rates remain extremely low, consumers were still saving at a rate of 4.7% as a percentage of disposable income in November, according to the Bureau of Economic Analysis primarily due to uncertainties in the marketplace and due to the view of banks being the safe harbor for funds accumulated during a time of reduced spending.
While bank revenues will not return to high levels until consumers begin to borrow again, productive deposit gathering should help banks lessen the impact of the Obama administration's proposed "financial crisis responsibility fee," which would subtract government-insured deposits from the covered liabilities on which the 15 basis-point tax would be based.

There is an opportunity and risk associated with this deposit growth however. For banks that have well developed onboarding and cross-sell programs in place, this deposit growth and the resultant increase in new accounts provides a tremendous foundation for developing long term relationships with an enhanced ROI. In addition, with households continually evaluating where to place their funds, firms with aggressive aquisition programs will benefit the most.

Conversely, those organizations who become complacent during this time of deposit growth could risk seeing the deposit growth over the past 15 months evaporate, moving either to other banking organizations or eventually to the equity markets as the economy grows stronger. I am recommending that my clients continue to focus on deposit acquisition programs and reach out to those new households they have recently acquired or households who have expanded their relationship and further secure the relationship through insight gathering, engagement programs and improved retention processes.

Eventually, it is expected that consumers will become more confident and will seek additional investment and savings options. When this occurs, it will be those organizations with the best customer experience and strongest relationships that will lose the least.

Is Cash Really King?

The competition is again heating up in the checking account cash wars. In addition to banks that have traditionally offered cash incentives to open checking accounts such as JPMorgan Chase, Capital One, Fifth Third and PNC Bank, banks that in the past have offered premiums for the opening of new accounts like KeyBank are now also joining the money for checking acquisition game.

While incentives with some institutions are still $50-$75, many of the more aggressive institutions are offering rewards of $150-$200 to new customers that open accounts and meet some qualifying stipulations such as signing up for direct deposit, online billpay or a minimum number of signature debits. A recent program by Capital One offering $300 for a new account was the highest premium seen in years.

In a review of recent checking campaigns using the search service Mintel Comperemedia, more and more firms are offering the higher incentives. The question remains whether these high incentives pay off.

According to a 2009 study by Novantas, as many as 50% of new checking accounts are usually inactive when analyzed by looking at debit and credit transactions on the new account. In addition, the BAI has fielded many studies that find that as many as 30-40% of new accounts are closed during the first year. Unfortunately, many banks that I visit do not measure the new account activity level or rate of attrition as thoroughly as they measure the number of accounts that come in the front door. If measured using a full year view of the acquisition costs of new accounts, it is possible that some banks are paying double or triple their cash incentive for new relationships which may make the programs unprofitable from both a short and long term perspective.

It may be a more prudent strategy to reallocate this investment to strengthen current customer relationships through cross-sell and up-sell programs instead of attracting short-term, opportunistic customers with such high incentives.

Mobile Banking Can Improve Customer Acquisition by Sixty Percent

One of the more startling takeaways from the Mobile Banking and Emerging Applications Summit this week was when Bob Hedges from Mercatus mentioned that mobile financial services could improve customer acquisition rates by as much as 60% in key customer segments (age under 50) for early moving banks. In fact, according the research findings which were presented at blinding speed at the conference, a bank's mobile presence was more important than online banking, ATM presence or even the convenience of local branches in a customer's decision to select a bank.

Combined with the statistic that more than 30% of U.S. consumers are either using or considering using mobile financial services in the next year, and it is understandable why the best quote from Hedges at the conference was that, "Making a business case for mobile banking is like making a business case for oxygen"!

Other findings shared by Hedges at the conference included that mobile financial services users have higher incomes than traditional customers, use more services and have up to 12% lower attrition (which has been supported by other findings provided by banks recently at other conferences).

Finally, Hedges emphasized to the more than 300 bankers in attendance that the rate at which consumers are adopting mobile banking is must faster than originally anticipated, with an expectation that the number of mobile banking consumers could surpass those who use online banking by 2015.

Given the positive impact that introducing the mobile channel could have on acquisition efforts, servicing costs, utilization of services and attrition, there is no doubt that mobile banking will be emphasized by banks over the next 18 months. Obviously, the spoils will go to those fast moving banks that can introduce mobile banking to their customers and prospects the quickest and who can continue to promote and enhance their offerings to a increasingly technology driven target audience.

Ten Steps to Onboarding Success

Later today, I am presenting at the Oregon Bankers Association 105th Anniversary Convention at Sunriver Resort on the topic, Stemming Attrition and Building Relationships Through Effective Onboarding.

In addition to sharing recent statistics from J.D. Power and Associates around the positive impact of increased attention early in a new relationship and the positive impact of using multiple communication channels from case studies across the banking industry, I will be sharing the ten key steps to onboarding success that I have seen over the past five years.


These ten steps are:

1. Acquire the right customers: The most important component of a successful onboarding program is to acquire customers that have a greater liklihood of future value based on modeling and geographic targeting.
2. Communicate early and often: The sooner you can build dialogue with the customer and the more often you can connect in the first 90 days, the more successful you will be in retaining and building relationships.
3. Integrate across multiple channels: Reaching out to the new customer using phone, direct mail, email and personal 1:1 communication will greatly improve the success of an onboarding program. We have seen lifts of 25-50% when multiple channels are used.
4. Build in learning from day one: An onboarding program should not run on auto pilot. The competitive environment, customer behaviors and transaction trends change all the time. Your onboarding program also needs to adjust on a dynamic basis.
5. Engagement is key: Cross-selling the new customer should not begin until after you encourage engagement with the new account. This can include direct deposit, online banking and bill payment, autosave, credit utilization, debit/credit card utilization, etc.
6. Build a cadence of communication: A successful onboarding program uses a sequence of communication to improve the customer experience by helping the customer understand their new account, get to know the bank brand and eventually build trust and a stronger relationship.
7. Develop personalized offers: Once the customer has demonstrated a satisfactory level of engagement with their new account, offers targeted to the specific needs of the customer should be communicated.
8. Use a test and learn mentality: Testing should always be done with an onboarding program to determine the right offers, timing, channels and cadence for each customer segment.
9. Measure results: Results should be measured consistently against a control group. Common metrics include changes in attrition, engagement, cross-selling, balances and satisfaction on both a customer and household basis.
10. Provide a single point of responsibility: Since most banks do not have Directors of Cross-Selling or VP of Retention, it is important to assign the onboarding process to a single person who will 'own' the development and impact of the onboarding process. This person will work with segments, product managers and marketing teams to ensure the success of your program.

There has never been a more important time to develop a successful onboarding program. With fee income being attacked by Reg E and net interest margins at historical low levels, it is imperative that financial organizations attract and keep customers with the highest potential lifetime value.

Drop in Loyalty and Impact of Premiums Should Concern Bankers

According to the 2010 U.S. Retail Bank New Account Study released by J.D. Power yesterday, large banks captured a higher proportion of prospective customers compared with regional banks. Based on responses from 3,770 consumers who shopped for a new banking account or a new financial institution during the past 12 months, larger banks acquired 70 percent of prospective shoppers while regional banks secured only 59 percent of these shoppers.

According to the study, the higher capture rate by large national banks was significantly impacted by the use of promotional gifts and attractive short-term interest rates, with 24 percent of those opening an account with a large national bank saying that was the primary reason for selecting the bank (compared to only 13 percent for regional bank customers).


What should be concerning for those banks that are using premiums or short-term rates as an incentive for new customer acquisition is that almost one quarter of these customers say they "definitely will" or "probably will" switch banks again in the next 12 months. This was almost twice as likely than for those customers who opened an account for another reason (convenience, referral, safety, etc.).

"While offering a promotional gift, cash award or attractive short-term interest rate may lead to increased selection by customers, it is important to keep in mind that the increased selection rate doesn't necessarily lead to an increased retention rate," said Michael Beird, director of the banking practice at J.D. Power and Associates. "The short-term boost in acquiring customers can become a retention challenge in the long run."

The study also found that when customers decided to avoid a particular financial institution, brand image was the key driver, with larger banks experiencing the highest avoidance rate. This correlates with the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study released last month that found that the likelihood of switching was significantly higher for customers of larger banks as opposed to smaller banks (only 32 percent would definitely not switch from a larger banks compared to 41 percent for smaller banks).

These two studies should be a bit of a wake-up call to banks interested in acquiring new customers. Not only is it more important than ever to improve the customer experience and customer advocacy, but there should be a stronger emphasis on acquiring a potentially a higher quality of customer as opposed to simply a higher quantity of customers.

Cross-Selling is Key to Bank Revenue Growth

As the banking world is shifting from a supply-side, product-driven environment to a demand-driven one, the focal point of this new model is the customer. As a result, banks are going to need to change their operating models to adapt and align to this new reality. Only then can banks deliver a truly innovative and compelling customer experience.

Part of this transformation will be to develop key performance indicators (KPIs) that measure long-term performance such as loyalty as well as shorter-term measures such as cross-sell effectiveness, customer satisfaction and household profitability. With as much as 30% of the bank's customer base potentially being vulnerable and 'in play' according to an Accenture survey of banking customers, banks must commit the resources needed for actionable customer segmentation, new pricing models, needs-based solutions and a way to reach customers effectively and efficiently to grow relationships.


As returns on equity have dropped precipitously, banks are now focusing on cross-selling to replace some of their profits and solidify relationships. In a recent Bloomberg Businessweek article entitled, Wells Fargo Pushes Cross-Sales to Replace Lost Growth, David Henry and Dakin Campbell discuss how the emphasis on cross-selling (which is not new) could be more effective at many organizations today since acquisitions by many banks have added millions of new customers to sell. For instance, Bank of America is hoping to persuade its 12 million customers to move funds to their newly acquired Merrill Lynch or for the Merrill Lynch clients to use more bank services. In addition, Wells Fargo is focusing on improving cross-selling at its Wachovia branches, where customers average 4.85 products per household compared to the much higher historical average at Wells.

As Stephen Steinour, CEO of Huntington Bancshares, said in a recent interview with analysts when asked about the importance of cross-selling at his bank, "there are not a lot of options". In fact, as the focus of the lead story in the most recent U.S. Banker magazine entitled Back from the Brink, Steinour and his team place cross-selling as the top priority at the bank, with a new CRM system being installed, additional employees being hired, Sunday branch hours being introduced, marketing spending increased and new incentive and measurement plans being put into place to reward customer relationship growth performance.

A number of banks I visit and clients of our company across the country have integrated cross-sell initiatives into marketing programs done quarterly, monthly or even daily based on customer behavior and events. Unlike the product-push promotions of the past, these programs leverage the modeled needs of the customer and flexibility of digital print to deliver messages to the customer that are based on their product propensity and recent activity. So, instead of promoting equity credit in September, many banks will be promoting a wide range of their services to individual segments of their customer base most likely to respond at a given time. Many of these banks are also leveraging all available communication channels (direct mail, email, phone, online banking, etc.) to support these efforts.

The key in all of these initiatives will be to make sure cross-selling is done for the benefit of the customer as opposed to simply reaching desired metrics. As many banks found out in the past, profitability is not automatically enhanced with an additional product sale. The focus needs to be on finding the correct solution for customer's needs which, in turn, will lead to an expanded relationship in dollars, services, and share of wallet.

How is your bank balancing the investment in cross-selling vs. acquisition marketing? Has there been a shift to either strategy in the past couple years at your bank? How do you view the future of acquisition and cross-sales?

Can Banks Find Ways to Make Deposits Work Harder?

As was mentioned in yesterday's American Banker article, In Cash Glut, Banks Try to Discourage New Deposits, many banks are currently in a somewhat disadvantageous position of having an abundance of deposits at a time of depressed loan demand. With loan to deposit ratios dropping from a median of more than 105% to less than 95% in less than two years for the 15 largest banks, the excess liquidity is costing banks money.

This inability to earn adequate interest on these deposits, combined with lower overdraft fees and the potential for lower interchange income has banks that I am working with scurrying for ways to make up the revenue shortfall.

Some banks are reconfiguring their checking account pricing either by adding fees for enhanced services such as privacy protection or rewards program participation or are reducing costs by offering new streamlined products that have limited service structures (like Bank of America's new online checking test).

And there is no end in sight to the inflow of deposits, as the confidence level of both consumers and businesses is weak enough to encourage a heavier savings mentality and with the equity markets too risky for many investors. Many banks are seeing inflows even with historically low interest rates being paid on deposits.

While loan demand will eventually pick up and banks will most likely find ways to recoup some of the lost fee income through new products or pricing structures, the best long-term solution is to change from a transaction support mentality to a customer relationship perspective. This holistic view encourages the acquisition of accounts with a greater long term potential, a stronger emphasis on engagement of these accounts to increase fee income and reduce attrition, and a focused effort on increasing share of wallet through needs based cross-selling.

At a time when margins are razor this, loan/deposit ratios are anemic and traditional fee income is being attacked by new regulations, it is imperative that we maximize the value of relationships at every step of the customer lifecycle. Historically, too much revenue has been 'left on the table' and we have been accepting of people who open new accounts simply for a premium (gamers), customers with dormant or low activity accounts, and single service customers. Going forward, we need to refocus our efforts on increasing our value proposition at the same time we reduce delivery costs and maximize relationship value.

Has your bank stopped their deposit acquisition efforts? Has there been an increased focus on the engagement and cross-sell processes at your bank? I would love to hear about your bank's strategy for dealing with the abundance of deposits that currently exists.

Small Business Acquisition Strategy Should Correlate to Potential Value

According to Barlow Research, a small business customer ($100K to $10MM in sales) will bring about $5,173 in Net Potential Revenue to a bank each year. This revenue estimate is based the value of short-term and long-term loans, demand deposit accounts and other business banking products balances and fees paid by a small business in 2010. Based on these revenue estimates, a shift in one percent of primary bank market share can increase the Potential Customer Lifetime Value of your small business banking portfolio by approximately $577 million.

Even with this potential, most banks are viewed as underserving the small business market according to research from Barlow, Aite Group, JD Powers, Greenwich Associates and others. The perceived brand of large banks (assets of $50+ billion) became especially tarnished due to big banks' questionable financial stability, slower responsiveness to small business requests and perceived dwindling appreciation for the small business customer. As a result, more small businesses than ever state that they are willing to consider a change in financial institution partner.

The path to rebuilding trust with both current small business customers and prospects is by better understanding the needs of individual small businesses and getting in front of these business owners to present viable banking solutions. But, even though the average small business has tremendous value, just like the retail bank customer, not all small businesses should garner the same amount of marketing investment.

Instead of casting a wide net across all small businesses, your acquisition efforts should be tiered, leveraging product focused and proximity-based direct mail for the smallest businesses, multitouch solution-focused communications for mid-tier small businesses and investing in high-touch multichannel Demand Generation strategies for the highest value businesses where the engagement of a small business relationship manager is most important.

As a sales person for most of my life, I understand that there is no bigger risk to the success of a marketing program, and the credibility of those people who build the program, than the quality of leads I receive. Bottom line, sales people will not work leads with enthusiasm (or at all) if they do not believe the quality of the lead is reliable. This is the challenge most banks face with their small business marketing initiatives.

The best solution we have found to this challenge is to match the marketing communication strategy to the effort needed to close the sale. For that most coveted segment, where the business banking calling officer is required to optimize the value of the sale, we have successfully used a Demand Generation team, that leverages email, direct mail and a centralized outbound calling effort to improve the accuracy of the prospect database (notoriously bad to begin with), identify the appropriate decision maker, help identify a financial 'pain' that can be solved by the bank and score the lead. Only after the lead is thought to be 'ready to buy' is the prospect lead sent to the small business calling officer.

With an investment in an effective Demand Generation program, a bank can spend their time in front of prospects with a need instead of asking the calling officers to follow-up on leads of questionble value. In addition, unlike traditional direct marketing programs that drop and we hope they are followed up on, a Demand Generation process allows for continuous, and immediate, test and learn adjustments and changes in the determination of lead value.

Is small business acquisition and cross-sell part of your marketing plan? Do you tier your marketing investment to the potential value of the relationship and the effort required to close the sale? Are you leveraging multiple channels for your efforts? I would love to hear about your strategies. 

The Sales Funnel Revisted

For my whole career, both in marketing and sales, I have understood the concept and importance of the sales funnel. Conceptually speaking, the traditional sales funnel starts with awareness being generated at the top of the funnel (the widest part) and then having the prospect work down the funnel through the stages of interest, consideration, commitment and eventually having a sale made at the narrowest part of the funnel. The funnel framework worked fairly well in providing the foundation for understanding what metrics should be concentrated on and where resources should be deployed.

But what happens in a world where prospects have so many more tools at their disposal to evaluate your offerings on their own or where they skip stages of the process all together?
In addition, while the traditional sales funnel usually ends when the sale is consummated, should that really be the end of sales and marketing's engagement with the customer? Shouldn't we also measure post sales activities that build share of wallet and recognize the challenges of an unengaged customer or one who attrites?

A couple months ago, the people at Focus.com asked 14 sales and marketing experts to view the sales funnel concept in a world of the Internet, social media, word of mouth marketing, massive choice and competition? They reached out to their Focus Expert Network to submit their version of the sales funnel with one condition . . . the funnel and the rationale for their depiction had to fit on one page.

The results just released this week were, to say the least, both innovative and thought provoking. Some experts provided an interpretation that redefined the steps of the sales process and the sources of leads, taking into account the impact of the Internet and the need to more closely integrate sales and marketing. Matt West from Genius.com had a traditional shaped funnel but added the important steps of lead nurturing and cross-selling while discussing the challenge of unknown prospects 'above the funnel'.

There was more than one version that visually looked more like an hour glass, reflecting the important post-sale steps that are required to get a new customer engaged and to build the value of the relationship through repurchase or evangelism. Matt Heinz from Heinz Marketing stated that, "the traditional sales funnel only reflects half the story", ignoring the impact of referrals, repeat business, renewals, etc.

My favorite, however, was probably the entry from Michael Damphousse from Green Leads who threw away the visual of the funnel altogether and provided a diagram of a 'DemandGen Cloud', reflecting that prospects have the power and capability to insert themselves anywhere they want in the sales and marketing funnel. He also reflected that once in the funnel, the prospect can jump to any step they want as a result of web content and word of mouth. He emphasizes the importance of harnessing the chaos to maximize results.

So what does this have to do with banking? First of all, it reflects the impact of the new communication channels such as the Internet and social media. It also emphasizes the importance of going beyond generating a sale, and instead, generating a relationship. Finally, it reflects the diversity of ways to look at the interaction of sales and marketing in any sales process. This is especially true in more complex sales such as small business, commercial, investment services, etc. Whatever funnel you prefer, however, one major challenge needs to be addressed. Whatever the steps, sales and marketing must be in alignment and finance needs to buy off on the metrics and business case. With this uniform and integrated view, the sales process will definitely not be optimized, and it may actually fail.

What does your sales funnel look like? I would love to see even more creative examples of what your interpretation of today's sales funnel might be. Share it with me at jmarous@aol.com and I will post some of my favorites. Oh yeah, the same rules of a one page limit still apply.

Ten Bank Marketer Resolutions for 2011

It is the dawning of a new year in banking with many of the same challenges that we saw in 2010. Our industry continues to be viewed in a less than positive light from both the consumer and small business marketplace. 

The need for new customer growth and share of wallet expansion underpins the need for new sources of non-interest fee income at a time when regulations are dramatically reducing many traditional sources of revenue. In addition, the expansion of transaction and communication channels are changing the ways we interact with customers. 

These challenges are combined with an historically low interest rate environment and a credit environment where there is a massive amount of money to lend at a time when borrowing is more difficult and less desirable for many.

According to a national survey, the majority of personal resolutions in 2011 will revolve around saving money, losing weight, changing a bad habit and being closer to loved ones. Achieving any of these goals will take commitment, focus and changes in behavior. The same can be said for the resolutions I have developed from traveling the country over the past few months and being involved in a number of banks' annual planning efforts.

Here are areas where bank marketers believe they should focus in 2011:

1. Replace Lost Fee Income
Nothing has impacted banking over the past 12-18 months or will impact banking in 2011 more than the loss of fee income caused by the combination of the Card Act, Reg. E, and the upcoming changes from the Durbin Amendment. Almost all other resolutions for the upcoming year are built to address this need. The role of bank marketers in achieving fee income replacement goals will include checking product restructuring and new fee-based product development, increasing card transactions, improving customer engagement and better resource allocation for results.

2. Improve the Customer Experience
Another overarching resolution similar to the personal resolution of being closer to loved ones, bank marketers need to view all of their initiatives using the lens of understanding customer's needs, looking out for customers and rewarding their relationship. In an environment of heightened scrutiny of how we are treating customers, it will be more important than ever to market to consumers and small businesses on a more personalized basis from the day they open their first account and to build a reward structure that reinforces our commitment to relationship retention and growth.

3. Focus on Incremental New Customer Growth
A new balance between quantity and quality of new accounts needs to be struck. With the elimination of Free Checking occurring at most banks I visit, new acquisition models need to be developed that take into account the new checking account continuum. Instead of generating as many accounts as possible, banks will be focusing on the potential value of relationships including the likelihood of engagement and retention. A premium will be paid for those households that will immediately contribute to the bottom line.

4. Gather Email Addresses
When presenting at the BAI Retail Delivery Conference this Fall, it amazed me that there were more banks that collected cell phone numbers than collected email addresses at the new account desk. I suppose this phenomenon may be caused by the combination of more households using a cell phone as opposed to a land line for home communication and the relative ease of having a bank's IT team build another phone field into the new account process as opposed to an email field. But with other communication channel cost increasing and the improved results achieved when email is combined with more traditional channels, the importance of collecting (and using) email addresses has never been more important. Some banks are even considering stand alone marketing initiatives to address this need in 2011.

5. Reduce Customer Attrition
At a time when the cost of acquiring a new customer exceeds $200 and the annual income potential from a new relationship is at least as high, banks can ill afford to accept first year attrition rates of 30-40%. Multichannel onboarding programs that encourage alternative channel use, enhanced services (such as online bill pay, automatic savings, privacy products, etc.) and increased transactions need to be leveraged to stop the massive outflow of accounts that occur early in the customer's lifecycle. Improved tracking of relationship diminishment and win-back programs will also be used to achieve this resolution.

6. Expand Share of Wallet Through Lifestage Marketing
To compensate for the increased difficulty of generating high value relationships, there needs to be a much greater focus on organic growth, including behavior based cross-selling and lifestage marketing. While the movement from product centricity to being customer-centric has been discussed for decades, the removal of product silos is no longer an option for those banks who are seeking optimal resource allocation. More banks than ever are investing in improved models and strategies for relationship growth which will improve both engagement levels and retention in the long term. New service introductions such as privacy protection and enhanced personal financial management (PFM) tools will further allow for relationship deepening in 2011.

7. Don't Confuse Channel Economy with Channel Efficiency
No communication channel is 'free'. While email may seem like a far less costly channel to use for reaching customers, the lack of clear targeting and message development may prove costly as customers opt-out of future communications or simply ignore email messages. In my experience within the banking industry, email has not proven to be as good of a replacement for channels like direct mail as it has been a good supplement for improved results. In 2011, banks will develop much better processes for measuring the incremental impact of alternative channel communication and will continue to expand communication channels to include mobile, ATMs, social media, etc.

8. Leverage Social Media Personally and Professionally
Social media channels definitely can be beneficial or a distraction. Not many of us have time for reading about someone else's dinner plans or personal political opinions on Twitter, yet Twitter can be a great source of timely financial industry or marketing insight and competitive research delivered in a very compact format to the desktop for consumption at a time and place desired. Banks have also realized that social channels need to be used differently in financial services than with retail or other industry verticals. As opposed to trying to find 'friends' of our brands, social media has been used most effectively for customer service (Twitter) and for the promotion of broad based public relations initiatives (Chase's very popular Community Giving Campaign). The coming year will be a year of expanded testing of these new channels for the banking industry. Unlike the past, however, investment in these channels will need to generate a tangible ROI.

9. Deliver On The Mobile Banking Promise
The opportunity to be a 'first mover' in the mobile banking marketplace is quickly closing as more and more financial organizations are introducing products that work on multiple platforms. Bank of America has found that their market leading mobile banking customer base has significantly less attrition than a customer without a mobile banking application. USAA has continued to push the envelope on ways to use the mobile phone for financial convenience including remote deposit capture, receiving auto insurance quotes, requesting proof of insurance cards, etc. While building a concrete business case for mobile banking may be challenging, the marketplace will eventually demand this channel for P2P payments, geolocational applications and even low cost banking alternatives. Next year will also see the first wave of iPad and Android tablet applications that go beyond minor adjustments to current phone applications and leverage the enhanced capabilities of the popular tablet hardware.

10. Reconfigure The Branch Bank Model
The most challenging resolution for 2011 may be the testing and development of new branch banking models in light of the shift in channel use by the consumer. As branches are increasingly used primarily for account openings and small business servicing, the physical and operational configuration of branch networks will need to be evaluated. But what will be the best model for the future? While Citibank introduced a refined branch model late last year similar to an Apple Store, Huntington Bank went in an opposite direction by expanding their branch network and increasing hours and days of operation. With such a significant investment in real estate and human resources to support branch operations, each bank will be testing a variety of options in the next few years with multiple configurations most likely winning based on specific market dynamics.
I am sure there are several more important resolutions that can be added to my list, but there are already more than many of us can handle. This will definitely challenge the ability to focus and to achieve meaningful results especially in an environment of continuous change. Similar to personal resolutions, however, we all need to start as soon as possible and focus our attention on those resolutions that have the greatest impact and opportunity for success.

Let me hear where you will be focusing your efforts in 2011.

A Little Note From BankSimple

After hearing about the vision of BankSimple several months ago, I decided to see if the development of another new online bank would be different. To begin with, I accepted their invite to be part of their beta test once the bank officially launched some time in 2011. Yes, I accepted an opportunity to be on a waiting list to potentially open an account.

As a lifelong bank marketer, I also followed the story of the bank's founders and the development BankSimple (The Buck Stops Here). I was intrigued by the fact that BankSimple would not really be a bank at all, but instead, simply provide a better front-end experience with a myriad of banks being used behind the scenes to generate the highest returns (and lowest costs) for their customers.

According to their web site, the bank was going to require only a single account and one card, use simple language, treat customers as people and not account numbers, eliminate surprising fees and provide a heightened level of customer service. They would provide online, ATM and mobile access to their accounts and would provide financial tools to help a customer manage their money. Sounded good . . . but not much different than almost any bank promise.

Today, however, BankSimple set themselves apart from any of my current or previous banks.

They sent me a personalized, seemingly non-promotional email from a Customer Relations Representative named Rachel acknowledging my request for an invitation to try their bank and asking for my 'story'. Rachel asked for my "loves, hates, quibbles, desires, hopes and dreams" regarding my financial life. Her email used a Helvetica type and had no fancy creative elements included (just like an email from a co-worker or friend).

Doesn't sound like an email that was developed by a committee that then went through a bank's compliance and legal departments after several levels of management approval, does it? Rachel then went on to say that the bank was committed to building the best service a bank can offer and wanted to know "what's up?" (when was the last time your bank asked 'what's up'?). The email was so personal (it was titled 'A little note from BankSimple' and allowed me to respond directly to Rachel@banksimple.com) it begged for a response as to what I would love to see from my bank.

For those who are cynical by nature and don't believe there is a real Rachel, she was just hired ONE WEEK AGO by the bank as one of BankSimple's first Customer Service Representatives with an accompanying press release.

I responded to Rachel with some of my visions of a perfect bank. I also tweeted about the email from Rachel since the experience is so unusual for a bank. I don't know if the dialogue will continue via email, but I was again surprised when I got a response to my tweet about my email (in 10 minutes at 9PM et) from RACHEL!

Interestingly, even if I don't get an email response, the bank (and Rachel) have already surpassed my expectations, and there will be part of me that will feel like my response might have had an impact on the bank's development. Not a bad way to build an affinity and loyalty before the bank has even opens it's virtual doors. And when it comes to word of mouth marketing, I think they did pretty well in my case.

Finally, if you wonder if there is a demand for another online or bricks and mortar bank, simply watch the very robust discussion on Twitter around BankSimple and the desire for a traditional bank alternative. Up to now, this new financial entity has done a lot of things right. It remains to be seen if they can perform to this level once they start to handle money in addition to PR.

What is your bank doing to build trust, dialogue and word of mouth? Does your team have a Rachel?

Revenue Replacement in a New Regulatory Environment

In my travels over the past 18-24 months, a single unifying theme seems to be of primary importance for all of the banks I visit . . . the need to find new sources of revenue to help offset the impact of environmental, competitive and regulatory changes that have occurred in our industry. With the potential of the Durbin Interchange Amendment hanging over our heads, lost overdraft fees from Reg E in our rear view mirror, the ability to pay interest on business deposits and the implications of the Card Act just 18 months ago, bank earnings are being squeezed from all directions.

According to Novantas, the regulatory changes alone have slashed retail banking revenues by more than $50 billion per year compared to pre-crisis levels. To make this number even more staggering, Novantas estimates that the equivalent cost savings needed to offset these lost revenues would entail closing 50,000 branches or would require a 1500% increase in maintenance fees. Neither of these options are feasible.

As banks look forward, while it will definitely be important to control costs across the organization, the immediate challenge will be to focus on ways to generate revenues that are significant and sustainable over time. To do so, banks should analyze opportunities across the entire customer lifecycle including product innovation, repricing, new engagement and cross-sell strategies, channel migration, improved marketing and enhanced measurement of results.

Here are the top ten revenue replacement strategies I believe banks should focus on in today's environment. Some are rather rudimentary, while others may entail a paradigm shift within the organization in order to be implemented. Still others may not be consistent with your bank's brand or position in the marketplace. These strategies were the foundation of a presentation done at the 2011 Louisiana Bankers Association Annual Convention in New Orleans.

• Move Beyond Free Checking: With the implementation of Reg E and the potential impact of the Durbin Amendment, virtually every bank in the country is reviewing their checking product offerings to determine how they can positively impact earnings without negatively impacting their customer franchise. Much of this customer portfolio and product review is long overdue. The reliance on a 'free' lead product where penalty fees from the lowest balance accounts fund the majority of the portfolio is not sustainable. While some banks are building a much more robust segmentation strategy, where the relationship value will be more in line with the cost to the customer, other institutions are looking to a menu based approach, where components of the account (debit card, rewards program, ATM transactions, security services) are priced independently. Integral with this repricing strategy is the need for effective communication of changes and the opportunity to place customers in the best product set for their lifestage and transaction behavior. I cover this in a previous blog post entitled, Minimizing the Impact of Unintended Consequences.
• Focus on Quality Customer Growth: With the cost of new customer acquisition increasing and the quality of many new customers no longer meeting expectations, many banks are focusing their efforts on quality as opposed to quantity of customer acquired. Models are being developed that are based on incremental lift, potential for engagement, balance growth (using tools such as IXI wealth indicators) and likelihood for cross-sell and retention. In addition, many banks are fine-tuning their acquisition strategies to focus on branch trade area, neighborhood level direct communication as well as time tested programs like new mover acquisition. Many of these acquisition programs are at the carrier route level, taking advantage of postal economies. Finally, some organizations have had tremendous success leveraging their web sites, search engines and even social media to drive quality new account growth.
• Improve Customer Engagement: According to a study from Aite Group entitled, Measuring Customer Engagement: Making the Metric Matter, customers who have a higher level of engagement (more money movement, more transactions, online bill pay, direct deposit, more inquiries) are more likely to open another account with their bank in the next 12-24 months (27% vs. 5% for low engagement households), are more likely to recommend their bank to a friend (41% vs. 23%), and have a much more positive view of their financial institution. In addition, a more engaged household is significantly more profitable as shown by numerous research studies and covered in my blog post, A Business Case for Onboarding, where I illustrate the many financial benefits to a robust, multi-channel customer communication process in the first 90 days of the relationship.

Onboarding touchpoint roadmap example

• Restructure Rewards Program: In the past, the majority of rewards programs were funded primarily with interchange income. With the potential for this revenue stream to be negatively impacted by the Durbin Amendment, the structure and underlying strategy for bank rewards programs need to be evaluated. Options that banks are considering include the complete removal of a rewards component from some or all classes of accounts, an adjustment in the value of the reward program currency and even the potential for an annual fee associated with the program. Another strategy is to move the funding of the rewards program from the bank to the retailer with a merchant-based rewards program partnership. Leading providers in this space include Cardlytics, BillShrink, Segmint and Bling Nation as well as home grown options that connect the merchant to the customer. The benefits of a merchant-funded reward program are many, with the primary advantage being the offering of much more targeted rewards to a finite audience of the bank based on online transactions. For more insight into merchant-based rewards, visit my blog post on the subject. 
• Expand Share of Wallet Initiatives: In the BAI Banking Strategies article written by Sherief Meleis from Novantas entitled, Relationship Expansion: Sharpening the Focus, he points out that a bank would only need to increase the amount of business done by each customer by 15% in order to offset the $50 billion revenue shortfall facing our industry. While definitely not a slam dunk by any means, the concept of expanding share of wallet with current customers is far less daunting than trying to increase fees to compensate for the impact of legislation over the past 24 months. According to Novantas, approximately one quarter of deposits ($900 billion) as well as one half of loans ($4 trillion) and half of investments ($3.7 trillion) remain unconsolidated with primary financial institutions. Their research also indicates that as much as two thirds of these relationships are held by customers who are attitudinally willing to consolidate. The key for banks implementing this strategy will be to avoid boiling the ocean or overwhelming the customer with blanket communications. Instead, it is imperative to reach the right customer, at the right time, with the right message using the channel they prefer. A good discussion of some easy to implement cross-sell strategies is available on my blog post from April 15, 2011.
• Shift Debit/Credit/Prepaid Emphasis: While the Durbin Amendment may change the financial benefits of the debit card, it definitely doesn't change the importance of debit as an engagement and payment device. Some banks may be impacting the equilibrium of this payment device by adding annual fees, transaction fees and spending thresholds to the product. It is yet to be seen if these charges will stick or if they have a negative impact on the customer experience. Alternatively, banks can continue to encourage usage of the debit card while expanding their marketing efforts to include the potentially more profitable credit and prepaid debit cards. Serving alternative ends of the demographic spectrum, the appeal of credit cards is usually for people that want to leverage the grace period to their advantage. The appeal of the prepaid debit card is for people that want the convenience of a debit/ATM card without the fees of a checking account. The growth of the prepaid debit market has been significant in both the lower and mid demographic segments as people get frustrated with banking fees or have been closed out of the traditional banking system.
• Optimize Communication Channels: As the number of marketing messages received by each consumer has skyrocketed exponentially over the past decade, the control of consumption of these messages has definitely shifted from the marketer to the consumer. As economic growth has slowed and budget constraints at banks have impacted the amount of funding we have for marketing initiatives, there is a need to leverage less expensive, but potentially more expansive channels such as email, social media and even formal word of mouth strategies. Instead of replacing traditional media with electronic channels, however, banks need to manage a blend of channels that will yield the best results. For most initiatives, it is not an either/or proposition, but a media mix that needs to be optimized for each customer segment and marketing objective. This is definitely an area where a test and learn mindset is needed and where improved analytics are needed to determine channel attribution.
• Deliver on the Mobile Banking Promise: According to recent comScore research, 29.8 million Americans accessed financial services accounts (bank, credit card, or brokerage) via their mobile device in Q4 2010, an increase of 54 percent from Q4 2009. The report also found that preference for online access and security concerns topped the list of reasons why consumers have not yet used mobile banking. With such a skyrocketing growth and with the vast majority of banks now offering mobile banking, strategies need to be set forth that will ensure that mobile banking customers become engaged with their mobile banking provider as opposed to using the channel as a utility similar to an ATM. Studies show that mobile banking can effectively reduce costs related to call center usage and increase retention if the channel is enhanced with Personal Financial Management (PFM) applications and if the channel becomes more interactive and intuitive (a delivery device for rewards). The development of mobile banking strategies also need to include strategies for iPad applications that expand the mobile banking horizon far beyond what can be done on a smart phone.
• Reconfigure the Branch Model: As the use of electronic channels continues to increase, the functionality of the traditional bricks and mortar branch changes as well. Over the past several months, several innovative branch models have been tested including the Citi version of an Apple store as covered on The Financial Brand website. Going a different direction, but still focusing on the branch, Huntington Bank has recently purchased the rights to dozens of supermarket branches, extended hours to include evenings and Sundays and is in the midst of a $70 million branch refresh in which it will make over all of its 608 branches with new digital signage and e-merchandising. A third strategy is to significantly downsize the retail space, recognizing that the opening of accounts, responding to inquiries and handling transactions can be done using a much smaller footprint. The 'right' answer is not clear yet, and may reflect the bank's brand promise more than being strictly a cost or revenue decision. (Discussion on making the ATM channel more productive can be found on my November post)
• Increase Focus on Metrics That Matter: As opposed to being a cost center, marketing is increasingly being looked upon to generate revenue and to be able to show the impact of their programs. Measurements such as marketing ROI, incremental revenue lift, lifetime value and internal rate of return are all metrics that matter to the CEO and CFO and need to be built into all revenue strategies. In addition, where the sales cycle is longer, marketing is now expected to develop Demand Generation programs as opposed to simply lead generation initiatives, nurturing leads much farther in the sales funnel with an eye towards the final sale. I covered the new sales funnel in my blog post on February 26.

I am sure I have missed revenue opportunities that banks are pursuing to replace revenue lost due to recent changes in the marketplace. Can you share some of your ideas on my blog for others to react to?

The Business Case for Onboarding

SELLING STRATEGIES

Over the past several months, I have spoken to large and small groups of bankers from organizations of all sizes and have been surprised by the number of banks that still do not have a formal onboarding process for customers opening new accounts. 

Given the amount of trade press, webinars, white papers and research done on the value of onboarding, I would have thought that virtually every bank would be communicating with customers aggressively during the instrumental 90 days after account opening.

According to a J.D. Power and Associates study, 2011 U.S. Retail Banking Satisfaction Study, one of the most powerful ways to unlock customer value is to build a multi-channel, multi-touch onboarding process that begins at the new account desk with needs identification and extends to a post-sale communication sequence that builds engagement and share of wallet.

In a presentation at the Retail Financial Services Symposium in Miami, J. Michael Beird from J.D. Power and Jean Lubbert from BBVA Compass shared that a strong onboarding process is needed in response to the 'perfect storm' of challenges facing banks including:

• A reduction in core deposit growth from customers opening new accounts
• An increase in customers switching their primary financial relationship
• A rise in the average number of financial institutions considered before final selection

The best onboarding practices shared reinforced results of the same study done in 2009 and 2010, where it was shown that both satisfaction and sales increased with relatively rudimentary steps such as a thorough needs identification, a timely post-sales follow-up, and a series of communications that emphasize early product engagement. In fact, the studies even showed that satisfaction and sales increased with each subsequent contact in the first 60 days up to seven touches.

The good news is that, compared to last year's report, each step in the onboarding process is being done more frequently than in the past. Unfortunately, only 64% of households surveyed indicated that there was any follow-up done (vs. 61% in 2010), with only 17% of the households saying that any contact was made within 2 days.

A new component of this year's study was the correlation between an optimal onboarding process and both the intent to reuse the same financial institution in the future and the intent to recommend the bank to others. According to Beird, "intended advocacy is an additional bonus to implementing a high contact onboarding process". He also shared that BBVA Compass sets the bar on almost all components of a strong onboarding process with a resultant recommend rate at the high end of all banks reviewed.

So, given the potential positive impact on retention, engagement, sales and customer satisfaction, what are the key components of building a business case for onboarding?

When working with clients, I always begin with the impact onboarding has on attrition, since it is both the easiest to measure against a control group and because the financial impact almost always exceeds the cost of the onboarding program. While first year attrition at banks across the country usually range from 20% to 40% (dependent on aggressiveness of a bank's acquisition efforts), a conservative benchmark for first year reduction of attrition is between 2-3% assuming a multi-touch onboarding process. While that may not seem like a significant movement from norm, the cost of this attrition is significant.

In the example above, I provide a very simple calculation using different annual account opening levels, different attrition rates and the financial impact of $400 for each account lost. I use a $400 cost of lost account based on a $200 replace cost for the lost customer (very conservative) and an additional $200 in annualized revenue potential lost due to attrition.

Moving beyond retention, a well constructed onboarding program also has a positive impact on the level of account engagement compared to control groups. For most banks, engagement includes the cross-sell of direct deposit, online banking, bill pay, the active utilization of the debit card and in some cases mobile banking and reward program enrollment.

According to Novantas, the positive impact of direct deposit and bill pay alone can increase relationship value by more than $400. Assuming an increase in engagement compared to control of 5%, the financial impact for a bank opening 10,000 accounts a year would be $200,000, with the impact jumping to $2 million for a bank opening 100,000 accounts annually.

Capital Performance Group found similar results with banks they worked with when evaluating the impact of households adding online banking, bill pay and direct deposit.

Finally, onboarding definitely has a positive impact on average account ownership and share of wallet as illustrated by the 2009-2011 J.D. Power and Associates studies. In my experience, however, the financial impact on cross-sell effectiveness is the most disputed within banks where an onboarding program is implemented due to factors including an inability to set aside a control group large enough to measure product level results and the desire by many banks to focus on new account engagement as opposed to cross-selling during the first 30-120 days of the relationship.

The critical nature of the first 90 days of a relationship has been known to the financial services industry for years but internal obstacles and a lack of focus on organic growth has limited deployment of this foundational program. Today, as the cost of new customer acquisition continues to escalate and the need for revenue replacement increases, the most successful banks are discovering ways to implement and enhance onboarding programs using multiple channels and customer touches. The result is improved retention, increased engagement, accelerated cross-selling, an improved customer experience and optimized customer lifetime value.

Successful onboarding can quickly cover the both the cost of new customer acquisition and the deployment of a robust onboarding program in a very short period. Instead of having a period right after account opening where nobody from the bank communicates with the new customer, you can reach household profitability faster and achieve a quicker return on investment.

I have covered the onboarding and engagement processes extensively within my blog over the past year and will continue to focus on the benefits of using multiple communication channels to generate positive results. I am interested to know how well your onboarding program is going or, if you don't already have an onboarding program, what hurdles to implementation still remain.

Seven Steps to Reduce Offline and Online Bank Product Purchase Abandonment

According to Forrester Research, the number of consumers using the Web to research, buy and manage their financial products has grown steadily. In 2009, 63% of US online adults who researched a financial product did so online, with the number increasing over the past two years. Virtually all products were researched, from mortgages and student loans to savings and checking accounts. Interestingly, more than a third who researched products did so exclusively online.

The Web provides inherent advantages when researching and applying, including the convenience of being able to research whenever the user wants, the ease of comparing providers, and in some cases the ability to open the product or service in real time. While the use of the Web is correlated to age categories (with Gen Y using the Internet more frequently), all age groups are increasing their use of online and mobile channels to evaluate options before purchasing financial services.

Online purchase of financial services varies significantly by product type, with complexity and locational considerations driving the sales process. For instance, while almost half of online adults applied for a credit card online, a far lower percentage purchased a checking account online since convenience is a primary consideration, making the ability to walk into a branch to open an account more feasible.

Building awareness and even consideration online, however, does not guarantee the prospect will apply for or open their relationship online. According to a recent Forrester Research study entitled, Injecting Next-Generation Thinking Into Your Financial Services Acquisition Website, almost 40% of online households who researched a financial product online used another channel to complete the sale. This cross-channel selling behavior provides both opportunities and challenges for banks.


Source: Forrester Research 2011

In the example above, a customer may gain awareness through mass media or even direct or online channels, only to further research the service online, over the phone or in person, with the actual purchase of the product or service culminating either online or in a branch office. Each of these steps in the buying process (or sales funnel) can lead to abandonment of the process by the prospect due to complexity, competitive considerations, other prospect priorities or poor sales inquiry follow-up at the bank.

While research indicates that the success rate of moving a prospect from the awareness to consideration to purchase stage varies significantly depending on the product, the research channel, and the ultimate sales channel, the opportunity diminishment can be 80% or higher. In fact, with lending products where there are numerous steps between the awareness stage and loan closing, close rates can be as low as 10% of the shopping universe.

This sales inefficiency provides many opportunities for banks at a time when the cost of new customer acquisition has never been higher and the competition for customer share of wallet is extreme. Some of the ways to improve conversion of awareness to sales include:

• Provide online information from alternative perspectives: Some people will shop for a specific product (credit card), while others research to solve a specific problem (debt consolidation), while still others may inquire from a lifestage perspective (student). A bank website and search engine strategies need to be built with this interplay in mind, providing alternative paths to reach the best solution.
• Leverage dynamic and customized content: Whether the Web, the phone channel or in the branch system, dynamic and customized content needs to be developed to assist in moving a prospect from the awareness to the purchase stage. Understanding segments, purchase intent and competitive position in the marketplace can greatly improve results both online and offline.
• Capture prospect insight from all channels: Surprisingly, some of the newest channels (online) have the best refinement of insight capture through digital tracking and jump page data collection. Alternatively, far fewer banks capture insight from prospects who indicate potential purchase intent by phone, in the branch or through direct mail. Without a formal method of capturing information on how to follow-up on inquiries, we greatly reduce the potential for sales success.
• Develop a multichannel follow-up strategy: In the same way that prospects leverage many channels in their consideration process, it is important to follow-up on all leads using multiple channels. Dependent on the level of insight capture done when the prospect initially inquired about your product or service, quick and consistent follow-up on leads using all channels possible will improve chances for success.
• Monitor the sales funnel: As important as a strong follow-up strategy, the monitoring of each prospect in the sales funnel is needed to better understand the paths prospects take to purchase different products and the success of your follow-up efforts in generating a strong close ratio. Similar to online navigational pattern monitoring, internal monitoring of prospects allows for the development of a sales waterfall that can assist in the identification of service and communication gaps that depress sales results.
• Develop metrics for improved results: Focusing only on the beginning and end of the sales funnel oversimplifies the opportunity cost of lost sales. By better monitoring each stage of the sales process from awareness to consideration to final sale allows for the potential improvement of ROI. For many banks, an improvement of 5-10% in the consideration stage and similar improvement in the closing stage of the process can improve results by more than 100%.
• Online and offline retargeting can provide big returns: Sending an email, making a call or delivering a piece of direct mail to a person who has abandoned a shopping cart has been found to be the most efficient online strategy for all categories of online merchants. While banks don't have online shopping carts per se, they do have abandoned purchase processes for a number of reasons. Retargeting allows you to show your ads to visitors that left your website (or other channel) as they surf elsewhere on the web. These potential customers can get highly targeted ads that are designated to entice them to return to your website and convert their visit into a completed action. Many studies have found that the open rate on these emails exceeds 50%, while the conversion rate can exceed 20%.

In a content-driven world, with the number of messages consumers receive on a daily basis continuing to increase, making follow-up communication personalized and pertainent is extremely important. Therefore, any form of sales communication (even if the prospect indicated interest) needs to respect the prospect's time and privacy.

In addition, the timing of the communication should reflect the channel that the prospect used to shop for a service. In the first 24 hours following an online abandonment, 54 percent of returning customers who make a purchase will do so within the first few hours according to research from the remarketing firm SeeWhy. In other words, more than half of customers will abandon the cart for good if not remarketed within 24 hours of the abandonment. Alternatively, if a prospect is shopping for rates or asking questions about a checking account fee schedule via phone, a person should reconnect within 24-48 hours to answer any follow-up questions.

How many channels can a prospect use to investigate one of your services? Do you capture insight from the shopper and follow-up in a timely manner to determine if any other questions can be answered? Do you measure the effectiveness of these efforts and maintain a waterfall illustrating where improvements can be made? Do you know the cost of lost potential sales if effective management of the sales funnel does not occur?

I am interested to know how your bank manages this process. I also discussed the various views of a sales funnel in a world where prospects enter from various channels late last year on this blog.