Customer Cash Flow Analysis: behaviour to bank on

It is no secret that new money deposits and loans and retention of blaances are the keys to portfolio growth. Yet many banks don’t actually measure or manage to these simplest of performance objectives. Are they chasing the wrong goals? It is actually true…most banks don’t have...

Deposit services: consumer value worth paying for

The outstanding value delivered every day to consumers by core demand deposit account (DDA) services through retail banking operations of consumer banks is getting lost in the currently fashionable cacophony of media bank bashing. As an industry we have been remiss in communicating just how good we...

Event detection versus transaction detection as marketing action triggers

Information management strategy lags the development of technology in most industries, and banking is no exception. We have seen the march of progress towards customer intelligence from initial customer identity management in the late 1980s through consolidated customer position snapshots (Customer...

Unprofitable Customers: Naughty or Nice ?

Customer value helps identify the top tier customers we need to focus retention activity on, but what of the other 80% of customers who generate nominal or even negative contribution? Are they naughty or are they nice to have in your portfolio? This question has been troubling strategists and...

The cost of underutilizing analytics

I recently had the pleasure of hearing the thoughts of several community members concerning the state of analytics in their banks. Interestingly there appears to be a widespread sense that "it is tremendously underutilized due to lack of analytics resources". This came as a real surpise after the...

How much of your sales are really new money ?

Are you getting value for your investment sales commisions ? Or are you paying your sales people to churn the book ? It is often difficult to tell what the basis of commissions should be for asset gatherers. Only about 15% of deposit growth comes from new customers, so targeting and rewarding new...

Customer Lifetime Value

There are many definitions of CLTV floating around, and even more views on how it should be used. We thought it might be useful to cast it open to discussion here after sowing some initial seeds...please feel free to weigh in with your perspective. In our view, CLTV is an overrated metric for...

Revenue / payroll dollar : a driver analysis technique

Each recession I like to revisit some old gems like this... they never seem to lose their relevance. Revenue per payroll dollar is a key metric to evaluate the efficiency of any service business and banking is no exception. It's common knowledge that staff related costs are the most controllable of...

What is a cross-sale, anyway ?

We all want to cross-sell more to our customer base, but most institutions have surprisingly poor metrics for this strategic activity. Research has firmly established that customers with multi-product relationships actually do show higher value, lower price elasticity and lower propensity to leave -...

Rediscovering retail deposits

It is no secret that banks throughout the world are rediscovering the importance of retail bank deposits as a stable source of low cost financing, especially in comparison to raising capital in this financial environment. However even deposit taking is not something to be undertaken without caution,...

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