By John J. Coffey, C.P.A. and Gene Palm, www.profitres.com

The Need to Grow

True or false – your customers buy more and more of your services each year, their balances are constantly increasing making them ever more profitable, and you’ll never have to prospect to find new customers ever again.  Yeah, right!  Let’s face it.  Your job as a marketer depends on growing the bank’s business from existing customers and from prospects that become customers.

You can market your services to prospects through many different means, but the only method that is truly measurable is to use a prospect list and know who these people are before you even begin your marketing efforts.  The real question is, “Which people should be on this list?”  The answer of course is, “It depends on what you are trying to accomplish.”

Profiling Your Customers

First, you need to know some things about your existing customers before you try to sell to prospects.  For instance, it’s a good idea to know who your most profitable customers are, what products they use, and how they use those products.  In order to compile this information, you’ll need to reconcile the profitability data within your CRM to your financial statements.

In addition, it’s good to know some personal attributes such as age, income, marital status, presence of children and occupation.  It’s also very valuable to know your customer’s product purchase behavior such as home ownership (together with home value and length of residence), type of credit card and type of vehicle owned.  You can easily append this demographic data to your customer’s records within your CRM.

You can also combine profitability data and demographic data with geographic data on your customers, such as proximity to the nearest branch and the census tract where they live.  Once you have this 3-dimensional view of your best customers your can find prospects who look like them and live where they live.

For instance, if you want to sell more home equity lines of credit, first use your CRM to examine your most profitable customers who are using this product and segment these customers by their age and income levels along with their home value.  Then, locate the largest groups of these customers geographically by their proximity to the nearest branch.

Another example would be prospects that are very time sensitive.  For instance, if a prospect has recently moved to within a 10-minute drive of your branch, they are a prime candidate for a new checking account – for about 2 weeks.  Fortunately, the U.S. Postal Service has a list of all of the people in the country who have changed their address in the past 2 weeks.  This list, when combined with desirable demographic data as well as proximity data to your branches, will serve you well in your marketing efforts.

The Prospect List

The profiling of your existing customers is the hard part.  Once you have completed this profiling, you can contact a list company and order a prospect list that contains the desired demographic and geographic selection criteria for these prospects, which you can easily import into your CRM.

After you receive the list, you need to make sure that none of your existing customers are on it.  In order to delete these duplicate names or “de-dupe” the list, you will need to import the prospect list into your CRM and use the CRM’s householding algorithm to standardize the names and addresses on the list.  After this has been completed the names on the list can be compared to your customer names and your customer names can be deleted by using a “Merge – Purge” process.

You should note that the selection criteria of the prospect list is far more important than the artistic production of the direct mail piece.  You can have a very expensive, slickly produced direct mail piece, but if you send it to the wrong person, it’s a waste of money.

Measuring Your Results

In order to justify the expense of your marketing campaign, you need to track the results of it.  To do this, you will need to import the prospect list into your CRM’s campaign manager.  This program compares your original list of prospects to new customer data from subsequent data loads from your core system.  You will find that some of your prospects purchased exactly what you wanted them to and are using your products profitability.  On the other hand, you will find that some of your prospects purchased something completely different than you expected.  This ancillary purchase behavior can be included in the total ROA of your marketing campaign because these prospects wouldn’t have purchased anything from you had you not initially contacted them.

You’ll never have a utopian bank where you have all the customers you’ll ever need; however, it’s much easier to market to prospects than ever before by using these new methods and technologies.  Happy hunting!