September 24, 2007: Lincolnshire, Illinois. This study, sponsored by The Biltmore Group, considers the
response rate (percentage of households adding additional products) of customer
households new to the institution.
The on-boarding
technique studied involved mailing one personalized letter to the targeted household
per month for three months. The letter featured a product recommendation,
but otherwise included no special offers, incentives or inserts. At all institutions studied, the on-boarding
program was just one facet of an on-going, comprehensive Matrix Mail cross-sell program.
Data was collected at a
variety of institutions throughout the Midwest and East between 2003 and 2007.
Institutions are identified only by approximate asset size. Most respondents received three letters in a three month period, although some may have received as few as a single letter, and as many as four letters in four months. Measurement is for 90 days following receipt of the last letter.
Reported response rates are point-in-time and as such may be influenced by seasonal product demand. Taken as a whole, however, the response rates provided here suggest that on-boarding programs should provide a lift over control groups of 100% to 200%, with typical response rates near 10%.
Response rates varied, and may reflect existing capabilities of front-line staff to effectively cross-sell at the time of account opening. Also, results generally seem to be
strongest in the first year of the program before diminishing slightly. It is unlikely that the slight decline in response rate over time is explained by changes in the characteristic of new customers. More likely, as the on-boarding process
becomes more familiar at an institution, employee selling capabilities improve.
Response Rates Compared to Control Groups
On-boarding Control Time
Institution Matrix Group Lift Interval
$10 Bil Midwest 14.0% 0.43% 3185% at
2.5 years
6.02% 4.65% 30% at
2 years
$8 Bil Midwest 2.5% >0.05% 4900% at 3
years
2.3% >0.05% 4500% at 2
years
7.7% 0.8% 862% at
1 year
$4 Bil Midwest 19.0% 5.5% 245% at
2 years
17.4% 7.2% 142% at
1 year
Response Rates from institutions that did not use Control Group comparisons:
On-boarding Time
Institution Matrix Interval
$8 Billion Midwest Holding Co. 5.2% at 18 months
5.6% at 6 months
$3 Billion Eastern Holding Co. 10.1% at
2 years
10.1% at 1 year
$1 Billion Midwest Bank 13.1% at
2 years
$900 mm Midwest Bank 11.5% at 1 year
$800 mm Eastern Bank 6.2%
at 1 year
7.3% at 6 months
$730 mm Eastern Bank 8.1% at 18 months
7.1% at 6 months
$600 mm Midwest Bank 11.4% at 1 year
$400 mm Midwest Credit Union 12.6% at
18 month
8.0% at 6 months
$300 mm Eastern Bank 10.4% at 2 years
11.0% at 1 year
$400 mm Midwest Credit Union 15.1% at
4 years
7.7% at 3 years
11.2% at 2 years
37% at 6 months
$200 mm Midwest Credit Union 9.0% at
1 year
9.9% at 6 months
For more information about techniques for overcoming attrition, improving cross-sell ratios, as well low-cost, automated on-boarding systems, contact Mark Rodrigues, president, The Biltmore Group. 430 North Milwaukee Avenue, Suite 5, Lincolnshire, IL 60069. Direct Line: 847-276-2676.
