Position your bank to retain and add new customer relationships in 2021 with these customer retention strategies.
During this downturn, customers are more likely to maintain or increase deposit account balances and less likely to move their accounts to one of your competitors. Deposit customers don’t tend to make major financial moves during times of economic instability. Unless they sense their bank is in trouble, they generally hunker down and stick with what they’ve got. And in today’s market, the inclination of most customers likely will be to preserve cash given the uncertainties they might face.
Let’s put a positive spin on a troubling situation and assume that states will be able to begin reopening by the end of this year. This likely means an economic recovery in early 2021. At that point, consumers might feel more inclined to start shopping around for a new bank – particularly if they feel like they’ll be able to get better service, higher deposit rates, or incentives from a competitor.
With the right elements in place, your bank could be positioned to not only retain your current customers and increase wallet share but also establish new relationships. Competitive rates are always important, but success in retaining and gaining depositors when the economy starts to turn around could come down to the following areas.
Customer relationship management
If you’re delivering the majority of your banking services via online and mobile platforms, you should be infusing those with customer relationship management (CRM) technology to collect user data and track activity. As you do, you can improve your user interfaces for better engagement, figure out which new services you might want to add, and determine how to contact your customers in the best ways and at the best times.
Aided by CRM systems, your personal bankers can reach out directly to customers about service offerings that are aligned to fit their needs. For instance, if your CRM system prompts you that one of your depositors has a child who’s starting kindergarten, a representative who has a relationship with that customer could send out a communication about opening up a supersaver account for children. Generation X and millennial customers in particular are going through life milestones right now that might require your services – auto and home loans, retirement accounts, college savings accounts, and more. And the more business you do with customers supported by dynamic customer solutions and superior customer service, the more likely they will be loyal over the long run.
Proactive, relationship-based selling should be coupled with a strong, integrated marketing function that’s aligned to business strategy and compensation programs. When the worst of COVID-19 is behind us, the months that will follow could warrant a big return to multiplatform marketing campaigns, with collateral ranging from postcards and packets to outdoor advertising. And with sound market research, you can optimize those efforts.
The right products for your customer base
Do you have the right products to meet the needs of your retail customers, including commercial customers who can bring in big deposit accounts? Do you have the right cash management products with all the features that your commercial customers want and need? Do you have the right marketing and expertise to demonstrate how your cash management services can help your customers run their businesses more efficiently and effectively? Do you need to allocate capital in this area to retain customers and grow wallet share? For your retail customers, what mechanisms are in place to measure the success of your products? How often do you analyze product effectiveness, and what is it telling you? The answers to these and other key questions can tell you if you’re on the right track for retaining customers and adding new ones.