the growth challenge: strategies to drive results€¦ · establish consistent customer engagement...

Iowa Bankers AssociationFebruary 6, 2020

©2020, HaberfeldPresented by Dr. Sean C. Payant 1

Dr. Sean C. PayantChief Consulting Officer

Thursday, February 6, 2020Des Moines, IA

The Growth Challenge:Strategies to Drive Results

A C C E L E R A T I N G G R O W T H

PURPOSEUnderstand what it will take to grow your

bank and succeed at the highest level

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Some Background for Context


Haberfeld Update

Rank No. Branches Institution Name

1 5,623 Wells Fargo Bank

2 5,080 JPMorgan Chase Bank

3 4,340 Bank of America

4 3,023 U.S. Bank

Real #5 2,463 Haberfeld Clients

5 2,428 PNC Bank

6 1,794 Branch Banking and Trust Company

7 1,457 Regions Bank

8 1,247 TD Bank

9 1,176 KeyBank

10 1,174 SunTrust Bank

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It isn't what we don't know that gives us trouble…

Will Rogers

it's what we think we know that just ain't so.


People

Products

Processes

Promotion

How is growth created?

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People

Products

Processes

Promotion



Develop Your Bank’s People

1. Managers must be trained to lead, not just manage.

People

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Not equipped with the

skills to lead.80%

People


In-Branch Sales

Effective branch management is

the most important factor in success!

People

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Case Study: Manager Impact

56.20%Increase

44.63%Increase

24.78%Increase

Branch 1 Branch 2 Branch 3

People




2. Implement on-going, weekly training initiatives.3. Increase engagement by creating internal value.4. Improve employee retention.5. Establish consistent customer engagement

practices.

People

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practices.

People

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Create Value for EmployeesIn

ves

tme

nt

People





practices.

People

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Up to 35% Turnover in the banking

industry.

People


6-9Months of salary to replace.

People

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What’s the price?

People


Why turnover?

People

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50% of employees leave a job to get away from a boss

People





practices.

People

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Take the emotion out of the selection process when prospects come into your branches!


People

Products

Processes

Promotion


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Have a Compelling Offer

• Confusing product – if your employees don’t understand it, your customers never will.

• Too many asterisks or too much fine print (i.e., what’s the catch?).

• Too many variables for the customer to consider.

Products


Secret to Good Product

• Good for the customer

• Simple and logical

• Easy to sell and easier to buy

• Makes money for the bank

Products

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Simple Accounts – Retail

Mystery shopping results indicate employees do betterwith a simple account menu:

• 44% better at recommending the best account for the consumer

• 21% better at closing the sale

• 23% shorter sales presentations

Products

Source: Haberfeld Research


Retail Portfolio Cross-SellProduct Type Haberfeld Client Ratios Haberfeld Client Balances

Checking 1.575 $5,160

Savings 0.474 $7,272

Money Market 0.032 $70,453

CD 0.072 $28,958

IRA 0.026 $19,141

HSA 0.022 $2,709

Consumer Loan 0.078 $11,720

Line of Credit 0.022 $9,370

HELOC 0.035 $35,528

Mortgage 0.062 $128,672

Business Checking 0.110 $17,455

Total (Products) Relationships 2.508

Total Deposits $18,391

Total Loan Volume $10,341

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Plus Services

Products Ratio

Products 2.508

Services

Debit Card 0.711

Bill Pay 0.137

Online Banking 0.573

Mobile Banking 0.348

eStatements 0.214

ACH 0.594

Direct Deposit 0.553

5.638


Retail Account Economics

Retail Checking

1,651 Checking

1,542 Cross-Sell

$3,193 NPV*

*Over 9.14 years

Products

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Simple Accounts – Business

• Do you have a free business checking account?– If yes, how free is it – 100 items, 150 items, 300

items?– If no, why not?

• Why complicate the process – here’s what the data shows. . .

Products


Business Case Study New Accounts

Average Number of Transactions

Number of Accounts Percent of Total

0-50* 2,848 85.97%

51-200 386 11.65%

201-500 73 2.20%

500+ 6 0.18%

Total 3,313 100%

*55% of new accounts had fewer than 10 monthly transactions


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Balances and Cross-Sell by Transactions

TransactionsAverage Number of

TransactionsAverage Balances Cross-Sell Relations

0-10 5 $4,301 3.47

11-25 18 $6,274 4.54

26-35 30 $6,249 4.53

36-50 45 $11,856 4.70

51-100 75 $13,011 4.70

101-150 125 $18,132 5.39

151-200 175 $18,288 5.39

201-300 250 $27,669 5.63

301-400 350 $37,392 6.97

401-500 450 $32,675 6.97

>500 550 $46,124 6.97



Business Portfolio Cross-Sell

Cross-Sell Product Ratios RatioAverage Balance

Business Checking 1.521 $29,021

Business Savings 0.069 $17,702

Business Money Market 0.052 $126,743

Business CD 0.024 $77,214

Business Loan 0.206 $159,914

Business Line of Credit 0.039 $97,297

Business Mortgage 0.108 $462,427

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And They Bring Their Retail Products Too…

Cross-Sell Product Ratios Ratio Average Balance

Checking 0.850 $10,793

Savings 0.377 $9,561

Money Market 0.058 $98,971

CD 0.080 $39,615

IRA 0.026 $18,114

HSA 0.032 $3,480

Consumer Loan 0.069 $18,844

Line of Credit 0.048 $3,067

HELOC 0.040 $43,382

Mortgage 0.093 $176,205

Total Relationships 3.692


Generally Higher Retail Cross-Sell Balances

Retail Product All Retail CustomersBusiness Customers

with a Retail Account

Multiple

Checking $5,160 $10,793 2.09

Savings $7,272 $9,561 1.31

Money Market $70,453 $98,971 1.40

CD $28,958 $39,615 1.37

IRA $19,141 $18,114 0.95

HSA $2,709 $3,480 1.28

Consumer Loan $11,720 $18,844 1.61

Line of Credit $9,370 $3,067 0.33

HELOC $35,528 $43,382 1.22

Mortgage $128,672 $176,205 1.37

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Business Account Economics

Business Checking

4,599 Checking

8,053 Cross-Sell

$12,652 NPV**Over 9.71 years

Products


People

Products

Processes

Promotion


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Processes

Remove Barriers

• Do your policies create or remove barriers?“Does my spouse need to be here?”“What forms of ID do I need?”

• Do you pre-screen customers in order to qualify for an account?


Account Screening – Client Data

Category Account Screening No Account Screening

OD/NSF Frequency 2.07 2.72

Principal Losses $4.66 $6.83

Account Screening Costs $7.51

Net Fee Revenue (after losses & costs)

+$25.12

Account Openings per Branch per year +21


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Account Screening – Recent Case Study

Accounts Opened 202

Accounts still active 157 78%

Accounts with charge-off 21 10%

Flagged as “Would not have been opened with account screening.”

Fee Income Analysis – 7 Months

Gross OD Income $15,600

Debit Card Interchange $4,100

Charge off $4,612

Net Impact* $15,088

*Does not include savings from cessation of account screening inquiries.



People

Products

Processes

Promotion


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Target Likely Prospects


Promotion


Driving ResultsDemonstrated Convenience

Promotion

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Driving Results

Demonstrated Convenience

• They live around or are businesses near your branches

• They are the neighbors of the customers you already have

Promotion


Driving More Traffic: Demonstrated ConveniencePromotion

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Driving ResultsPredicted Convenience

Promotion


Driving Results

• They work around your branches

• They shop nearby or eat nearby your branches with regularity

• They walk by or drive by your branches

Predicted Convenience Through

Promotion

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Integration of Big Data

(GPS based data points with some cell data)

150Million devices

150Activity

points per day

Trip frequency within 400 meters of

client branches

Promotion


Driving More Traffic: Predicted ConveniencePromotion

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Impac

t

Investment

Referrals

Traditional

TV & Radio

Newspaper

Billboard

Targeted Direct Mail

In-branchMarketing Traditional

vs.Digital

Channels


Targeted Direct Mail Considerations

Addressed:Dear Neighbor

Promotion

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Convenience: Branch locations

Promotion



Compelling Offer: e.g., free

checking, rate, incentive

tiebreaker, etc.

Promotion

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Comparison:We are simply

better than the competition.

Promotion


Impac

t

Investment

Referrals

Traditional

IP Targeting

TV & Radio

Newspaper

Billboard

Targeted Direct Mail

In-branchMarketing

Paid Social

SEM/PPC

SEM/Display

Mass Email

Digital

Traditional vs.

DigitalChannels

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Digital Marketing

1 2

1 1Proactive Reactive

Promotion


Flexibility of Digital Marketing

Source: Novantas© © The Financial Brand

Promotion

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1

1Proactive

Targeted Display

Sum of EstimateOA Score

Mobile Predict Score 1 2 3 4 5 6 7 8 9 10 11 12 14

Grand Total

0 42,034 2,424 639 355 51 219 174 140 90 10 46,1361 17,827 3,726 800 22,3532 20,886 576 1,037 385 22,8843 17,664 1,961 1,304 393 969 322 395 23,0084 13,629 6,480 1,334 333 21,7765 11,394 4,783 2,813 414 404 481 485 379 21,1536 15,543 4,832 1,848 782 1,039 560 24,6047 16,186 2,799 1,031 1,121 600 862 22,5998 11,769 2,867 3,303 1,067 466 416 662 344 20,8949 15,876 2,823 2,138 478 606 21,92110 16,336 5,662 1,330 23,32811 12,862 7,787 377 391 629 22,04612 10,227 6,392 1,395 163 18,177

Grand Total 222,233 53,112 19,349 5,156 3,138 1,255 1,866 3,019 598 913 140 90 10 310,879

Audience Selection


Display Ad Types

Brand-Focused

Promote a specific product in which you have an advantage

Product-Focused

Highlight a distinctive of your bank—what makes you special?

USP-Unique Selling

Proposition

Build awareness and name-recognitionProduct e.g., free checking, compelling rate offer

Brand Increase awareness of your institution, get you front-of-mind in your market

USPWhat makes you special? e.g., History in the market, local decision-making

Promotion

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2

1Reactive

Search driven

Promotion


Clicks directed to Landing Page

Clicks directed to your web site

Promotion

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Advertising: Three Factors

1

Use the right media

2

Use the right frequency

3

Have the right message

All of this directed to the right audience!

Promotion


Advertising Strategy

1. Use the right media

• Recommendation is highly targeted, data driven traditional and digital marketing channels based on your bank’s data and modeling

• Spend in rank order of ROI

• Continue to optimize frequently

Promotion

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2. Use the right frequency

• Every six to seven weeks

• Target “double-whammy” Fridays

Promotion



3. Have the right message

• Your Compelling offer:• What’s in it for consumers?• Why should they pick your bank?• What makes your bank different?

• When prospects are looking to make a change, you must give them a reason to choose you!

Promotion

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Results


Retail Checking Portfolio –Ten Locations

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Retail Checking Deposit Growth –Ten Locations


Business Checking Portfolio –Ten Locations

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Business Checking Deposit Growth –Ten Locations


People

Products

Processes

Promotion

The Key to Growth: Doing everything right all the time . . .

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Contact Me AnytimeSean C. Payant, Ph.D. | Chief Consulting Officer

402-323-3614 (Office)402-440-0947 (Cell)

[email protected]

Join us for an Encore Webinar:

Thursday, February 27, 20201:00 – 2:00 PM CST

https://www.haberfeld.com/encore-webinar

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the growth challenge: strategies to drive results€¦ · establish consistent customer engagement...

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