So much has changed over the past several months that while revenue growth has likely always been a priority for your organization, the greatest opportunities for growth may look considerably different as a result of the effects of the COVID-19 crisis. As you start to make strategic plans for 2021, consider maximizing new opportunities by meeting unique consumer and business needs that have emerged in the past six months. The climate looks different now because of COVID-19, and so should your planning.
Maximizing Mortgage
As mortgage continues to go strong and with rates looking to stay where they are through the remainder of 2020 and beyond, it behooves you to continue to promote your offering to make the most of this opportunity. The refi opportunity is alive and well. Target those prospects with a strong refinance message as they seek lower payments or cash-out options.
What percentage of your customer base consists of single service mortgage households? Develop a process to cross sell these households and strengthen the relationship. One client saw the household value increase by 43% with the addition of one more product. The household value for a mortgage household with five products increased by 173.2%. Develop and integrate a cross sell effort into your mortgage application process to capture the households and drive revenue.
Flight to Safety
Market volatility and overall uncertainty has had an impact on customer behavior. It’s important to understand what is driving your customers and have a strategy for it. While some deposit customers are looking at their overall long-term returns, many are seeking a flight to safety – a temporary escape from the market volatility. What is your flight-to-safety strategy for deposits?
Overall, deposits are up 15% since February, and national and regional banks are increasing their acquisition targeting with large incentives for account opening.
Some customers are migrating to investment, planning, and advisory services. A recent survey by Nationwide reported that 24% of respondents (aged 25 to 60) engaged a financial planner for the first time within the last six months. People are feeling the crunch of these times, and with 80% of people reporting they feel that they’ve lost control, it seems a natural step for them to gravitate toward long-term planning.
Seek Non-Interest Income Opportunities
For many FIs, it will be imperative to drive non-interest growth, as well. Explore these alternative sources of growth and include these messages in your customer expansion efforts. Encourage debit card usage, optimize your overdraft programs, sell mortgage servicing, and explore other timely fee-based services, such as alternatives to Pay-Day loans and non-traditional business banking services.
Preserve the Base
Understanding your customers and knowing who is likely to have needs will better equip you to proactively engage them with outreach for retention and wallet share growth. As so many are feeling a loss of control with regards to their financial well-being, maintain your positive perception and relationship by delivering expertise and solutions. Take a look at your customer base and craft your messaging accordingly for planning, product recommendations, and service needs.
Now is not the time to go radio silent. As we saw in 2008 and 2009, banks who continued to emphasize their brand awareness messaging came out on top. Maintain your market spend and stay visible in your marketing efforts. Share of voice increases share of market, but more importantly, it provides your customers with much needed reassurance during these volatile times.
Study your customer database to identify and target customer segments with high future growth potential. There’s been much talk about marketing to the Millennial customer household for quite some time. Gen Z (those born between 1996 – 2015) should be on your radar as you look forward. Gen Z likely accounts for a very small percentage of your customer base right now – unsurprising as many of these customers are not likely to be heads of household…yet. But overall population of Gen Z’ers is comparable to Millennials – and planning ahead to be an attractive option for this demographic is essential. This group will have high expectations for your digital offering and the way you deliver products and services.
Your digital offering has been growing increasingly important over the past decade, and the demand for tools that are better, faster, and more secure will not be abating any time soon. Limited access to in-person banking throughout the COVID-19 times significantly drove mobile banking adoption, and these new users don’t show any sign of trading convenience to return to the branches. Evaluate and improve your digital banking tools. Customers want to do all of the things available to them at the branch – and they want to do them safely and securely. Do your tools allow them to execute their day-to-day banking needs easily and seamlessly? If not, identify the gaps in your offering and prioritize improving the online experience.
The challenges of 2020, like any other challenge, bring equal amounts of opportunity. By thinking deeply about how consumer and business needs have changed, you can successfully craft and implement your strategic plan to not only retain what you have, but grow. If you’re not sure where to start, give us a call and we can help.