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The creation and implementation of financial institution customer retention
strategies, including bank customer retention strategies is one of the core
strengths of the Genroe organisation.
There are a range of strategies that can be implemented
and we tend to summarise them based on a customer's position in the customer
lifecycle. The lifecycle is shown below along with the value that different
types of customers contribute to the business at different parts of the cycle.
New
The single largest group of customer retention strategies that can be
implemented in the New section of the customer lifecycle is Onboarding.
Onboarding is the process of bedding a customer into your organisation and
includes ensuring that their personal data is correct, that they understand
the products they have purchased and how to quickly contact the organisation.
We have proved time and again that customers that are properly onboarded will
stay with the company longer and spend more money than other customers.
Existing
The best bank customer retention stategy for existing customers is to
classify each type of customer (silent attrition, ideal and unhappy) and
create appropriate initiatives to change their behaviour.
For instance customers in silent attrition are those that have reduced or stopped
using a product but where the account is still open. Examples for instance are
credit card accounts with little or no spending. For these customers you must
determine why they are no longer using your product (are you are their "back of
wallet" card) and create initiatives to change their behaviour.
Exiting
Customers that are Exiting are those customers that have started the process
of moving their business to another company or are in the process of considering
that move. The first step in creating bank customer retention strategies for
Exiting customers is to identify which customers are in each camp.
Indicators of customers considering a move include requests for loan payout details.
For customers in the process of moving their business you will need to understand
the product drop cycle, i.e. the order in which customers drop your products
before leaving. With this information you can create effective customer retention strategies
to target those customers.
Exited
Generically, strategies that are aimed at recapturing customers that have left
the organisation are called Winback strategies. This is the most expensive
and lowest ROI place to try to implement your bank customer retention strategies.
Mentally customers have already moved to another organisation and it takes a
large inducement to bring them back.
If you do choose execute Winback strategies then you will need to carefully
manage the level of incentive that your staff can offer to customers. For
instance you will need rules to tailor the incentive level to each specific
customer in order to ensure that the level of inducement is not larger than
the future business generated by that customer.
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