By Todd Hoover
Your financial services firm serves a wide range of consumers, each with varying financial needs and goals. But not all consumers offer the same potential for your brand. Especially when consumers face inflation and economic uncertainty, like many are currently.
In fact, about 20 percent of households hold more than 84 percent of the nation’s wealth. These are the consumers that hold the most opportunity for growth — they invest more, spend more, and pose less risk than other consumers. Despite higher prices, these consumers continue to buy their desired goods and services while still accumulating wealth for the future.
The challenge is to attract these valuable consumers, meet their savings, investment, and credit needs, and provide exceptional customer service. This will result in long-term relationships and a higher ROI for your firm.
Actionable, data-driven solutions to attract the right customers and grow share
With so many financial products and services available to today’s consumers, financial marketers need additional data insights to help drive their strategies and focus on high-potential consumers. By using advanced insight on the overall asset and credit picture for prospective and current customers, marketers can support many customer growth initiatives. In part 1 of this 2-part series, we will explore the first three of seven ways for financial marketers to drive customer growth.
1. Target affluent, high-value consumers for new investment and banking relationships.
If you are looking to expand your customer base for your wealth management or deposit businesses, then incorporating a more complete view of consumers’ asset potential can help you reach wealthy audiences. For example, target prospects that are likely to hold over $1 million in assets. Leveraging asset insights (instead of survey information) has helped leading firms steer their prospecting campaigns toward affluent investors and savers.
2. Expand and refine your lending audiences.
Consumer borrowing is on the rise. But, consumer finances have fluctuated over the past few years due to inflation and job turnover. At the same time, over 77 million consumers have thin files or are unscored. However, lenders have plenty of options to expand their view of consumers’ credit situation to fuel acquisition campaigns, expand access to credit, and better address risk in today’s world.
For example, lenders can refresh their acquisition models with more recent credit data. This could provide a 15 percent lift in performance right from the get-go.* Additionally, lenders can go beyond credit scores to explore data on a household’s likely affluence or that sheds insight on everyday payment behaviors, employment, or income. Gaining a broader view of household credit can help lenders refine audiences while managing risk.
3. Uncover hidden opportunity to grow wallet share
If a financial marketer could assess its current customer base and capture 1 percent of held-away asset and credit balances, that could translate into millions of dollars. After all, many consumers spread their wealth and their borrowing across multiple firms. This “spread” can be a puzzle for financial marketers.
Adding insight on households’ likely total assets or ability to meet financial commitments to a firm’s own data can open new doors for cross-sell efforts — and help capture both incremental assets as well as low-risk credit balance transfers.
The economy is continuing to fluctuate. Financial marketers are starting to shift priorities and reduce budgets. But, one goal remains a priority for many financial firms. The goal of finding consumers that offer the most potential for their brand. While some consumers are affected by inflation and income stagnation, others continue to spend and invest while offering less risk. These are the consumers that financial marketers can focus on to find and keep.
4. Maximize the customer experience
Delivering an optimal experience is critical to both attract new customers and keep your best. Financial marketers can use consumer financial insights to recognize best consumers across all channels, deliver premium treatment to high-value customers, and personalize offers based on financial needs. These efforts can pay off. One bank generated $700 million in new revenue by identifying and reassigning high asset customers to a premium service channel instead of relying on internal data.
5. Optimize cross-sell to deepen the relationship
Moving customers beyond a single product (i.e. just a deposit customer, just a credit card customer) can be a challenge. By mixing up audience targeting, such as promoting lending products to deposit customers, and gaining more insight on asset potential and portfolio allocation, marketers can deliver the right next-best product offer. One firm used asset insights to segment current customers for a growth campaign. This enabled the firm to deliver messages based on likely product needs and achieve an over 100 percent lift in deposit, investment, and loan balances.
6. Act fast to seize in-market customers seeking credit
Let’s say an existing customer is browsing for a new car loan. If you knew about the search as it was taking place, how would your firm respond? With near real-time alerts, your firm can have the opportunity to deliver a competitive offer and protect market share. Alerts such as this one can be extremely effective to help lenders not only recognize when their customers are seeking additional credit, but also reveal behaviours or events that could lower (or increase) risk.
7. Drive product activation
To deepen relationships, marketers can take steps to encourage customers to activate and use the products that they hold. 3 steps marketers can use to promote product usage include:
- providing continuous product education
- incenting spending amongst affluent cardholders
- increasing credit limits for segments that are more likely to meet financial obligations.
Young affluent households — offering 3x higher spending power and 20x higher assets as young non-affluent consumers — are a particularly ripe audience for increased education and product activation efforts.
Learn more about how you can gain valuable new customers and build stronger relationships by checking out our eBook.
As Equifax’s Marketing Practice Leader, Todd Hoover leads a consulting team that enables clients to build best-in-class, data-driven marketing capabilities and programs.