Tuesday, December 15, 2009

If...

IF  you could save 25% of your marketing costs....
IF you could save 25% of irrelevant marketing communications...
IF you could save 25% of your sales commission costs...
IF you could align people to do the right thing for your customers and your business...

What would it be worth to your company ?

The reality is that most consumer banking / financial services companies have a waste factor of at least 25% of resources which is targeted at capturing money that is already in the bank or retaining money that isn't at risk of leaving. That is the startling finding of the fact-based bank customer behaviour research we did over the last several years using our own proprietary methods.

The key to unlocking these savings is pretty obvious: simply stop chasing money that is churning among products and branches in the bank and focus on real dollars won and lost.  The tricky bit is being able to distinguish and measure money flows in the same dimensions that are used to manage the bank - product, location, business unit, legal entity - because money flows are inherently a customer driven behaviour.

Fortunately there are solutions at hand. The simplest is to simply manage sales and lost business at the aggregate customer level - if their balances go up, you have sales, if they go down you have lost business. This works, but is pretty crude. We have developed a better way that quantifies the flow of funds at the account level, which enables reporting and analysis in the same dimensions as are used for management. This bridges the gap between customer and business, enabling management to synchronize resource allocation to customer behaviour objectives.

All this should be old hat, but sadly it's not. Most banks are still struggling under the old paradigms of driving branch and product balance, revenue and profit targets instead of adding the customer dimension.  How to move the mountain of management intertia ?

David McNab
Share/Save/Bookmark

0 comments:

Post a Comment

Comments are moderated. This is a DoFollow blog.

Note: Only a member of this blog may post a comment.