Virtually every financial institution loses some customers, but few ever measure or recognize how many of their customers become inactive. High turnover rates often occur when a bank or credit union invests an enormous amount of time, effort and expenses building the initial customer relationship, only to let that relationship go unattended. As a result, the customer becomes disengaged and more likely to walk away, leaving the bank in a position to spend another small fortune to replace them. In fact, according to the White House Office of Consumer Affairs, it is 6-7 times more expensive to acquire a new customer than it is to keep a current one.
Based on these facts, the easiest way to grow is to focus on retaining current customers while increasing incremental product spend. Once you decrease turnover rates, it’s often possible to significantly increase your growth rate because you’re no longer forced to make up lost ground just to stand still.
Increasing customer retention often starts with consistent communication, branding and personalization.
1. Provide Proactive Support
Usually, customers who have problems with products and services will not communicate the issue. According to Lee Resources International, for every customer who complains about an issue, there are 26 who stay silent. Instead, they take their business elsewhere.
A best practice for “breaking the silence” and providing proactive support is to utilize the space on digital and print documents to request feedback and encourage open dialogue.
2. Value Proposition Reinforcement
Value propositions are a clear statement that should:
3. Add a Personal Touch
As technology continues to evolve, customers are expecting more personalized communications that align with behaviors, needs and wants. According to “The Cost of Poor Customer Service” by Genesys Global Survey, 38% of consumers say personalization is important to the customer experience.
Marketing space on digital and print statements, letters, notices, etc. can be optimized to target customers with products and services that best fit specific needs. A best practice is to utilize existing customer data to identify specific criteria, including account balance, zip code, and spending habits, to name a few. From there, leveraging dynamic communications on all digital and print documents creates a timely, effective customer experience.
While it’s next to impossible to have a 100% retention rate, financial institutions can drastically decrease turnover by proactively approaching and maintaining current customer relationships.
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