In the 25 years that I have been working in the banking industry, I have never witnessed more trepidation among bankers in considering retail organic growth. Because of government regulations, calculating the value of a retail checking household is more difficult than ever. The one constant, however, is the banking relationship still focuses on the retail DDA and ultimately on the bank recognizing its importance.
To support checking growth, I developed the Account Generator System (AGS) with the banking industry in mind. AGS is a performance model focusing on market mobility and branch historical activity. It shows you how, where and when to reach your future customers. It analyzes your markets by branch, and measures market mobility, retail banking competitiveness and convenience. Then it projects account openings by branch and acquisition cost per account.
The measurement of success is based on net lift over control and return on marketing dollars invested. Also, the model has the ability to improve profitability: average balances, fee revenues and cross-sell ratio of households solicited versus those who walk-in on their own.
The process and system is constantly adapting to the new regulatory environment to maximize market potential and minimize average acquisition cost. Based on data from the last three years, the AGS Model has worked well in small community banks all the way up to the largest regional banks in the country. As with every successful marketing program, the key is a close working partnership with all the business partners.
Using this model has helped my customers capture their market share by 30%-40% over the past 3 to five years. It is a successful proven strategy in helping with the banking and retail industry. I am interested in hearing how you’ve adjusted your marketing strategies with the recent government regulations.