With deposit rates climbing and most banks and credit unions desperate for more deposits, it’s vital to retain and grow your existing depositors and CD customers in addition to finding new depositors. Deposit retention strategies do not come without risk of repricing existing deposits – this is why a thorough deposit migration analysis should be implemented and understood before undertaking in a retention program. Furthermore, you should understand who your best depositors are in order to effectively target potential deposits.
With deposit rates climbing and most banks and credit unions desperate for more deposits, it’s vital to retain and grow your existing depositors and CD customers in addition to finding new depositors. Deposit retention strategies do not come without risk of repricing existing deposits – this is why a thorough deposit migration analysis should be implemented and understood before undertaking in a retention program. Furthermore, you should understand who your best depositors are in order to effectively target potential deposits.
Ask yourself:
- What is the breakdown of your deposit portfolio?
- How do your new customers, existing customers with deposits, and existing customers without deposits differ?
- What types of products and promotions are they most interested in?
- Who is likely to have additional cash that they could deposit with you, but don’t?
A deposit analysis will help you answer these questions and allow you to understand how deposits flow through your institution, how to attract new deposits, and how to retain your existing depositors.
Divide and Conquer
After you gain a firm understanding of your deposit situation, it’s time to develop target segments!
Acquire:
Your existing data is a gold mine and can help you identify who and where your potential new customers are. With a model of who your high value customers are, you can use geographic concentration analysis to develop target areas in which to focus your marketing. Evaluate where your best customers live and the typical demographic breakdown of their areas. Knowing this, you can identify areas with similar populations to target for your marketing. Using a mixture targeted direct mail, traditional digital search and display advertising along with targeted IP address targeted display ads will yield the best results.
Retain:
Utilize your learnings from deposit analyses to develop your segments. Using a segmented email program to encourage reinvesting cash from CDs that are maturing. If desired, develop a pre-maturity program to allow customers to get out of existing CDs early without penalty to rebook new CDs with longer terms. Consider programs that target current depositors with lower rates by moving funds to CDs or interest-bearing checking and savings accounts – but be sure to assess your repricing risk against the benefit of retention!
Grow Low Depositors:
For existing depositors that have low deposits, identify those that live in areas with a large concentration of your high value customers, especially in asset-heavy areas.
Grow High Depositors:
This group is likely to be savvy with the benefits of CDs and other interest-bearing accounts. Inform them of rate increases and utilize multi-channel strategies such as direct mail, IP address targeted digital ads, and targeted email to nurture your leads and guide them through the journey.
Grow Non-Depositors:
Your loan-only customers may not have deposits with you, but they likely have them elsewhere. If you can offer competitive rates, target them with offers of CDs and interest-bearing checking and savings accounts.
By understanding who your depositors are – especially your best depositors – you can segment your targets and develop strategies to cater to their unique needs and communication preferences. Being informed allows you to be targeted and efficient with your marketing.
Do you need help understanding who your best depositors are and how to reach them? Syntropy Group can help you identify your high-value customers as well as develop and execute effective marketing campaigns to drive deposit growth. Contact us today at growth@syntropygroup.com to learn more about how Syntropy Group can help your institution drive strong, repeatable growth.