Pub. 4 2015 Issue 3

The CommunityBanker 14 It is useful to look at cross-sell at all levels, even the broadest. For example, how many commercial households have a credit relationship without deposit accounts? Since attrition is highest among those with fewer products, how much is it worth to keep the credit only customers? Does this call for a campaign to cross-sell other products? Some banks focus attention at level 1 or a layer down to define a “sweet spot” they want to target. What percent of retail household have deposits, credit and either investments or insurance? What percent should the bank target? A hybrid model with checking is shown since checking is critical for defining a bank as the customer’s primary financial institution. It is impossible to present a full model in this summary whitepaper. Please ask a SNL Banker adviser or sales profes- sional for more details. The sweet spot for a bank is defined as households with checking, other deposits, credit and either insurance or investment products. The intersection of households meeting these criteria is represented with the star. HOUSEHOLD ASSIGNMENTS Household Assignment is the process of assigning ac- counts, customers and households to the appropriate branch, officer or channel for sales and/or service responsibility. These assignments are often not present or correct on existing bank systems. For example, a customer may have opened a checking account at Branch A fifteen years ago but has moved and is now using Branch B for all their banking needs. The GL system will assign the checking account and hence customer to Branch A. The branch that can best impact future sales and service satisfaction is Branch B. Similarly, sales officers come and go over time so the assigned account officer may no lon- ger be relevant. It is important to know where to send a lead list for sales and who to hold accountable for excess attrition if service is poor. It is also useful to evaluate the assigned house- hold “book of business” for cross-sell opportunities. Best practice is to assign each household to a branch, ex- cept those living well outside the service area or house- holds that do not consider themselves bank customers (e.g., they only own an indirect loan). Assign even those house- holds that opened all their accounts online. If possible, use branch and ATM transaction data to determine which branch will be the primary branch, usually the branch frequented the most by key household members. If transaction data is not available, assign the branch with the most recently opened accounts. If there are no branch opened accounts, consider the household location to find the nearest branch. For officer assignments, match assigned officer keys on bank systems to current employees and their job titles. If the employee is no longer working as the relevant officer, assign the household to the relevant managers and let them reassign on the system. Identify job titles that are generalists and as- sign as many households as practical to those generalists (not more than they can handle). Identify officer types who do not service customers and assign their customers to the appropri- ate service area (e.g., assign all mortgage customers to the mortgage phone unit for service). Much more information is available on this topic, but the key is to hold the appropriate people accountable for sales and service and be able to review and compare correctly assigned books of business to find cross-sell and coaching opportunities. SUMMARY With Householding, Product Grouping and Household Assignments in place, banks can efficiently find and pursue cross-sell, up-sell, activation and retention strategies. House- holding allows accurate and easy views of the full customer relationship; however, the household needs to be assigned to selling and service officers and channels in order to execute those strategies. Plus, it is easier to find the opportunities when products and services are grouped together or bankers will miss the forest for the trees. Many types of reports are available or can be created to show cross-sell, up-sell, activation or retention opportunities. For example, Officers 1 and 4 have a 5% penetration of credit cards into their books of business, but the average is 15% for similar books of business. As another example, 40% of com- mercial households only have one product or service, so the single product loan customers are targeted with a special offer. Once the opportunities are identified, lists can be produced and sent to the appropriate channel or person. The underlying infrastructure required for these reports and more is House- holding, Product Grouping and Household Assignments. To learn how SNL Banker can help you use data to improve your sales and marketing ROI, contact: 866.296.3743; SNL- Banker@SNL.com; www.SNLBanker.com . Other Deposits Checking Credit Insurance or Investments Continued from page 11...