How banks can leverage existing customers to create new business
When it comes to marketing, sometimes the focus becomes all about finding that next customer. While it is always important to keep growing, this emphasis can frequently backfire, especially for members of the financial services industry.
Consider this example: Your bank dedicates a significant portion of its marketing budget to generating new clients. In fact, you are able to offset every single client loss with a new client coming in. Are you making money? The answer is no, because you are spending more to attract clients than you would to retain them.
On the contrary, focusing your efforts on client retention will prove to be more lucrative. Not only will it cost less, increasing your margins, but it will open up additional marketing doors to leverage these existing customers to help generate new ones.
Here's how you can get started:
Focus on the metrics
Your first step is to learn about your existing customer base. Ask these key questions:
- How do they view your bank brand?
- What do they want out of your bank?
- What are their favorite products and services? Their least favorite?
- How do they interact with your bank?
Acquiring the right analytics will help you determine the most favorable components of your bank, including the elements that attract the most customers and do the most for retention. For example, a millennial demographic is keen on mobile and online banking, as well as smarter ATMs. Offering - or removing - any of these features can have a direct, measurable impact on your bank. Many millennials are actually switching banks because their current one doesn't provide this type of technology.
And, you may never know what really appeals to your clients without the right metrics and analytics in place.
Don't overlook your existing customers
This idea highlights another important aspect: You can't lose sight of your existing customers. Marketing can feel like it is all about bringing in new clients, but this focus may leave your current customer base feeling under-appreciated and overlooked.
As a result, you could even begin to lose customers by focusing too much on bringing in new ones. One possible scenario is where your bank has a number of promotions, deals and other benefits for new customers. You don't, however, have any of those perks for long-time clients. This lack of appreciation can drive people away. Make sure you have a healthy balance of pros for both groups.
By understanding your clientele - and valuing them - you will have set your bank up for more opportunities to use them to create new business, all for a lower cost than many other marketing efforts.
Let your customers do the talking
Your current customers are a fantastic asset. While you should do everything you can to improve retention, you can also turn to them for help with your marketing. As previously stated, prospecting for new customers can be costly, especially if you can only bring in one new client for every one lost.
However, you can reduce some of those costs by using existing customers to do some of your advertising for you. How is this possible? Here are a few tips:
1. Let them share
If you have happy, loyal customers, their experiences can go a long way toward bringing in new business. One option you have is the video testimonial. Here, your customers can share their satisfaction with your bank. They can talk about the benefits of working with you, how you excel in the industry and other positives. A testimonial can be a powerful, yet cost-effective, marketing strategy.
"Your customers can easily become valuable marketing tools."
2. Focus on the upsell
An upsell is when you convince an existing client to buy a newer product, service or upgrade. Upselling can work in banks when you convert existing accounts into more profitable ones. You can improve your odds of an upsell by staying in contact with clients and talking to them on a regular basis, often sharing the positives of different products and services you offer.
3. Host industry events
The more your bank participates in industry events, the better. These meetings are a great way to link up with current customers and help use word-of-mouth advertising to generate new business. For example, existing clients could easily bring friends or colleagues to these events, letting you meet prospects with minimal effort on your part. Best of all, industry events are a fantastic way to get your name out there and improve your marketing and networking.
All in all, one of the key problems with marketing is its outward focus. Of course, this is typically the point of marketing - you want to look outside your bank for new clients - however, sometimes the answer is right in front of you. With that in mind, don't forget about the value of your existing customer base, and make sure you are using them to your best advantage as you grow your bank.