Leverage a Comprehensive View of Your Customer for Improved Profitability

Posted by Keith Twisdale


If you’re like most financial institutions, visibility into your customer’s profitability is limited. Core data alone just doesn’t show you the full picture. As a result, you likely don’t have the right information to assign costs to their accounts and come up with a specific net profit for that relationship to get a full view of your customer. In this post, we’re offering some ideas for tapping into the data to see your customer.

See the True Value of the Relationship

Years ago, customer profitability was based on industry standards but now, with the latest technology, you have access to the data to make this bank-specific and tailor those benchmarks to your institution. By bringing in information on costs, fees, and rates from your core system — along with the ability to create soft costs parameters such as overhead, data processing, and loan loss provision — you are able to gain unprecedented insight into your customer’s profitability.

The true value here isn’t just in being able to understand what each account is generating but in looking holistically at the entire relationship. In doing so, you can quickly know the value of your accounts, customer ranking, trends, and month-to-date profitability.

Segmentation = Optimization

This insight does more than shed light on the data. It drives the processes and programs that empower you to maximize your bottom line. With increased access to profitability information, you can create programs for retaining top customers and establish processes for growing the others. The ability to segment customers according to profit equips you to better manage relationships, optimize operations, and increase profits.

Set Service Standards

You can establish service standards for customer segments using CRM software, such as identifying your top 10% of customers and delivering white glove treatment and special benefits to them so they feel important every time they interact with your institution. For less profitable customers, you can create a marketing campaign aimed specifically at new services that they could benefit from. Those interactions can then be recorded and tracked, reports run, and progress assessed.

This information is essential to the success of the organization. A management dashboard is a time-saving way to provide leaders with a high-level overview of activity that will help inform and empower their staff. Ultimately, it is the responsibility of executive leadership to equip their staff — and themselves — with profitability information that allows them to be more responsive and effective in their customer interactions.

Learn more about Customer Profitability here.



Topics: Profitability, CRM, Customer Segmentation