Data and Audience
In our Anatomy of a Solution series, we take a look at some direct challenges and disruptive solutions that Amsive has driven for clients. This week, clustered “mass-affluent” audience segments drive huge results for a reliable banking client.
For banks, it’s essential to acquire consumers that align with the quality and value of their target market. It’s this point of expertise that led us to propose helping to grow new checking accounts bank-wide for a long-standing, top-ranked midwest bank client. The campaign involved boosting responses from more affluent prospects who would bring higher balances and more cross-sell opportunities into the fold.
Checking accounts are the number one product customers tend to have with any financial institution. From the bank’s point of view, once the checking account is opened, then they can assume that customers will stick with that bank for a decade or more. In fact, research shows the average tenure for U.S. adults with checking accounts is just over 14 years.
In general, consumers will remain committed to their financial institution for the long haul, which means there are ample cross-sell opportunities over a long period of time. We accepted the challenge to help build that foundation for the client’s growth goals.
Increasing the checking account response and acquisition was crucial, but this campaign wasn’t just a pure numbers play. A one-size-fits-all method across potential prospects would be ineffective. So we developed and implemented a cost-effective and highly targeted micromarket methodology, surrounding specific relevant regions for the bank, to zero in on the right kind of checking account holders that would ultimately boost sought-after growth.
This meant attempting to concentrate on a particular type of prospect known as “mass affluent” customers, or a subset of the mass-market consumer base with upper-mid to high levels of income. These were the customers with relatively higher balances that tend to be more financially stable and have the greatest potential to develop long-lasting and lucrative relationships with the financial institution that are also ripe for cross-selling opportunities.
A slightly smaller challenge involved educating the different branches and stakeholders about the micromarket strategy. Different branches have different goals, but because this was such a long-standing client they could trust our expertise in that the strategy aligned with their overall corporate objectives.
Our plan involved four essential stages:
1. Creating Audience Clusters
The first step in the micromarket strategy was to whittle the customer base to its essential components. We did so by analyzing both branch and surrounding community data to cluster mass affluent audience targets living around branches at a desired distance of about five miles away, with a maximum of 15 miles away. Anchoring potential targets to localized branch locations gave a more relevant picture for sharper and more actionable takeaways.
2. Building Relevant Models
Using our internal data resources, we crunched the numbers to build so-called response and checking balance models. Taking a lookalike approach to the client’s recent new checking customers, we were able to establish an audience strategy that forecast prospects’ average deposit balance, or what a person was likely to bring to the bank. This mass affluent audience strategy let us determine who would most likely respond to potential offers, which filtered into determining how to make sure those prospects actually responded in the next stage.
3. Establishing an Effective Messaging Strategy
The audience models and potential balance numbers gave us the visibility to then strategically target and lead with different offers based upon the consumer’s needs. For example, some prospects could’ve received a high cashback amount to several high-balance accounts. Others that fell below the primary mass affluent sweet spot may have gotten an offer just for checking. If one was not as likely to bring as good a higher overall deposit balance as another, the offer changed in hopes of driving higher prospect engagement and an eventual response.
4. Reducing Mail Volumes
Reducing direct mail touchpoint volume was a small, but important money-saving goal within the larger campaign meant to establish client trust.
Despite what some clients may think, doubling the number of direct mail touchpoints doesn’t necessarily correlate to more responses. When you focus on the best prospects, like the mass affluent audience, we were able to be frugal with the number of offers sent their way to maximize efficiency. Those clusters tied to branches classified as minor (markets where the client had significant market share and brand awareness) generally produced three touchpoints a year, while clusters tied to branches classified as major (markets where growth was needed) produced five. The omnichannel rollout included direct mail and digital for the prospects who were most likely to respond, while those less likely to respond (because they aren’t as far along in the buying funnel) received a digital-only campaign.
When all was said and done, we measured a massive response rate tied to the micromarket methodology. But we also determined that acquired targets had higher balances, maintained higher retention over time, and were more apt to take part in cross-sell opportunities.
Specific takeaways included:
- A 201 percent increase in overall response rates
- A 13 percent boost in mass affluent response rates
- A 104 percent increase in the average mass affluent balance
- An increase of 33 percent through direct marketing touchpoints
- A 15 percent reduction in mail volume and material costs
By thinking small, but relevant to precisely the right consumers, we were able to optimize for the intended increased response rate to spark the checking account foundation the client wanted to drive growth going forward.