New Customer Onboading: Increasing Long-Term Growth Potential
Like the old iceberg adage, much of the growth and wealth potential of a new customer is found under the surface of your first interactions. If financial institutions rely on information acquired only through initial interactions with the new customer to paint a picture of the customer’s long-term growth potential, they could miss out on some of the best opportunities for cross-selling, product offers and overall growth. By using specific tools to get a better picture of a customer’s current and potential long-term financial position from day one, banks can steer the conversation toward relevant products and services.
Opportunities for growth and profitability start on day one, and banks should be poised to hone in on them. Banks understand that the best opportunity for cross-sell happens while the customer is engaged during the account opening process. However, many banks struggle to understand which products are appropriate to cross-sell to a specific individual without knowledge of their assets, spending patterns and product preferences.
Too often though, a customer’s opening deposit, initial products opened, and lifestage information, delineates the type of services he or she is offered at the beginning of the bank-customer relationship. Unfortunately, relying on these pieces of information alone could result in missed opportunities at the most opportune moment for growth. Missing this crucial moment during which a new account is opened could set the tone for a less profitable relationship over time.
When new customers are being onboarded, informed treatment strategies can’t be implemented without the big picture in mind. Banks can help accelerate customer profitability by accessing the right tools during the onboarding process. Specifically, they can increase the growth potential of each new account by using tools to better understand the full financial profile of a new customer and using that information to drive their conversations and long-term growth strategy for each customer.
With that full profile in mind, it’s easier for the person opening the account to vet and suggest other products and services to the new customer, thereby enhancing the first interaction to increase wallet share and product penetration, as well as begin to engender a sense of loyalty.
Determining initial customer treatment strategies based on the limited information ordinarily available to banks, such as opening balance and type of product, often isn’t enough. When banks can better understand a customer’s estimated wealth picture, it can help them take instant actions while they are interacting with the new customer, such as referring them to speak to a member of the wealth management team, or initiating a discussion around higher benefit deposit accounts.
Instead of relying just on information acquired at the point-of service alone, processes can be built to leverage additional information, such as an estimate of a household’s total investable assets (not just their assets under management with one particular firm, but their estimated assets across all financial services firms). This additional insight allows a bank to gauge a customer’s predicted overall financial picture and use it to determine propensity to open other accounts as well as what type of promotion to offer. The result is that banks to can utilize these precious minutes with the customer to discuss the most relevant products and resources.
While much of a customer’s profile and growth potential lies under the surface of a bank’s first customer interaction, the right tools and insights can help offer up a fuller, more accurate measure of profitability. Starting with the right information helps banks serve their customers better and ensures their ability to capitalize on every opportunity for growth.
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