For nearly two decades, we have fielded numerous questions about best practices on how to grow retail deposit market share, specifically in regards to establishing primary banking relationships. An interesting fact…the questions haven’t changed much over these years. They almost always revolve around the three topics addressed below. While the questions may not have changed much, the answers certainly have. These insights have been developed over years of testing different marketing variables and, quite frankly, a lot of trial and error on our part. We strongly believe testing is a key element in optimizing marketing strategies. The strategies Stellar Strategic Group implements today are a combination of intensive testing and real-world, client results. Ok, let’s get to the Q&A…
Geraldine Cardwell, The Tennessee Credit Union League’s Executive Vice President & CFO and Ed Juskowski, Stellar Strategic Group’s Director of Sales pose for a photo after announcing our new strategic partnership at the 2017 TCUL Convention & Expo in Gatlinburg, TN in May 2017.
Q. How do I decide where to market?
A. Great question because this is the key to success. It is also the most difficult from an analytic perspective to define. The short answer is: utilize recent trends weighted heavily on checking account openings. Keep in mind we are talking about retail deposit growth. There are many additional variables to consider in conjunction with recent trends, but to detail more of our proprietary process would be giving away what is commonly known as “the secret sauce”. Think of it this way – convenience is defined by consumer actions or patterns, not necessarily connected to distance from a branch. Recent trending of account openings will define what the consumer defines as convenient.
Q. Who is my competition and how do I target them?
A. This question is what we consider the most misunderstood component in developing a strategy for deposit share growth. The answer is quite simple – focus on competitors that own significant deposit market share in your branch footprint and are vulnerable from a competitive standpoint. This will almost always end up being larger regional or national banks. They have lost millions of depositors since 2009; that trend may have slowed but it’s not over. Missteps, like those made by Wells Fargo, will continue to feed this trend. Institutions that have maintained a free checking account and have been aggressive in their marketing efforts have done very well over the last seven years. We call it stealing market share. In many cases, a local financial institution will concentrate their efforts on competing against another local financial institution – even when regional or national banks control more market share. It’s unfortunate more community-based institutions have not taken advantage of, possibly, this unique opportunity.
Q. What marketing tools should I use?
A. We strongly suggest a combination of direct mail and digital products that allow for the specific targeting required in the two strategies outlined above. The targeting capabilities of direct mail, along with the abilities to increase frequency-of-message with digital components, create a powerful combination proven to generate consistently strong account opening results.
In closing, there is one comment that we constantly hear: “My market is so competitive!” The fact is all markets are very competitive (with some exceptions in smaller communities that may only have one or two institutions). Most financial institutions, if not all, have a tough job growing their core deposit base. That’s exactly why a very targeted strategic approach is required. Growth is achievable and the fact is most institutions are not taking advantage of the opportunity. If you have not recently, we encourage you to consider what opportunities exist in your market today and, how your institution can utilize that information to optimize deposit growth.
Ed Juskowski is the Director of Sales at Stellar Strategic Group, LLC. To learn more about your opportunity to increase retail deposit growth, please email firstname.lastname@example.org or call 813-503-1510.