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Year after year, we receive numerous questions about best practices when it comes to growing retail deposit market share. Specifically, about establishing the Primary Financial Institution (PFI) status via checking account relationships.

An interesting fact: The questions haven’t changed much over the years…they almost always revolve around the five topics addressed in this article. Although the questions may not have changed, the answers certainly do.

The following insights have been developed over years of testing different marketing variables and (quite frankly) a lot of trial and error. We strongly believe analysis is a key element in optimizing marketing strategies. Our acquisition strategies today are a combination of intensive testing, real client results and future anticipation. Ok, let’s get to the Q&A…

Q. What is the biggest opportunity in terms of marketing today?

A. Over the last couple of years, market disruption has been an under-utilized strategy for many community banking institutions to grow deposit market share and overall share of wallet. As I write this, the single best (and largest) opportunity today resides in the 13 states affected by the merger between BB&T and SunTrust Bank. I commonly refer to this merger as a once in a decade situation for institutions that overlap with either of these banks.

While this may be the biggest pending merger right now, we see consolidations nationwide every day. It is imperative your institution is in position to take advantage of mergers and/or branch closings – from the initial rumblings in the news until the merger has been complete. This truly is an enormous opportunity for remaining local banks and credit unions to grow market share.

Q. Who are my true competitors?

A. This question might be 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 in terms of checking accounts.

In most cases, this will be your larger regional and national banks. Look at the millions of deposits lost since 2009; that trend may have slowed but it’s not over. Mergers and security missteps will continue to be in the news and will feed this trend. Institutions that have maintained competitive checking options and have been aggressive in their marketing efforts have done very well over the last few years based on that fact alone.

Focus on the low hanging fruit when you can. In many cases, concentrating efforts on another local financial institution with competitive checking is a mistake – even when regional or national banks control less market share. It’s unfortunate more community-based institutions do not take advantage of this unique opportunity.

Q. How do I decide where to market?

A. This is a great question because it’s a major key to success. It is also one of the most difficult to define without good analytics. The short answer is: utilize recent trends weighted heavily on checking account openings. Optimize delivery methods (whether that includes postage rates or online spend).

Keep in mind, we are talking about retail deposit growth and establishing PFI status. There are many additional variables to consider in conjunction with recent trends like penetration and attrition, but exactly how to use these variables is what we like to refer to as our “secret sauce”. However, we can tell you that taking a “mass-market” approach without strategic targeting is a losing proposition. Another important consideration — convenience is defined by consumer actions or patterns, not necessarily connected to distance from a branch. In other words, radius mailings are not your best bet.

Q. What marketing tools should I use?

A. We strongly suggest a combination of direct mail, digital and/or social marketing tools that allow for precise targeting. The analytical capabilities of direct mail, along with the abilities to increase frequency-of-message with digital and social marketing, can create a powerful combination proven to generate strong account openings.

The one area that is often overlooked (or misunderstood) is search ads. This is especially true when presented with market disruption. People are online searching and/or researching new banking relationships on a regular basis. You simply need to be there and have the know-how! Search ads can be tricky, but well worth it. Also, if low brand awareness is the issue, consider display or Facebook ads to build your brand in these markets.

Q. How do I grow when my market is so competitive?

A. There is one comment that we constantly hear: “My market is too competitive to grow market share!” The fact is all markets are very competitive (with some exceptions – if you are lucky to have the only branch within miles). Most financial institutions, if not all, have a tough job growing their core deposit base. That’s exactly why a very targeted and strategic approach is required… one that also evaluates attrition rates as a factor

In summary, growth is achievable in most cases. However, the fact is many institutions are not taking advantage of every opportunity – or know where to start. I would encourage you to consider what (and where) opportunities exist in your market. Then, have a smart plan to optimize your deposit growth and market share strategy.

Craig Simmers is Founder of Stellar Strategic Group. Craig can be contacted via email at or call 410-990-0172.


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