“The times, they are a changin’…” and that’s increasingly true when it comes to Checking Acquisition programs. Gone are the days of spray and pray saturation programs (drawing a radius around each branch and mailing to everyone in that area) without attention paid to who lives in those areas and what type of customer the institution typically appeals to. Furthermore, marketing the same checking account to everyone within a branch footprint has also run its course.
With the vast amount of data available these days, coupled with the need to be highly personalized and selective in who marketing messages are sent to, it’s vital that all available tools are leveraged to have the most successful Checking Acquisition campaign.
Some of the new program structures currently being used are:
Household-level targeting – This is the most selective approach and allows for the highest level of targeting and personalization. Using a profile model (also referred to as a cloning model), a current customer base can be modeled by appending a wealth of demographic, psychographic and geographic information. After analyzing this information, a profile is developed. This profile is then applied to the prospects within the branch footprint and the individual households that most closely resemble the customers are selected for the program.
This option typically yields the best response rates because of how selective it can be. It also allows for specific households meeting age or income criteria to be marketed different checking products.
The downfall is that this option tends to be more expensive because of using a name list and because postage rates are a bit higher since full saturation rates are not typically achieved.
Zip+2-level targeting – Similar to the option above, this option also allows for the modeling of a customer base and a profile to be leveraged. The primary difference with this option is that it doesn’t drill down to individual households. Instead, the profile is applied to all of the zip+2s within a branch footprint and each zip+2 is ranked based upon the concentration of prospects fitting the profile that reside in that area. The zip+2s with the highest concentration of potential customers are then selected for mailing.
This option typically has the second-best response rates, but because there will always be some number of prospects in a zip+2 that don’t meet the profile, each zip+2 has some amount of wasted message. It also doesn’t allow for quite as much flexibility in marketing different checking products.
However, the postage costs can decrease significantly when compared to household-level targeting because it allows for the mail to be sorted to a further degree for the post office.
Carrier Route-level targeting – This level of targeting has similarities with the zip+2-level targeting. This option also allows for the modeling of a customer base and a profile to be leveraged.
It also doesn’t drill down to individual households. The profile is applied to all of the carrier routes within a branch footprint and each carrier route is ranked based upon the concentration of prospects fitting the profile that reside in that area. The carrier routes with the highest concentration of potential customers are then selected for mailing.
This option typically has the third best response rates. Another common link to the zip+2 targeting is that there will always be some number of prospects in a carrier route that don’t meet the profile, therefore each carrier route has some amount of wasted message. It also doesn’t allow for quite as much flexibility in marketing different checking products.
The largest difference when comparing to zip+2 targeting is that carrier routes can be quite expansive in lower populated areas and this can lead to mailings that may extend further than desired.
Postage costs are typically the least expensive when using carrier route targeting because the mail is sorted to the further degree and this work is rewarded by the post office.
Each way of creating a Checking Acquisition program has its benefits and shortcomings, but knowing this going in allows for the best level setting possible. If mailing more with reduced response rates is acceptable, it may yield more accounts at a higher acquisition cost. However, if mailing in the most targeted manner so that response rates can be at their optimal is the desire, a different tactic should be used.