The New Account Conundrum

By Jay Kassing, President, MARQUIS

When is a new account, a new account?

I know this is a strange question, but it is a legitimate one.  Hear me out.  Is a 90 day CD that closes, only to be opened as a six month CD really a new account?  Many Credit Unions say it is.  Or is it simply a change of accounts, especially when no new dollars are involved?  How about when that 90-day CD closes and the money is placed in a checking account?  There are no new funds here, just simply a change in how the member wishes to have the money held by your Credit Union.  Is this a new checking account?  Sure.  Yet no new member growth has happened.

Does it matter?  Maybe, maybe not.

Many Credit Unions are paying significant incentives on new accounts that are opened.  Are you?  How do you treat these changes?  For some, even having the CD rollover creates a whole new account number.  Is that then a new account?  Is a loan drawn on an open line of credit considered new?  What if it is drawn upon 2-3 times in the same year?  How do you decide?

For many sales enabled institutions, incentives are established based upon typical account opening run rates.  For example, the ABC Branch cross-sells 20 new, checking accounts per month.  Any new accounts above this 20 get a spiff of $20 each.  Make sense?  Yet if you haven’t defined what a new account is or is not, you can trick yourselves into thinking you are doing better than you are, and pay out more incentive dollars than you should.

Now I realize that this is likely not the biggest problem your Credit Union faces today.  Yet when you do analysis of product/account trends, new members vs. existing members, balances and performance against plans and incentives…data is what data does.

The fine art of establishing these “new account” guidelines, knowing what questions to ask to assure that you are seeing the real results, is important.  Managing is a great deal easier when you are armed with facts you can trust.

So…when is a new account, a new account?

Jay Kassing

Jay Kassing

Jay Kassing is President of MARQUIS, a Texas based provider of marketing analytics solutions including MCIF/CRM software, MCIF services, profitability, compliance, consulting and direct mail creative/fulfillment. Jay has ... Web: www.gomarquis.com Details