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Market Opportunity

A close look at a customer geographic peer group reveals that Mooreshouse Bank may have an opportunity to develop a retail banking business.

CASE HISTORY:
The chart below shows the Strategic Plan for dollar potential for residential lending in the Mooreshouse market. Look at Mooreshouse 1- 4 loans and home equity lines versus the Mid-State Peer group. The data shows the market is supporting the competition well with residential mortgages and HELOCs. Can Mooreshouse take advantage of this? Would it be prudent for the bank to limit its exposure to the commercial market and spread some risk by building a retail business? Is there a reason Mooreshouse has an unbalanced loan portfolio, one skewing heavily toward commercial products? A good strategy arises from good research.

With effective marketing and a good staff, the bank can confidently expect successful acquisition of residential loans.

 

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Shared Customer Research

Can you increase your wallet-share of customers you share with your competitor? How would you start?

CASE HISTORY:
Hershell Bank and Trust has determined that it shares customers with four major competitors. The biggest competitor is SECU, the State Employees' Credit Union. Online Bill Pay customers appear more likely to choose Herschell as their primary bank. To a lesser extent, HELOC customers feel similarly. This may suggest a strategy of concentrating on acquisition of increased Online Bill Pay and HELOC market share since those customers appear to be far more loyal.

Loyalty marketing is a long-term strategy, not a one-shot tactic.

 

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Customer Satisfaction

Banks with many offices present a real challenge to management. What is the best way to determine how well the branches are dealing with customers? Mystery shoppers are outdated, and the results are statistically invalid. The only satisfactory way to determine branch effectiveness is a continuous customer satisfaction survey, thus guaranteeing that you have your finger on the pulse of EVERY office.

CASE HISTORY: What's up at the Corporate Center office?

What's happening in Corporate Center isn't good -- they're 52 points off the bank's minimum acceptable score. Fortunately, the bank's management gets a heads-up in time to stop an erosion of customers. (Sidebar: when you take a second look at the chart, you can see that the entire bank has CSI troubles, but Corporate Center needs the most help.)

Customer research helps you to divine the mind of the market.

 

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Market Share

The Wilmont branch manager wants you to approve some significant marketing money to capture new business. How do you decide whether to approve it?

Part of the answer is to look at Wilmont's market share.

The data makes clear that the Wilmont office is significantly underperforming the rest of the bank. So you know there's room for growth. The question is: How good is the program your branch manager has in mind? And does it include replacing the branch manager?
You won't know if you are successful if you don't keep score.

 

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Market Potential

Trident Bank wants to increase its volume of DDA accounts dramatically. Management is considering a major effort, funded by major dollars, aimed at increasing the bank's share of those accounts.

What does the data show Trident Bank?

Over the past three years, the market growth has not been in DDAs, but in Money Market Accounts and CDs. Trident should be careful if there are significant competitors who offer free checking with other free features like online banking and check cards. The cost to acquire new checking dollars may turn out to be too great for the potential return. Looking at the data, one is prompted to ask, "What about an MMA or CD campaign?" or "What about forgetting this three-county market for a few years?"

Is the cost to acquire new checking dollars too great for the potential return?