Opportunity knocks

It is one of the goals of financial services companies to grow share of wallet, along with share of market, through cross- and up-selling, and through reduction of customer churn. Simply stated, don't lose customers, but grow the amount they provide the company with loyalty and value.

It is more potent and less intrusive than the current practice of telemarketing, which no one enjoys.

Konni Hoferichter is MD of LaserCom

Retaining the right customer through their potential lifetime is what it is all about, but part of the problem is that it is hard to reach them with the right message.

But every financial services company has to send a statement every month. This communication can be an invoice, a reminder, or an indication of the state of affairs of an account. This is as per regulatory requirements, and while some people now receive e-statements, the majority still obtain their statements via post.

That is the way it is, and it is not going to change anytime soon.

Transpromo (transactional/promotional) offers a way to maximise the potential of these statements, and any company not examining its potential is short-changing itself.

And it is more potent and less intrusive than the current practice of telemarketing, which no one enjoys.

Consider the following examples:'

* Company A knows that Client X is reaching that time in life when a car loan is about to be settled. A year before the car loan is settled, it sends out its statements with an inducement for the client to consider a new car. This is particularly important for companies such as Mercedes-Benz, Wesbank and BMW, which have internal financing functions. Of great importance here is the globally acknowledged fact that customers always upgrade in terms of overall value. So, a car with a monthly settlement value of R4 500 in 2009 becomes one with monthly repayments of R6 000 in 2011. But knowing when a customer is about to upgrade, and inducing them to stay with the company, is the key.

* Offers of integrated insurance at a lower cost than is the norm. Buy a car, get the insurance at the same time, advertised at an attractive rate. And include an offer of a petrol card at a discounted rate.

* Offer the right credit card to the right customer at the right rate. There can be nothing worse for a customer than to be offered a silver credit card when they are already a platinum card customer. Give them festive season enhancements based on their identified buying patterns, having seen what they buy, from whom. All of the information is there.

* Ensure a customer renews a home loan when the current one reaches term. A home loan is the greatest and most costly investment a customer will ever make. It also delivers significant profit to any bank. Aiming for continuity of bonds is critical, and transpromo can assist in this regard with well-designed statements.

* Drive up-selling. A customer who has two products might want a third, and if targeted correctly, might accept it. But messaging, attractiveness of design and delivery are crucial.

The method is relatively simple. Identify an existing customer, use the existing statement, design an enticement to engage with the customer, especially with colour, and then apply data mining techniques to ensure to find the proclivity of customers to respond to an offer.

Then, engage with a data mining partner, locally or offshore, and a transpromo partner, and drive controlled sample groups to review and manage responses.

It cannot be overstated that transpromo is not costly. It maximises a sunk cost - statements - to communicate in a meaningful manner with existing customers.

It is a relatively well-accepted statement that it costs five times more to acquire a new customer than it is to retain one. Given the sheer scale and depth of products financial services companies offer, it is well worth the effort to examine this dynamic new marketing channel.