Many people often stick to one or two financial institutions throughout their working life, so it’s not surprising that acquiring new customers is extremely difficult.
Sometimes customers might look at switching to a new bank, but only if there’s a big need for it. If a new customer does decide to join, the onboarding process can end up being quite costly for a bank. For example, it can cost up to $1,500 in the US and $80 in the Philippines to process a new banking customer.
While it’s important to continue attracting new customers, banks should also strongly focus on how they can increase the number of products each existing customer has.
Once you have a deep understanding of your customer’s needs you can then begin to offer them targeted products and services to increase your revenue. The aim is to offer an experience and products that leave your customers satisfied, loyal, and recommending your bank to others.
I will take you through a number of strategies my team of consultants at Backbase considers when driving an improved share of wallet.
Analyze what products existing customers are using
The first step to enhancing your share of wallet is to understand what products your existing customers are using. From a strategy consulting perspective, we will carry out a product penetration analysis. For instance, the team will look at what other products a credit card customer is also using and why that might be.
This is an example of a template that the strategy team often uses, to create a clear picture of where the gaps are in product uptake. For example, the product penetration might find that many of your customers are only using your financial institution for their credit card and savings account but don’t usually apply for a loan. We can then explore the reasons they aren’t and try and find ways to improve the chances that they do.