September 24, 2007: Lincolnshire, Illinois. This study, sponsored by The Biltmore Group, considers the response rate (percentage of households adding additional products) of customer households new to the institution.

The on-boarding technique studied involved mailing one personalized letter to the targeted household per month for three months. The letter featured a product recommendation, but otherwise included no special offers, incentives or inserts. At all institutions studied, the on-boarding program was just one facet of an on-going, comprehensive Matrix Mail cross-sell program.

Data was collected at a variety of institutions throughout the Midwest and East between 2003 and 2007. Institutions are identified only by approximate asset size. Most respondents received three letters in a three month period, although some may have received as few as a single letter, and as many as four letters in four months. Measurement is for 90 days following receipt of the last letter.

Reported response rates are point-in-time and as such may be influenced by seasonal product demand. Taken as a whole, however, the response rates provided here suggest that on-boarding programs should provide a lift over control groups of 100% to 200%, with typical response rates near 10%.

Response rates varied, and may reflect existing capabilities of front-line staff to effectively cross-sell at the time of account opening. Also, results generally seem to be strongest in the first year of the program before diminishing slightly. It is unlikely that the slight decline in response rate over time is explained by changes in the characteristic of new customers. More likely, as the on-boarding process becomes more familiar at an institution, employee selling capabilities improve.

Response Rates Compared to Control Groups

                                        On-boarding        Control                                 Time
   Institution                           Matrix             Group              Lift               Interval

   $10 Bil Midwest                  14.0%             0.43%           3185%            at 2.5 years

                                            6.02%             4.65%               30%           at 2 years

 

   $8 Bil Midwest                      2.5%           >0.05%           4900%            at 3 years

                                              2.3%           >0.05%           4500%            at 2 years

                                              7.7%               0.8%             862%            at 1 year

 

   $4 Bil Midwest                    19.0%               5.5%             245%            at 2 years

                                             17.4%              7.2%             142%            at 1 year

Response Rates from institutions that did not use Control Group comparisons:

                                                         On-boarding        Time
   Institution                                              Matrix          Interval

$8 Billion Midwest Holding Co.               5.2%          at 18 months

                                                           5.6%          at 6 months

$3 Billion Eastern Holding Co.              10.1%          at 2 years

                                                         10.1%          at 1 year  

$1 Billion Midwest Bank                      13.1%          at 2 years

$900 mm Midwest Bank                      11.5%          at 1 year

$800 mm Eastern Bank                       6.2%           at 1 year

                                                         7.3%           at 6 months

$730 mm Eastern Bank                       8.1%           at 18 months

                                                         7.1%           at 6 months

$600 mm Midwest Bank                    11.4%           at 1 year

$400 mm Midwest Credit Union          12.6%           at 18 month

                                                         8.0%           at 6 months

$300 mm Eastern Bank                     10.4%           at 2 years

                                                       11.0%           at 1 year

$400 mm Midwest Credit Union          15.1%          at 4 years

                                                         7.7%          at 3 years

                                                       11.2%          at 2 years
                                                          37%           at 6 months

      $200 mm Midwest Credit Union           9.0%          at 1 year
                                                              9.9%          at 6 months

For more information about techniques for overcoming attrition, improving cross-sell ratios, as well low-cost, automated on-boarding systems, contact Mark Rodrigues, president, The Biltmore Group.  mark@gobiltmore.com.