Tampa, FL/April 4, 2009: Nearly two-thirds of all bank customers could be swayed to leave their institution for another bank. Only 35% of bank customers feel loyalty or otherwise engaged with their bank, according to Jim Marous, Marketing Services Director for Harland Clarke. Marous estimates that just 9% of all customers hold negative feelings towards their institution. The remainder, 56% of all customers could be retained using customer engagement strategies.

Marous addressed bankers during a Webcast, Strategies and Economics of Improved Customer Engagement, hosted by OnsiteConference, Inc. a privately held research marketing firm located in Tampa, Florida. Harland Clarke Marketing Services is a full service, leading edge provider of direct marketing solutions, focused on the financial industry.

Customer engagement encompasses improving account ownership, transactions, visits to the bank, and satisfaction. The goals of engagement include:

• Create awareness

• Build brand and product preference

• Drive transactions

• Increase loyalty

Marous cited research indicating that the number one driver for customer loyalty is that the perception that, "I am valued as a customer."  According to Marous, this driver even outranks convenience, and shows that brick and mortar is wasted without effective customer engagement.

The benefits of successful customer engagement are obvious:

• Improved customer acquisition

• Enhanced new account opening experience

• Improved sales through tailored recommendations

• Increased transactions for fee, interchange and interest income

• Expanded channel utilization

• Increased retention by delivering more personalized and interactive services

"Customers are no longer tethered to a physical bank or office. Location is no longer an advantage," stated Marous. Convenience once meant that a branch was nearby.   Technology has changed everything.  Among bank customers:

• 97% own a computer

• 94% own a cell phone

• 76% use instant messaging

• 15% of IM users are logged on 24/7

• 34% use the Web sites as their news source

• 44% read blogs . . . 28% have their own

• 49% download music using peer-to-peer file sharing

• 75% of college students have a Facebook account

• 60% own some type of portable music and/or video device such as an iPod

Technology has allowed the customer to decouple from the branch.  One element of customer engagement hasn't changed: 
The first 90 days are critical to the customer relationship.  During this period, proactive product cross-selling is essential. Services, as well deposit and loan accounts, can be used to increase customer retention and engagement. 

"Sticky" products that are highly correlated with customer engagement include:

• Check purchase (Free checks are great, but people use things they paid for)

• Direct Deposit

• Autopay/Online Bill Pay

• Systematic Savings

• Checking reserve

• Sweep Accounts

• Packaged or upgraded product options

• Personalized Debit Cards

A customer with any of these services is likely to use the account and is not likely to leave and become a profitable customer.
Marous stated that proactive, early emphasis on getting new customers engaged is the key to success. There are many different and unique ways to get a customer engaged, but systematic cross-selling and employee training may be the essential elements to a successful customer engagement strategy.

Jim Marous may be reached at James.Marous@harlandclarke.com.