1 / 37

Generating Deposits

Generating Deposits. New Tactics For Success. Kevin Stang, Sr. Strategic Advisor, Raddon Financial Group. Overview. Product and Price Checking is Key Money Market Innovation CD Strategy Place and Promotion Drive Delivery Pursue Potential Leverage Loyalty Tackle Timing.

gafna
Download Presentation

Generating Deposits

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Generating Deposits New Tactics For Success Kevin Stang, Sr. Strategic Advisor, Raddon Financial Group

  2. Overview • Product and Price • Checking is Key • Money Market Innovation • CD Strategy • Place and Promotion • Drive Delivery • Pursue Potential • Leverage Loyalty • Tackle Timing

  3. Product Design and Price Offer Products That Sell!

  4. Checking • What do your Members need? • Consumer Segmentation • Sample Product Menu • What is your draw? • Incentives • Features to Highlight

  5. RFG Consumer Segments:The Key Ingredient in Determining Potential 18-34 35-44 45-54 55-64 65+ Upscale 14% $100,000+ Credit Driven 14% Middle Income Depositor 15% Middle Market 22% $30-$99,999 Less than $30K Fee Driven 13% Low Income Depositor 22% Segment Fee Driven Credit Driven Middle Market Low Income Depositor Mid. Income Depositor Upscale Age Definition 18 to 44 18 to 34 35 to 54 45 or Older 55 or Older 35 or Older Income Definition Less Than $30K $30K or More $30K to $99,999 Less Than $30K $30K to $99,999 $100K or More % of HHs 13% 14% 22% 22% 15% 14% Avg. Age 31.2 28.8 45.3 67.2 67.8 52.1 Annual Inc. $15,681 $60,318 $64,088 $16,401 $60,216 $112,500

  6. FREE CHECKING HAS DECLINED IN IMPORTANCE WHILE INTEREST RATES HAVE INCREASED IN IMPORTANCE 2007 RFG National Consumer Research

  7. HIGH-RATE CHECKING ACCOUNTS ARE PREFERRED BY THE UPSCALE SEGMENT 2007 RFG National Consumer Research

  8. RFG Consumer Segments:The Key Ingredient in Determining Potential 18-34 35-44 45-54 55-64 65+ High Rate Checking $100,000+ Advantage Checking Interest Checking Relationship Checking $30-$99,999 Less than $30K Free Checking Free Checking Segment Fee Driven Credit Driven Middle Market Low Income Depositor Mid. Income Depositor Upscale Age Definition 18 to 44 18 to 34 35 to 54 45 or Older 55 or Older 35 or Older Income Definition Less Than $30K $30K or More $30K to $99,999 Less Than $30K $30K to $99,999 $100K or More % of HHs 13% 14% 22% 22% 15% 14% Avg. Age 31.2 28.8 45.3 67.2 67.8 52.1 Annual Inc. $15,681 $60,318 $64,088 $16,401 $60,216 $112,500

  9. Checking Menu • Free Checking – Typically Free with a Direct Deposit, or Totally Free if your branch expense is low. • Advantage Checking – Rewards the member based on the level of account usage. Rewards include: Free Foreign ATMs, Free Bill Pay, Debit Rewards, etc. • Relationship Checking – Rewards the member for having additional accounts. Rewards include Advantage Checking Rewards plus Loan Rate Reductions & Deposit Rate bonuses. • Interest Checking - Offers a fair rate of interest for a low minimum balance (typically starts as low as $1K +) • High Interest Checking – Offers a high rate of interest for a high minimum balance (typically $10K +) Key Issue: Do we need a special offer to attract checkers ?

  10. PROMOTIONAL ITEMS PLAY A BIG ROLE IN DECISION MAKING PROCESS FOR THREE OUT OF 10 CONSUMERS 2007 RFG National Consumer Research

  11. CASH MOST IMPORTANT PROMOTIONAL ITEM IN DECISION MAKING PROCESS 2007 RFG National Consumer Research

  12. Checking Draw • Offer a Cash incentive • Overcome the top barriers to opening a new checking which are: • Locational Convenience • Ease of Switching • Easy ATM Access

  13. Money Market • What do your Members want? • Some are Rate Sensitive • High Balance Households • Upscale and some Mid-Depositors • Others are not • Geographically Convenient Households • Very Satisfied Members • What is your draw? • Teaser Rates are best in today’s declining rate environment

  14. DEMAND IS GREAT FOR HIGH-RATE DEPOSIT ACCOUNTS 2007 RFG National Consumer Research

  15. Silver MMA • $25,000 • 3.85% • $5 / month (minimum violation) • Gold MMA • $50,000 • 4.55% • $7 / month (min violation) • Platinum MMA • $100,000 • 5.05% • $10 / month (min violation) MMA DESIGN STRATEGY • MoneyManager MMA • 4 Tiers • $10,000 2.50% • $25,000 3.35% • $50,000 4.05% • $100,000 4.45% • Advantages: • Institution rewarded for managing “lazy money” • Built in promotional growth strategy

  16. When you need new deposits, make one of these accounts your promotional account. • Bump the rate by 50BPs • Promote to all members with a MMA account of any kind who have balances below the threshold for this account • Use mass media sparingly • Require a checking account to get the promotional rate MMA DESIGN STRATEGY HOW TO USE THIS STRUCTURE TO GROW NEW DEPOSITS:

  17. Certificates • Understand this Product’s Purpose • Fund Loan Growth • Fulfill a member need • Adhere to this Purpose • Stay Short term • Offer Periodic Specials

  18. MINIMUM INTEREST RATES REQUIRED TO MOVE ACCOUNTS 2007 RFG National Consumer Research

  19. Product Delivery and Promotion Effectively Communicate your Products and Services

  20. DELIVERYwhich consumer is available to accept your services? A B

  21. BRANCH CONVENIENCE REALLY MATTERS. AS OVERALL BRANCH CONVENIENCE DECLINES, DEPOSIT BALANCES DECLINE. *2007 Credit Union CEO Strategies Data

  22. Delivery Summary • Branches are the #1 Key to Success for Deposit Growth. • Use your Branches as a Deposit Billboard • Target Local Members for Deposits • If you have a strong brand, Target Non-Member Upscale and Mid-Depositors • Offer Balance based incentives for your Staff • Measure Deposit growth at the Branch level and account for variances on convenience and demographics

  23. POTENTIALWhich consumer is capable of accepting your services? A B

  24. CONSUMER SEGMENT OVERVIEW 18-34 35-44 45-54 55-64 65+ Upscale 14% $100,000+ Credit Driven 14% Middle Income Depositor 15% Middle Market 22% $30-$99,999 Less than $30K Fee Driven 13% Low Income Depositor 22% Segment Fee Driven Credit Driven Middle Market Low Income Depositor Mid. Income Depositor Upscale Age Definition 18 to 44 18 to 34 35 to 54 45 or Older 55 or Older 35 or Older Income Definition Less Than $30K $30K or More $30K to $99,999 Less Than $30K $30K to $99,999 $100K or More % of HHs 13% 14% 22% 22% 15% 14% Avg. Age 31.2 28.8 45.3 67.2 67.8 52.1 Annual Inc. $15,681 $60,318 $64,088 $16,401 $60,216 $112,500

  25. 322

  26. Potential Summary Segment Households that are most likely bring you deposits • Target the Mid-Income Depositors and Upscale • Target existing high balance depositors Segmentation has many benefits • The CU will appear to be “Relevant” in the members’ minds. • By increasing the amount of letters you send, members will “Remember” your message, and feel it is an important one.

  27. LOYALTYWhich consumer is willing to accept your services? A B

  28. DEPOSIT BALANCE CONTROL INCREASES AS MEMBER LOYALTY INCREASES Deposit Balance Control by RFG Loyalty Index The RFG Loyalty Index is a measurement RFG created using Member Survey data. It is a blend of Satisfaction, Purchase Intent, and Willingness to Refer the CU. Balance Control is the fraction of member business the credit union owns. Source: 2007 CEO Member Survey *2007 RFG Member Survey Data

  29. DEPOSIT BALANCE GROWTH INCREASES AS MEMBER LOYALTY INCREASES Deposit Balance Growth by RFG Loyalty Index Source: 2007 CEO Strategies *2007 RFG Member Survey Data

  30. DEPOSITS Over $5000 in Deposits Within Branch Market LOANS Current Borrower Previous Borrower RFG Research Reveals:The Key Ingredients in Determining LOYALTY • DEPOSITS or LOANS • Greater than 3 Services • Active Checking • Credit Card

  31. Loyalty Summary Make a strong effort to communicate with households that intend to bring you business. • If you don’t ask for the business, someone else will. • Identify loyal members using product and channel data.

  32. TIMINGWhich household is ready to accept your mortgage services? A B

  33. HERE IS A SAMPLE SEASONALITY REPORT YOU MIGHT USE INSTEAD OF NATIONAL DATA

  34. Timing Summary Market when households are ready to open your products • Batch process event based marketing calendar • Identify and target households of any high balance Maturing CDs, Promotional CDs, or other Hot Money • New Households over the age of 45 should be targeted for deposit services. • Go after First Time Depositors for other services • Recently Moved Households may be ready to leave • Create a season based marketing calendar

  35. Overall Summary • Product and Price • Checking is Key • Money Market Innovation • CD Strategy • Place and Promotion • Drive Delivery • Pursue Potential • Leverage Loyalty • Tackle Timing

More Related