1. Relationship Pricing

    May 4, 2010 by admin

    Segmenting Your Customers As A Profitable Strategy 

    It pays to give your customers what they deserve—EdgeMark Partners can show you why. Our relationship pricing marketing strategy helps banks specifically target customers according to profitability, offering considerable potential benefit for your organization.

     

    What is relationship pricing?

    Experience shows that the top 20-percent of customers can generate a whopping 150-percent of profits, while the bottom 20-percent of customers can drain profits by at least 80-percent.1 Relationship pricing guides you in dividing your customer base into value segments, allowing targeted relationship-building strategies to be developed for the more valuable households and up-sell/repricing strategies for unprofitable ones.

     

    Segment your customers by household

    Motivating customers to act in ways that improve profitability requires getting to know your customers as households. Benefits such as fee waivers, best rate incentives, free services or trips can motivate high-value customers to maintain or enhance the banking relationship, while up-sell incentives and the opportunity to avoid fees can motivate mid-tier as well as low-value customer relationships.

     

    The benefits can be substantial

    Precision targeting and relationship pricing can help you encourage higher value household relationships, enhancing your ability to: strengthen customer loyalty, grow accounts per relationship, increase deposits, improve profitability per household and reduce resources expended on low-profitability households.

     

    Take 5 steps to improved profitability

    In summary, a relationship pricing marketing strategy can help you… 

     

    1) Identify your most and least valuable customers.

    2) Plan a multi-tiered marketing strategy.

    3) Invest in your most valuable customers.

    4) Divest yourself of profit-draining households.

    5) Build relationships; build profits.

     

    In the long run, precision targeting can generate balances far in excess of any incremental costs.2 For a more detailed look at relationship pricing or to receive a free implementation guide, please contact Scott Highfill at 804.967.2000, ext. 103 or shighfill@edgemarkpartners.com.

     

    Works cited

    1 Larry Selden, Angel Customers and Demon Customers

    2 Josh Hyatt, “Playing Favorites,” CFO Magazine

     

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  2. EdgeMark Partners To Manage Merger Communications For PNC Bank’s Acquisition of National City Bank

    December 2, 2009 by administrator

    FOR IMMEDIATE RELEASE

    (GLEN ALLEN, VA, FEBRUARY 28, 2009)—EdgeMark Partners will again partner with PNC Bank to manage primary customer notification communications for the bank’s acquisition of National City Bank.

    EdgeMark Partners will work with PNC to produce direct mail merger communications welcoming National City customers to PNC and communicating personal account details to consumer, business, corporate, treasury management and wealth management customers—including detailed, personalized account transfer confirmation summary mailings in advance of the transition.

    The agency has handled numerous merger communication mailings for PNC acquisitions, including the conversion of Sterling Financial Corporation (2008), Mercantile Bankshares Corporation and Yardville National Bancorp (2007), Riggs National Corporation (2005) and UnitedTrust (2004).

    The PNC Financial Services Group, Inc., headquartered in Pittsburgh, is one of the nation’s largest financial services companies, with a regional banking franchise operating primarily in 14 states and the District of Columbia. It is the nation’s fifth largest bank, based on deposits and branches (more than 2,550).

    EdgeMark Partners is a results-based marketing and communications agency headquartered in Richmond, VA. The company specializes in database marketing, direct marketing and communications, merger and acquisition communications and brand optimization for the financial services and insurances industries and others.

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  3. Customers Can Be An Information Gold Mine

    February 1, 2009 by admin

    Wouldn’t it be great if you could clone your best customers? That scenario is probably best left to science fiction writers, but there are some high tech tools that can help you find new customers who behave remarkably like your current top customers. Better still, they can help you hold on to and grow the customer relationships you have.

    How well do you really know your customers?
    Think about your top five customers right now. You know your customers’ names. You can probably look up their addresses. You know what they buy from you, how much they spend, and how often they purchase.

    But do you know why they buy from you and not your competitor? Do you in fact know that they DON’T buy from your competitor? Do you know how your customers feel about current events? What their favorite pastimes are? What worries them?

    Discover a rich, new vein of customer information.
    Opportunities for learning more about your customers–and finding similar prospects– through data-driven segmentation are evolving. It’s long been possible to target customers by geographic segmentation (urban, suburban, rural address) and by demographic segmentation (age, income, ethnicity, etc.). But today’s technology provides opportunities to model your current customers in greater detail, which can give you a competitive edge both in targeting like prospects and in retaining and growing current customer relationships. These modeling methods include:

    Psychographic segmentation: lifecycle, lifestyle, activities, interests, opinions, attitudes, values, political affiliations, preferred communication channels. (Will an email, direct mail piece or incorporating a PURL–(personalized URL)–get the response you want?)

    Behavioral segmentation: behavior toward products, benefits sought, usage rate, brand loyalty, readiness to buy, occasions that stimulate purchase (such as holidays or birthdays).

    Online behavioral segmentation: capture of specific, defined online behaviors that can be appended to mailing lists to further differentiate customer behavior patterns.

    Turn that gold into profits.
    Once you have a list with segmentation appropriate for your product or service, you can create tailored and relevant messaging for each segment. And with eDM and some forms of DM, you can change copy and images economically for each segment, or even each individual, for true one-on-one marketing. The result?

    1. Higher profits from existing customers
    2. Lower costs to attract new customers
    3. Higher return on marketing campaigns
    4. Improved retention and less churn

    The year is young…why not investigate smarter, more affordable marketing tools in 2009.

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