Marketing Analytics - CUNA Councils · ©2013 Fiserv, Inc. or its affiliates / 800.827.3500...

©2013 Fiserv, Inc. or its affiliates www.raddon.com / 800.827.3500

Marketing Analytics

What’s the Bottom Line?

Kevin Stang Area Vice President Raddon Financial Group


The RFG Solution

Industry Research

(since 1983)

Strategic Analysis (since 1988)

Software Solutions

(since 1997)

Solutions Center (since 2007)

Raddon helps financial institutions gain a competitive advantage and improve performance with sustainable and measurable results through: 1. Research and Analysis

2. BI/CRM/MCIF Software

3. Data Solutions

4. Consulting

Understanding the needs of the

customer

Understanding the competencies of the organization

Aligning products, systems, people, and processes

Marketing, sales, and management

tools


Decisions Based on Fact, Not Opinion

RFG’s Business

Intelligence Benchmarks from 45 MM

Accts & 13 MM Households

6,000+ Branch Profiles

Over 25 years of consumer

research trends

Loyalty Benchmarks from 300K

Annual Surveys Industry Product

and Channel Benchmarks

87 Annual Seminars with

3,300 Attendees

Product & Customer

Profitability Norms


RFG Campaign Tracking Averages

• 100’s of Financial Institutions • 1,000’s of Campaigns • 10,000’s of Direct Mail / Email offers Tracked

Direct Response

Indirect Response

Overall Response

New Households 4.1% 12.8% 16.9%

Top Loan Targets 4.2% 21.6% 25.8%

Auto Retention 2.9% 7.2% 10.1%


Efficient, Research-Based Targeting


CU Industry Loan Growth Beginning to Improve

High performers have exhibited stronger loan growth in all periods since 2004. The CEO Average growth rate is 5.6%; for high performers it is 8.5%.

Source: CEO Strategies Average Data

60


Macro Level Targeting: Potential Tracking Results Your CU’s Member Survey National Research

Gut Feeling


CONSUMER SEGMENTS - All HouseholdsSoutheast Region

Age and Income 65 +

SoutheastConsumer Segments Age Definition Income Definition % of HouseholdsFee Driven 18 to 44 Less than $50,000 19.4%Credit Driven 18 to 34 $50,000 or more 7.0%Middle Market 35 to 54 $50,000 to $124,999 18.6%Low Income Depositor 45 + Less than $50,000 24.6%Middle Income Depositor 55 + $50,000 to $124,999 13.8%Upscale 35 + $125,000 or more 6.0%Unclassified N/A N/A 13.3%Total 102.7%

35 - 44

Upscale

45 - 5418 - 34

Middle Market

55 - 64

Low Income Depositor

Middle Income Depositor

Fee Driven

Credit Driven

$125,000 or more

$50,000 - $124,999

Less than $50,000

Gen Y Gen X Baby Boomers Traditionalists

Segment by Blending Age & Income


NATIONAL PRODUCT USAGEAll Fee Credit Middle Low Income Middle Inc.

Households Driven Driven Market Depositor Depositor UpscaleChecking 98% 96 102 101 99 102 102Savings 71% 80 116 116 89 110 113Money Market Account 21% 27 115 114 60 140 225Certificates of Deposit 23% 32 71 100 105 167 153Mortgage 48% 67 166 120 59 91 192HELOC 17% 45 49 115 77 158 197Equity Loan 9% 88 148 157 33 79 185New Auto Loan 19% 58 157 145 51 103 185Used Auto Loan 16% 122 149 124 83 61 77Consumer Loan 22% 165 202 108 48 68 74Classic Card 54% 95 110 112 86 108 110Gold Card 17% 45 47 115 88 143 195Platinum Card 34% 68 108 124 75 124 151

All Fee Credit Middle Low Income Middle Inc.Households Driven Driven Market Depositor Depositor Upscale

Lobby 65% 94 83 104 100 105 118Drive-up 56% 99 103 113 91 103 107Direct Deposit 78% 72 111 107 102 106 115ATMs 60% 108 126 119 71 99 119Debit/POS Card 68% 121 120 108 87 83 92AVRU 18% 144 69 91 98 109 78Online Banking 58% 103 162 122 60 89 130Source: RFG's Spring 2010 Strategic Planning Study Group (SPSG). Usage indexes reflect consumer segment definition changes implemented by RFG in October 2009.

Delivery Channels

Product Usage

Understand Segment Behavior


Your CU Member Survey Data

Percent of All Households Overall Emerging Affluent10% 8% 3%

Percent ile 41 40 45Group Average 12% 9% 3%Peer Group 16% 11% 5%Extended DemographicsABC CU Average Age 29.3 29.5 28.7

$86,649 $70,241 $133,745Services per Household¹ 5.72 5.71 5.73Homeowner 77% 79% 72%Children at Home 51% 54% 42%

Overall OverallDelivery Channels² Index³ Overall Emerging Affluent Products Index³ Overall Emerging AffluentTraditional Loan Products

115 84% 86% 79% Auto/Truck Loan 176 67% 65% 73%Telephone--Employee 93 39% 43% 27% Mortgage Loan 152 71% 70% 74%Electronic Home Equity Loan 70 13% 14% 9%Direct Deposit 120 91% 93% 86% Home Equity Line 61 10% 12% 5%AVR 94 31% 40% 7% Overall Credit Card 117 76% 75% 80%ATM 124 85% 85% 85% VISA®/MasterCard® 112 68% 68% 68%Direct Debit 128 69% 68% 73% 115 34% 30% 44%

130 86% 86% 87% Personal Line of Credit 100 19% 17% 22%Debit/Check Card 133 84% 86% 80% Other Loan 139 24% 26% 18%Rewards Debit/Ck. Crd. 127 40% 31% 66% Deposit/Investment Products

Online Banking 145 88% 86% 95% Checking 104 92% 91% 95%Bill Payment 156 52% 50% 55% Money Market 84 30% 32% 27%

124 46% 43% 53% Certificate 64 21% 23% 17%¹Services per Household is based upon Member Survey product usage anywhere, IRA 70 26% 27% 24% excluding retirement investments, mutual funds, annuities and stocks/bonds. Mutual Fund 73 16% 18% 9%²Delivery channel data is available only for Member Survey participants. Annuity 98 12% 13% 9%³An index above 120 means the Consumer segment has "above average" usage anywhere

compared with all Consumer segments. Indexes under 80 represent lower usage. 4Product usage is based on your members' delivery channel/product usage data at any financial institution for this particular Consumer segment.

Rewards VISA®/MasterCard®

ABC CU Average Income

Usage Anywhere4

ABC Credit Union

Usage Anywhere4

CREDIT DRIVEN PROFILE

Branch Teller Transaction

Overall Debit/Check Card

Online Account Statement


Example: Product to Segment Matching

Ratio PercentileAverage Average Total Average Average

Penetration Balance Profit Profit Penetration Balance ProfitLoan DetailReal Estate 3.3% $77,467 $860 $241,244 50 48 38

Mortgages* 1.8% $120,417 $1,370 $232,093 58 38 35HELOC 1.1% $30,450 $247 $15,414 48 53 46Equity Loan 0.8% $30,898 $282 $9,006 36 41 41

Autos 22.8% $12,259 $243 $214,495 54 51 60Direct Auto 20.9% $11,754 $241 $194,426 57 53 60Indirect Auto 3.1% $14,764 $262 $27,923 45 61 58

Credit Cards 20.7% $2,460 $49 $45,105 47 56 49Classic Card 8.8% $960 $0 ($2,995) 41 42 45Gold Card 3.8% $2,418 $210 $16,586 40 43 48Platinum Card 14.7% $3,227 $92 $45,185 59 50 46

Consumer Loans 7.7% $5,698 $14 ($12,631) 45 41 45Unsecured LOC 7.6% $2,419 ($4) ($9,147) 48 64 60Deposit DetailChecking 60.1% $1,441 $82 $200,981 47 41 71Savings 98.1% $1,339 ($76) ($285,748) 46 39 55Money Market 5.2% $16,530 ($132) ($19,658) 51 40 44

Traditional MMA 5.2% $12,492 ($109) ($14,363) 59 44 47Tiered MMA 4.0% $22,116 ($127) ($18,704) 45 48 42High-Rate MMA 0.6% $61,975 ($236) ($2,205) 42 48 37

Certificates of Deposit 3.2% $13,662 ($157) ($15,657) 39 46 51IRA 2.1% $6,512 ($82) ($5,334) 51 43 54Total 61*Penetration and Profit include Held and Sold Mortgages. Balance is Held Mortgage only.

Southeast

$349,576

Southeast Region - Retail HouseholdsPRODUCT DETAIL FOR CREDIT DRIVEN HOUSEHOLDS

Percent of Households: 7.8%

Percent of Profit: 13.1%

Percent of Loan Balances: 7.2%

Percent of Deposit Balances: 2.4%


Macro Level Targeting: Loyalty Borrowers $1000+

Bill Pay

Direct Deposit

2+ Services*

Loans

*Excluding Savings <$100


Macro Level Targeting: Loyalty $5000+ Deposits

Direct Deposit

1 Deposit Product*

Checking

Deposits

*excluding Savings/Checking


Example: Top Auto Loan Prospects

• Target using both Potential (Age/Inc.) and Loyalty ($Bals.) • Run April & August when you’re NOT running any other auto campaign.


Micro Targets • Onboard and Activate • Retain Active Households • React to exiting households


Newton’s 1st Law of Motion Law of Inertia

An Object at Rest will Stay at Rest An Object in Motion will Stay in Motion

Onboard and Activate


Activate Checking HHs at rest • Average # of Transactions per Checking is 38 and growing. • Any fewer than 20 Transactions, its likely a secondary checking


Example: Checking Activation

Find HHs Averaging fewer than 20 Checking Transactions/mo.


POS / Debit User1

Percent of All HouseholdsDelivery Channel TransactionsTeller

ATMPOS / DebitACH / EFTOnline BankingAVRU

Checks WrittenNSF / Overdraft

Total TransactionsProfileAverage Checking BalanceChecking CostsChecking Fee Income

Loan BalanceDeposit BalanceAverage AgeServices per Household

Loan ProfitChecking ProfitDeposit Profit

Total Household Profit1Shading represents the greatest value in that row.

($248) ($58) $36 $197($254) ($143) ($68) $26($32) ($10) $38 $142$6 $85 $104 $1703.07 2.98 3.02 3.4251.7 49.0 46.1 42.8

$22,904 $17,537 $13,015 $10,364$10,285 $10,176 $11,569 $17,930

$73 $130 $245 $473$140 $177 $233 $360

$2,494 $2,750 $3,053 $2,338

8.4 16.3 38.5 83.10.0 0.2 0.4 0.74.1 4.6 6.9 9.10.1 0.1 0.2 0.30.3 0.5 1.0 2.32.6 4.8 8.4 12.8-- 3.7 17.5 50.70.4 1.2 2.5 4.90.9 1.2 1.8 2.4

27% 23% 21% 29%

POS / DEBIT USER - PROFILE BY NUMBER OF TRANSACTIONS

Nat ional A verageMonthly POS / Debit Transactions

None 1 to 10 11 to 25 Greater Than 25

Activate Debit Cards at rest


Example: Debit Activation

Find HHs averaging fewer than 1 monthly Debit Transaction


Profitability Factors Ratio Percent ile Ratio Percent ile Ratio Percent ilePercent of HHs 4.6% 54 12.2% 45 83.2% 55Services per HH 1.31 50 3.24 42 1.85 46Percent Single Service 75% 50 12% 40 53% 45

Percent With Loans 33% 49 67% 50 42% 46Average Loan Balance $18,954 48 $21,699 36 $15,851 45Loan Margins 5.82% 65 4.93% 67 4.82% 66Real Estate Loan Mix 17% 40 42% 35 46% 42

Percent With Deposits 98% 48 100% 70 99% 47Average Deposit Balance $4,678 51 $31,486 40 $7,652 34Deposit Margin 0.20% 44 0.05% 47 0.43% 47Core Money Mix 57% 49 39% 47 69% 51

Loan Interest Income $349 54 $713 43 $317 48Deposit Interest Income $3 44 $16 46 $33 42Fee Income $151 70 $335 66 $195 73Operating Expense $285 48 $789 58 $397 52Loan Loss $95 45 $228 45 $117 45Efficiency Ratio 61.8% 57 76.0% 53 73.8% 61

Average HH Profit $123 56 $48 49 $32 52Loan Profit $164 53 $219 40 $74 39Deposit Profit ($41) 64 ($171) 62 ($42) 68

Return on Balance 0.85% 56 0.06% 46 0.22% 55

Other HouseholdsCross-Sold HouseholdsNew Households

NEW & CROSS-SOLD HOUSEHOLDS PROFILE

Onboard New Households

• 75% of New Households are Single Service

• 50% of Household Services will be sold in the first year

• 52% of New Retail HHs have a Checking


Example: Identify Lead Products

Dec-09 Jun-10 Dec-10 Percentile Peer GroupRegion

AverageNational Average

High Performers

4.7% 4.5% 4.1% 56 4.0% 4.1% 3.8% 4.5%Deposit accounts opened by new Retail Households (4.1% of Retail HHs in Dec-10): Consumer Checking 50.7% 49.8% 51.9% 51 54.9% 51.9% 51.6% 59.9% Savings 95.0% 97.2% 96.3% 52 94.8% 96.3% 96.3% 95.5%

Tiered MMDA 1.9% 2.5% 2.6% 53 2.8% 2.6% 2.5% 3.0% Traditional MMDA 2.4% 2.4% 2.6% 64 1.6% 2.6% 1.9% 3.1% High Rate MMDA 1.1% 1.1% 0.9% 43 1.7% 0.9% 1.4% 1.4% CDs (new/renewed) 4.6% 4.1% 3.5% 44 5.3% 3.5% 4.3% 4.9%Loan accounts opened by new Retail Households (4.1% of Retail HHs in Dec-10): Direct Auto Loans 11.1% 11.1% 13.2% 58 11.2% 13.2% 11.5% 11.5% Indirect Auto Loans 0.5% 0.4% 0.5% 45 0.4% 0.5% 0.5% 0.5% Consumer Loans 4.8% 4.4% 5.0% 49 4.1% 5.0% 5.6% 5.2% Equity Lines 0.7% 0.9% 0.8% 43 1.3% 0.8% 1.0% 0.7% Equity Loans 1.1% 0.7% 0.8% 35 0.9% 0.8% 0.9% 1.0% Held Mortgage 0.9% 0.9% 0.7% 40 1.2% 0.7% 1.3% 1.7% Sold Mortgage 0.3% 0.4% 0.4% 29 2.6% 0.4% 2.0% 1.8% Classic Credit Cards 1.7% 2.1% 2.0% 37 1.9% 2.0% 3.5% 3.7% Gold Credit Cards 1.3% 1.4% 1.3% 50 1.3% 1.3% 2.1% 2.6%

Platinum Credit Cards 3.7% 4.7% 4.8% 60 3.5% 4.8% 3.9% 3.6% Unsecured Lines 2.3% 2.2% 2.1% 47 3.9% 2.1% 3.4% 6.0%

IN NEW RETAIL HOUSEHOLDSWHAT TYPE OF ACCOUNTS WERE OPENED

New Household Ratio

Southeast -- Retail HHs Comparisons - Dec-10


Newton’s 2nd Law of Motion Law of Force

The Rate of Momentum is Directly Proportionate to the Force Acting on it.

Retain Active Households


Intend to Have at Pot./ New New Conv. Conv. New Conv. Pot./ TargetingAge Deposits Loans # HHs Open Other Loyalty HHs Balances1 HHs Balances1 Bal. Bal. Loyalty Efficiency

18-44 Sav. Only -- 4,981 20% 26% 10% 1,009 $17,150 1,285 $21,833 142 127 79 10545+ Sav. Only -- 12,016 16% 25% 6% 1,978 $34,546 2,956 $51,635 118 125 44 76

18-44 Low $0 13,186 13% 26% 13% 1,778 $27,175 3,396 $51,899 85 114 104 9745+ Low $0 12,442 20% 21% 5% 2,481 $38,842 2,631 $41,182 128 96 36 73

18-44 Low Low 2,490 18% 34% 12% 454 $1,408 846 $2,622 23 31 92 6345+ Low Low 3,692 13% 16% 9% 465 $6,224 590 $7,900 69 62 74 72

18-44 Low High 6,593 14% 30% 27% 944 $17,136 1,955 $35,482 107 157 216 17345+ Low High 9,423 19% 24% 18% 1,755 $30,693 2,261 $39,535 134 122 146 140

All High $0 12,586 7% 15% 11% 928 $16,569 1,839 $32,834 54 76 85 73All High Low 2,905 18% 14% 10% 533 $1,774 418 $1,389 25 14 78 55All High High 5,269 19% 9% 17% 1,013 $16,519 486 $7,915 129 44 137 129

Consumer Segment EstimatesFee Driven 12,182 14% 13% 0% 1,705 $24,119 1,584 $22,875 81 55 0 33

Credit Driven 8,798 11% 44% 28% 968 $14,641 3,871 $59,771 68 198 215 160

Middle Market 21,037 28% 33% 17% 5,890 $87,509 6,942 $105,289 171 146 131 147

Low Income Depositor 18,414 9% 10% 0% 1,657 $21,978 1,841 $24,927 49 39 0 20

Middle Income Depositor 16,480 16% 17% 16% 2,637 $35,265 2,802 $38,253 88 68 123 107

Upscale 8,672 18% 31% 17% 1,561 $24,525 2,688 $43,111 116 145 131 126

Total 85,583 16% 22% 13% 13,338 $208,036 18,663 $294,226 100 100 100 1001 Balances shown in $000s. Bold text indicates the highest figure or index for each segmentation scheme.

Weighting 37% 5% 58% 100%

AUTO / TRUCK LOAN TARGETING MATRIX

Sales Potent ial IndicesResearch Data Projected Potent ialSegment Descr ipt ion

ABC Credit Union

Target on Survey Data


Example: Auto Retention

Target Households at their 2,3,and 4 year Auto Loan Anniversary


Newton’s 3rd Law of Motion

Action / Reaction For Every Action there is an Equal

and Opposite Reaction

Be Reactive

©2013 Fiserv, Inc. or its affiliates www.raddon.com / 800.827.3500 CEO Strategies Book Pages: 10

How Well Are You Retaining Households?CEO Average - All Households - December 2012

810

2,843

0 500 1,000 1,500 2,000 2,500 3,000

Net Change in HHs

Gross New HHs

2,286

96.0% 96.0% 96.3%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

CEO Average CEO Average High Performers

Household Retention

Percentile 51

Lost Households:

How strong is your household retention? Low retention rates will hinder overall growth.

31


Retention Example: Checking Will Close

Find INDs in the Prior period with EFT or Bill Pay and today they are not using that channel

“P_” Indicates a defined prior period.


Retention Example: Loans Closing

Find INDs that decreased total loans by at least $5000 and 1/3 the balance in the past quarter.

“P_” Indicates a defined prior period.


Example: Moved Households

Find HHs that moved, but are still convenient


ROI Measurement


3 Key Metrics • Balance (Basis Point Acquisition) • Profit (ROI) • Share of Wallet (% of your Potential)


Raddon’s Profit Calculation Example for an MMA Account:


Marketing ROI = Revenue – Campaign Expense Campaign Expense

Marginal ROI = (Revenue – Variable Costs) – Campaign Expense Campaign Expense

Fully Allocated ROI = Profit – Campaign Expense

Campaign Expense

Account Acquisition Cost = Campaign Expense

(Number of Direct + Number. of Indirect Accounts/Units)

Basis Point Acquisition Cost=Total Balance Of Direct New Accounts -and- Total Balance of Indirect New Accounts Total Expense For Campaign Total Expense For Campaign Profit= NI Income + Net Int Margin – Loan Loss - fixed expenses - variable expenses

Revenue= (Interest Income + Fee Income) – (Loan Loss + A/L Adjustment)

Profit Calculations


48

Balance Drives Profit


26

Measure Checking HH Relationships

©2013 Fiserv, Inc. or its affiliates www.raddon.com / 800.827.3500 CEO Strategies Book Pages: 364, 3

With Which Segments Is Your Total Share of Wallet Strongest?CEO Average - Retail Households - December 2012

Traditionalists

Baby Boomers 50

Gen X 49

Gen Y 50

Credit Driven

49All Retail HHs

50

Fee Driven 50

Percentile

Percentile

50

50

50

49

50

All Retail HHs 49

Upscale

Low Income Depositor

Mid Income Depositor

Middle Market

27.0%

17.8%

23.6%

30.3%

43.8%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%

All Retail HHs Gen Y Gen X Baby Boomers Trad.

Generational Segments - Total Share of Wallet

27.0%24.3%

15.7%

25.0%

45.6%

30.8%

22.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

All RetailHHs

Fee Driven CreditDriven

MiddleMarket

Low Inc.Depositor

Mid Inc.Depositor

Upscale

Consumer Segments - Total Share of Wallet

55 Measure Share of Wallet

SOW:

Your Own Total

_______

100% of Potential


CEO Strategies Book Pages: 381

How Much of the Deposit and Checking Relationship Do You Control?CEO Average - Retail Households - December 2012

29.1% 29.9% 29.3% 29.3%

34.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Dec-11 Jun-12 Dec-12 CEO Average High Performers

Deposit Share of Wallet

Percentil 50 52 49

52.2% 54.3% 53.7% 53.7%

62.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Dec-11 Jun-12 Dec-12 CEO Average High Performers

Checking Share of Wallet

Percentile 51 52 50

While many institutions are not in need of deposits, the deposit share of wallet still speaks to the depth of relationship with members.

Notice the higher deposit and checking share of wallet for the High Performers. This demonstrates a comprehensive approach to relationship development.

28 Measure Share of Wallet


Contact Information

Thank You

► Need ideas, recommendations or solutions to improve marketing results? Contact RFG for our unique blend of industry expertise, strategic analyses, objective intelligence and MCIF solutions.

► www.raddon.com

► www.theraddonreport.com

Kevin Stang Area Vice President Office: 800.827.3500 ext 6541 [email protected] Raddon Financial Group 701 East 22nd Street, Suite 400 Lombard, IL 60148

mailto:[email protected]

Marketing Analytics - CUNA Councils · ©2013 Fiserv, Inc. or its affiliates / 800.827.3500...

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Transcript of Marketing Analytics - CUNA Councils · ©2013 Fiserv, Inc. or its affiliates / 800.827.3500...