Asking for that Second “Date”

By Ryan Sullivan

Studies estimate that it costs five times more to obtain new business than to increase it with existing clientele. In a highly competitive commercial climate, simply driving sales numbers higher is not enough. In many industries, bigger figures have to reflect the use of cost-effective and efficient marketing machinery that creates less expensive and more profitable sales by repeating and expanding them to current clients.

The Background

Local, small-town businesses know better than any national concern just how important it is to keep customers coming back. With more limited potential customer pools, it’s imperative to leverage every consumer contact into another potential business opportunity. Northstar Bank, Bad Axe, Mich., took a look at its target market in the largely rural areas of mid-Michigan’s Thumb region. Absent an unexpected major increase in population, more banking business had to mean more than simply attracting new clients: It meant better communication about the bank’s full menu of services with every new product addition. That’s how Melissa Guza, Northstar Bank’s marketing officer, ended up in the relationship business.

The Problem

Guza and management regularly saw new and satisfied customers come through the doors, but careful analysis of their data showed that many ended up using only the one service they came for in the first place. She figured many simply didn’t know or hadn’t considered the other products they could use at Northstar. In other words, no one had asked them for a second date. Relying on bank staff to individually cross-market and sell additional services to customers was already an established practice. But human beings get busy and they forget. They don’t always follow a system, follow-up can be sporadic, and some simply do the job better than others. There had to be a less fallible, more routine, and yet personalized way

The Solution

So Guza set to work with The F.P. Horak Company and its proprietary engage! Relationship Marketing Solutions program. They created an on-boarding initiative to expand business with new clients by using a campaign to send specially timed and uniquely tailored direct mail pieces to their homes. By analyzing client data, Guza and the F.P. Horak team were able to create a highly automated system that routinely and regularly contacts new clients with unobtrusive and helpful information on how they can maximize their use of specific Northstar Bank services suited to their needs. Because the communications are personalized, they’re less likely to meet the enemy of all direct mailers: the recycling bin. Each piece reflects a real knowledge of the client’s current financial situation and potential needs. And the impression is clear: Northstar Bank often knows its clients’ needs before they do, and reaches out to help.

“With the on-boarding program, we are targeting households that are new to Northstar Bank. Our direct mail program often targets households who only carry one product. The goal of both programs is to expand our wallet share and strengthen our relationship with the customer. Print technology has come a long way in terms of customization and cost. We are able to personalize our mailings so they don’t get lost in the shuffle, and at the same time, stay within budget,” Guza says.

At the same time, Guza herself has more control over how relationships are strengthened. “While our staff understands the importance of cross-selling and relationship building, the beauty of this program for me as a marketer is the control that I have. I don’t have to worry that my branch staff or I will overlook a follow-up letter or mail piece. I send the list directly to F.P. Horak and they print according to our pre-designed schedule

The Results

Big gains can begin with modest numbers, and financial figures alone often don’t convey the intangible, yet critical impact good relationship marketing and direct mail can have on business, Guza notes. “Considering that we’ve seen a 5–10 percent response rate on the on-boarding program, I consider it successful. Even if the customer does not open an additional account immediately, the value of touching that customer with our brand and gaining recognition for future financial services is worthwhile. The more familiar your customer is with you, and the more of an expert your business is perceived to be, the more likely it is that that customer will come to you when they have a need. Relationship marketing can certainly make you stand out from your competition.”