Behavioral Tracking During a Merger.

• Author: Caplan, Jeffrey
• Position: Brief Article

Most bankers understand the rationale for bank mergers and the challenges associated with making mergers a success. To put it simply (and somewhat simplistically), the rationale for merging centers on efficiency: serving a larger number of customers more efficiently, offering the customers the efficiency of a broader range of products and services, growing the customer base more quickly and efficiently, and so on.

The challenges of mergers are equally well understood. They range from internal issues, such as

* personnel,

* operations and

* technology,

to external issues, such as effective communication. In other words, the challenges center on reaping the maximum reward from the merger, both as it relates to operational efficiency and the maximization of the value of the customer relationships that are being acquired.

Moreover, it is well understood that mergers occur in a very time-compressed environment. Failure to keep on track, whether it relates to system conversions or customer communications, lessens the value of the merger--sometimes dramatically.

Customer retention: the traditional approach

One of the most difficult challenges facing bank mergers is customer retention. Efforts at retaining customers usually focus on a series of communications highlighting the benefits of the new entity coupled with details covering the specific changes a customer will see in his or her relationship. Banks supplement these outbound communications with phone numbers the customers can call with questions and, in some instances, an additional outbound calling campaign aimed at high-value customers. The results of these efforts have been mixed. Few people involved in merger activity believe that banks are doing all that they can to communicate precisely with the customers who most need to hear from them.

What if banks could do more? What if they...