Matrix marketing: the sales force that never tires In their quest for greater profitability, banks are analyzing their databases of customers and prospects and targeting those segments that show the greatest promise for bolstering earnings.

AuthorWeissman, Rich

THE BANKING INDUSTRY IS GOING THROUGH SIGNIFICANT CHANGE. For many years, the industry addressed marketing and sales as a volume- and production-driven effort, founded on the belief that the more the bank sells, the more it will grow.

The three questions that dominated the sales and marketing activities were:

* How many new accounts did the bank sell, and how many new customers did the bank acquire?

* How did these new accounts and new customers impact balance-sheet growth?

* How did this translate into selling, on average, more accounts or services per customer?

These questions are, unfortunately, no longer germane in the industry. Instead, there is only one question: How do the sales and marketing activities at the bank positively impact earnings? This new culture, the "profitability culture," is where the industry is now headed, and banks need to get on track with the shift from the sales culture to the profitability culture.

The shift is occurring rapidly now that the industry is moving beyond the financial crisis into a post-financial-crisis era, searching for new ways to manage banks better. There are three factor s behind this shift:

* The industry is coming to understand that volumes and production do not translate into earnings, and ultimately, it's not about growing the balance sheet and the base, it's about growing profitability.

* A new breed of bank marketing and sales management is surfacing, and this new breed is more comfortable with understanding the details behind the income statement. They understand that successful selling and marketing is about positively impacting the income statement, and they are more comfortable using quantitative analytics and database tools to help them uncover these details.

* There are incredible "big data" tools now available through very sophisticated database systems that allow for sophisticated data mining and micromarketing.

This means that simply selling more aggressively is no longer the answer. Instead, being smarter about the marketing and sales process is the right response. One critical way to be smarter is to design and develop a matrix marketing program.

Here's how matrix marketing works:

First, it's important to have a clear definition of what the term matrix marketing means. In its simplest form, it's a systematic segmentation of the customer and prospect database to define unique segments that are "ripe" for targeting to improve their contribution to bank earnings. The database...

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