Targeting deposits: mass marketing for deposits is a thing of the past. Today, banks increasingly are using sophisticated targeting techniques to identify existing customers as well as promising prospects in areas near branch locations.

• Author: Wachtel, Christopher
• Position: Core Deposits

With the changes in the economy and proposed regulations involving fees, banks more than ever are looking at new ways of acquiring those critical core deposit dollars.

To boost core deposits, financial institutions are doing less mass marketing; instead, they are targeting customers both in the bank's database as well as in areas surrounding their branch locations.

And while some institutions are still searching for the profitable checking households, others are looking to find, those core deposits in certificate of deposit (CD) or money market account customers.

Rather than simply mailing to all customers in one category or to all households surrounding branches, banks are relying on more sophisticated, intelligent target-marketing approaches using historical data and computer-based models.

Below are examples of recent core-deposit-raising campaigns used at four different banks.

Building a model

AMCORE Bunk (assets: $3.8 billion), Rockford. Ill., recently used a sophisticated computer model that took all its existing high-balance CD customers, scored them on transactional data such as "other product" ownership, balances, and activity as well as hundreds of demographic and geographical attributes. AMCORE then searched its customer database to find more "'look-alike" households.

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The model was also used to score prospects to find new households around its branch footprint in northern Illinois, the Chicago suburbs and southern Wisconsin.

"Like many banks today," says Theresa Wendhausen, CFMP, assistant vice president, advertising and PR manager of AMCORE, "We needed to bring in core deposits and this program proved to be the most cost-efficient way to identify and mail potential households--with minimum waste and duplication."

AMCORE mailed a four-color postcard to 56,000 model-selected customers and 363,000 targeted prospects in their market area. The program brought in:

* $36.8 million in regular CDs.

* $1.5 million in IRA CDs.

* Total CDs of S38.3 million.

The new" deposits from prospects averaged $33,929 while existing customers were fractionally higher at $34,095.

The model look in all the institution's available information, plus used outside demographic data. And where there may have been an imbalance of results, the model-maker adjusted the scoring to find the best prospects.

Promoting money market accounts

In today's environment, plenty of deposits are up for grabs because people are looking for a safe and...