Using Your MCIF for Relationship Pricing.

• Author: Coffey, John J.
• Position: Bank marketing strategy - Brief Article - Column

As bank marketers we can be so focused on our own marketing campaigns that we forget that our customers actually purchase other products from other places. Our customers are so used to receiving a discount from stores like Wal-Mart when they purchase in bulk, that they think it is logical that they are rewarded for "bulk" purchases of their banking products. And, customers are so used to having all of their purchases listed on one receipt--is it any wonder they want to have their banking products consolidated on one statement?

But, you say, "It's unfair that our customers are treating us this way. After all, we are a bank!" In fact, to meet their demands, we would need to reprogram our mainframe, reformat our report designs and try to figure out all sorts of ways to reprice our products in order to accommodate our customers.

Welcome to the 21st century! If you don't reward your customers for their consolidated balances and if you don't provide consolidated statements for them, someone else (perhaps Wal-Mart!) will.

Fortunately, you can use your MCIF to help you understand the combinations of products that are purchased by your customers. The MCIF can also help you price your most profitable combinations of products. This process is called "relationship pricing." Finally, you can use your MCIF to enable your data provider to implement relationship pricing and consolidated statement rendering.

How do I use MCIF research and reports to establish relationship pricing?

The most powerful feature in an MCIF is its ability to "household" all of your customers' accounts so you can have a holistic view of your customers' relationships. Using householding, you can view the customer's total deposit or loan balances. Better yet, you could construct a research query that would pinpoint customers who exceed some combined minimum balance level, based on total balances. Then, you could and use this file to run a "service combinations report" to view the most profitable combinations of products based on these minimum balance levels.

You could also use this research file with a "product summary report" to view the profitability of the individual services that make up these...