Watch and manage your customer flow.

• Author: Motley, L. Biff
• Position: Customer Satisfaction

As competition heats up in this low-rate environment, it is advisable for bankers to envision a cradle-to-grave pulse-taking research program that will help them grow their base of satisfied customers. It is helpful to think of your bank or your branches as "stores," where customers come in the front door, spend money and stay with you if they are happy--but leave through the "back door" if they become unhappy or are lured away by your competitors. This simple model provides a framework for setting up a strategic customer intelligence-gathering system to monitor customer flow. In other words, this system can help you to adjust your marketing mix so that you increase the inflow, pump up the levels of satisfaction and reduce the outflow.

Track new customers

Lets look at how the elements of such a strategic pulse-taking program might look.

First, you will want to know who is coming in the front door and why. Answers to the first question would come From the monthly "dynamic change" reports coming out of your MCIF system. You should be able to get a report of new customer households who have appeared on the system during the month. You will want to profile these so you can gauge their desirability. Are they profitable? Are they loan customers, deposit customers or full-relationship customers? One simple way to gauge them is to compute their average opening or average total household balances. This can be a good proxy for relative profitability. This data should then be trended over time so you can see your "running-rate" of new customers. If all is well, this will slope up, above the trendline of households leaving the back door.

In addition to profiling and trending your clients coming in, you will want to know why they am coming in. Are they responding to an offer you made? Are they fed up with the actions of a competitor? Or, have they been asked to leave? This is key information, and it can only be obtained through a new-accounts survey mechanism, such as a point-of-sale survey form or a follow up welcome letter/survey. Again, this information should be captured and trended monthly and put up for all to see in your war room.

Don't forget existing customers

Next, you want to put you finger on the pulse of...