Why market to existing customers?

• Position: Brief Article

It has been more than two decades since householded marketing central information file (MCIF) technology was created for the banking industry, helping to make customer communications using direct mail more efficient and effective. The larger banks have now moved a generation beyond MCIF technology, deploying highly sophisticated, enterprisewide data warehouses linked to state-of-the-art campaign managers, CRM suites and analytical tool-sets. Data availability and actionable information hasn't been a real problem for years for any bank that really wants to communicate selectively with its customers.

The basic business proposition behind marketing to existing customers is easy enough to understand:

In almost all situations, it is far easier and less expensive to make a sale to someone with whom the bank already has a relationship than it is to acquire a new customer.

The technology allows the institution to easily define and find the customers it really wants to keep and then use direct marketing media to...