Scaling the ladder to marketing excellence

As presently constituted at most banks, marketing is often a "broken" or misutilized discipline. In cross selling, current bank efforts to gain a greater share of customer wallets often result in the origination of unprofitable accounts. In prospecting, banks too often prospect for new customers by offering concessions such as free checking or high-rate certificates of deposit. While such programs are a magnet for price-sensitive customers, banks unfortunately do not have business systems to serve these customers at a profit. In retention, banks typically do not focus retention efforts on the 30% of customers who provide 140% of profits. In profitability turnarounds, most banks concentrate on average product profitability, overlooking how it varies among customers. In refining cost-to-value, banks are embracing technology as a potential means of reducing costs while increasing customer revenue. The 4 stages in marketing's evolution are described.