CHECKING ACCOUNT ACQUISITION AND RETENTION (Jan 2015)

Consumer Decision Process
Onboarding and Cross-selling
Relationship Strategies; Pricing

Key Finding from a Recent SYNERGISTICS Research Survey:

A majority of checking account holders have multiple accounts with their main checking provider – how will your organization retain these important customers?

The 2013 survey Relationship Strategies for Checking Accounts revealed that more than half of checking account holders have multiple accounts with their main checking provider.  Incidence of multiple accounts tends to increase somewhat with household income.

Highlights of the Study

This study evaluates the checking account relationship in order to assist providers in developing effective acquisition and retention programs.  It examines onboarding and cross-selling, packages and value-added services, reward programs, and pricing issues.

National Internet Survey – 1,000 consumers age 18 or older.

 

Key Dates

October 24, 2014 – Charter fee/Intro pricing ends.
October 24, 2014 – Final acceptance of comments on questionnaire.
January 2015 – Project Report available.

 

Strategic Questions

  • What factors influence the stability or volatility of households’ main checking account relationships?  What are the motivations or reasons for recent account opening?  How prevalent is recent provider switching in the market and what has driven this activity?   Why do some households use multiple checking accounts, and is this a challenge or opportunity?
  • What “value-added” strategies should providers explore to strengthen the checking account relationship?  What are customers’ experiences with and perceptions of relationship reward programs?  Are PFM services widely valued?  Should identity protection services be offered to customers?
  • Is the checking account a “gateway” for providers to cross-sell other financial products and services to their customers?  How extensive has this activity been?  Are onboarding strategies successful?  Are checking packages an effective tool for strengthening and expanding customer relationships?
  • Are customers satisfied with their household’s main checking account?  Are there specific aspects of the account relationship – such as customer service, pricing, or access channels – where satisfaction is in need of improvement?   How important is the checking relationship to customers when shopping for other accounts and services?
  • How large is the segment of the market that does not have checking accounts?  What are their reasons for non-usage and can they be converted?   What is the overall market for new checking account openings in the near term?
  • Is free checking still an expectation among consumers?  Beyond traditional pricing, how acceptable are fees, minimum balances, or activity requirements for various checking features or benefits?
  • Which customer identifiers – demographic, behavioral, or attitudinal traits – will be useful to checking providers for designing acquisition and retention strategies?  Do specific product features or benefits – such as rewards, PFM services, or packages – have unique appeal to specific segments?

 

Research Issues

  • Checking accounts are the heart of consumer financial relationships.  Checking account providers typically enjoy the position as the primary financial services provider.  Recently, a variety of non-traditional providers have been entering the checking account market such as Walmart and a variety of direct or Internet-based providers. Therefore, it is essential for providers to carefully assess checking account acquisition and retention strategies.
  • What factors impact the consumer decision process when selecting a checking account provider?  Do these factors remain important as the relationship continues?  Onboarding and cross-selling programs go hand in hand in expanding relationships.  Onboarding occurs in the early stages of a relationship, while cross-selling programs should be ongoing.  A variety of channels can be utilized for both onboarding and cross-selling ranging from the branch to mobile options.
  • What relationship strategies beyond cross-selling and onboarding can be effective for engaging checking account customers?   Do consumers respond to checking packages, reward programs, and value-added services?  Checking account pricing is an ongoing issue, particularly as free checking offers have all but disappeared.  Instead several large banks have recently announced all-digital, no fee checking accounts.  A significant number of consumers have multiple accounts with their main checking provider.  However, this may be impacted by competition in a rising rate environment.  This project will evaluate the checking account relationship in order to assist providers in developing effective acquisition and retention programs. [F228]