Share of wallet vs. Share of market

Here we are on day three of the 5 day blog and you already have extra words of wisdom from Bruce...the guru of Bank Marketing (and my mentor/boss!!!)! What a great week this is :)

So, we have established the fact that the average American consumer does business with more than 10 financial institutions. So let's add another statistic to the mix...The average rate of attrition (customers leaving your bank) is 14.6% annually. So, if you know that your customers are banking all over the place and that 14.6% of them will leave the bank, what are you doing to either capture that business, or put a lock on your back door?

Measuring your Market Share on the FDIC website is great if your main purpose is to see how your deposit base stacks up against the other banks in your geographic footprint. But what that won't tell you is how many of your customers have HUGE deposit accounts at State Farm Bank or any other online depository. I know of a bank in New England that has generated a significant deposit base through strictly an online promotion, paying a great rate (last I knew it was nearly 4% APY) and operating it as a Money Market Account. Did your customers make a deposit? How do you know?

That's the difference between share of market and share of wallet. Most of your customers have a need for more or new accounts. Are you having conversations with them to determine their needs, or do you determine their needs when they come to you and tell you about them? If you wait for them to come to you, you are missing the boat on tremendous opportunities.

Think about implementing a switch kit for all new customers...at a minimum you will learn that either a.) they have accounts elsewhere that they don't want to move or b.) they have accounts elsewhere that they are ready to move. Either way, you win. If option "a" is the answer, you now have a great chance to WOW your new customer into switching. If the answer is "b" then you are already a step ahead.

Good luck :) And a final thought for you: Minimizing your attrition by 1% can add nearly 17% back on your bottom line.

Happy customer retention!!
Jenna