Capturing Displaced Bank Customers with Propensity Data and Direct Mail

Capturing Displaced Bank Customers with Propensity Data and Direct Mail

As the financial landscape continues to shift, smaller banks and credit unions have a prime opportunity to attract customers who may soon be without a banking home due to the closure of nearby branches. When large banks like Wells Fargo announce closures, it opens the door for nearby credit unions and smaller banks to step in and connect with these displaced customers. Success in this endeavor hinges on understanding who these customers are and predicting where they might turn next. This is where propensity data and targeted direct mail come into play.

The Opportunity: Engaging Displaced Customers

Bank closures are increasingly common as larger institutions streamline their operations and focus on digital channels. This trend creates a significant opportunity for smaller banks and credit unions to fill the void left by these closures. Displaced customers are often in search of new financial institutions that can meet their needs, and with the right strategy, your institution can become their new go-to.

One of the most effective ways to capitalize on this opportunity is by utilizing propensity data—a powerful tool that enables you to identify and target customers likely to be impacted by nearby bank closures. For instance, if a Wells Fargo branch is closing, propensity data can help you identify “Wells Fargo-like customers” who are likely to be seeking new banking relationships. This data is derived from the behaviors and preferences of existing Wells Fargo customers, allowing you to create a model that predicts who these displaced customers are.

Propensity Data: A Strategic Asset for Credit Unions and Banks

Propensity data provides valuable insights that can enhance your marketing efforts. By understanding the characteristics of customers who are likely to leave their current bank due to a closure, you can design targeted campaigns that speak directly to their needs and concerns. Here’s how you can effectively use this data:

1. Identify Key Customer Segments: Propensity data allows you to segment potential customers based on their likelihood of switching banks. This segmentation can be based on factors such as income level, spending habits, and previous banking behaviors. By understanding these segments, you can create more personalized and relevant marketing messages.
2. Craft Targeted Messaging: Once you’ve identified the key segments, you can tailor your messaging to address their specific concerns. For example, if your data shows that a significant portion of the displaced customers are concerned about fees, you can highlight your credit union’s lower fees and better rates in your direct mail campaigns.
3. Focused Outreach: Propensity data enables you to concentrate your outreach on those most likely to respond. By combining this data with geolocation information, you can target your direct mail and email campaigns to areas where bank closures are occurring, ensuring that your message reaches the right audience.

Executing a Successful Direct Mail and Email Campaign

Direct mail remains one of the most effective ways to reach potential customers, especially when it is personalized and relevant to their needs. By using propensity data, you can create highly targeted direct mail campaigns that resonate with displaced customers and encourage them to consider your institution as their new financial home.

Here’s how to run an effective direct mail campaign:

1. Personalize Your Offers: Use the insights gained from propensity data to craft personalized offers that appeal to the specific needs of displaced customers. Whether it’s offering a no-fee checking account, special loan rates, or highlighting your community involvement, personalization can significantly increase the effectiveness of your direct mail.
2. Integrate Digital Channels: Complement your direct mail efforts with email campaigns that reinforce your message. Use the same data-driven approach to segment your email list and deliver targeted messages that align with your direct mail offers. This multi-channel approach ensures that your message is seen and considered by your target audience.
3. Monitor and Adjust: As with any marketing campaign, tracking your results is crucial. Monitor the response rates to your direct mail and email campaigns, and use this data to refine your approach. Propensity data can be continually updated to reflect changing customer behaviors, allowing you to optimize your campaigns in real-time.

Building Trust and Community Engagement

In addition to the technical aspects of using propensity data and direct mail, it’s important to emphasize the value of community engagement. Credit unions and smaller banks have a unique advantage in their ability to connect with customers on a personal level and build trust within the community. As you reach out to displaced customers, emphasize your commitment to providing personalized service, community involvement, and financial education.

By positioning your institution as a trusted partner that understands the needs of displaced customers, you can build long-lasting relationships that go beyond the initial acquisition. This approach not only helps you capture new customers but also strengthens your reputation as a community-focused financial institution.

Seizing the Opportunity with Propensity Data

The closure of nearby banks presents a significant opportunity for credit unions and smaller banks to attract new customers. By tapping into propensity data and executing targeted direct mail campaigns, you can identify and connect with these displaced customers with personalized offers that meet their specific needs. This data-driven approach, combined with a commitment to community engagement, will position your institution as a leader in the market, ready to serve those seeking a new banking home.

Footnote: Content inspired by insights from the article “7 Credit Union Marketing Trends” published by EVERFI Content Team .