Loyal, lucrative customers are NOT the most profitable ones in financial services?
There’s this statement. “Solid analytical data about actual buying behaviors is needed to determine actual profitability.”
Then, there’s the “hands-on reality” of why this is so.
“A few years back, the head of a business intelligence tools vendor that served the banking sector made an interesting revelation to me …. While they all had chased the high-income, high-deposit customers to increase profits, analysis of their revenue streams showed an entirely different picture: that their most profitable customers came from the lower-income, lower-deposit end of the scale. How is this so? Because these people had to pony up fees for overdrafts and not meeting minimum balances and so forth.”
Now that’s a good example of how business intelligence can provide the right data for good business decisions like; where to redirect marketing dollars, balanced with the right business ethics and compliance for a more profitable future.
Joe explains further, “The lesson here is that it’s smart to do a good analysis at the data coming in from customer segments before investing in marketing or sales pushes. Those seemingly unengaged customers could be your bread and butter.”