1. Four Proven Strategies to Improve Your Profits!
The Profit Plan
Four Proven Strategies to Improve Your Profits!
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2. The Problem…or an Opportunity?
What if there are only a handful of profitable account holders who are paying all our bills?
Who are these people, and what happens if they leave?
Just how much money are we losing from our least profitable account holders?
Are we selling our most profitable products or are we just selling unprofitable products to unprofitable account holders?
How can I even run this business, if I don’t even know these things?
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3. The Problem…or an Opportunity?
You are not alone. The vast majority of financial institution executives don’t know the answers to these questions either. But you can know!
By knowing the answers to these questions you will be ahead of your competition. You will generate more profits with less effort than you thought possible.
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4. Building a solid foundation
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5. Building a solid foundation
A profitability interface is needed to seamlessly integrate these two sets of data with each other.
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6. Building a solid foundation
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7. Building a solid foundation
Profitability Components
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8. Building a solid foundation
Balancing back to the general ledger
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9. Building a solid foundation
Account-level profitability is the foundation!
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10. Strategy #1 – Retain and deepen your relationships with your most profitable account holders.
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11. Strategy #1 – Retain and deepen your relationships with your most profitable account holders.
Knowing who your most profitable account holders are is the most important step to implementing the first strategy of your Profit Plan.
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12. Strategy #1 – What percent of your profit do your most profitable account holders generate?
Typically, only 20-30% of your account holders are generating all of your profits. The remaining 70-80% of the account holders are a drain on your financial institution’s resources.
The top 1% most profitable account holders can generate over 50% of your profits.
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13. Strategy #1 – What percent of your profit do your most profitable account holders generate?
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14. Strategy #1 – What percent of your profit do your most profitable account holders generate?
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15. Strategy #1 – Account Holder Grades
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16. Strategy #1 – Average Length of Relationship
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17. Strategy #1 – Lifetime Value of Account Holder
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18. Strategy #1 – The CEO Heart Attack Graph
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19. Strategy #1 – Top 1% Most Profitable Account Holders
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20. Strategy #1 – Assigning Personal Bankers
Retaining your most profitable account holders is the key to successfully implementing your Profit Plan!
Deepening relationships with your most profitable account holders is the most profitable strategy you can implement! This is your lowest hanging fruit.
This involves one-on-one marketing and old school “leather on the street”. It is the least efficient way to market your products, but it is the most effective way of generating additional profits.
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21. Strategy #1 – Account Holder Profitability
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22. Strategy #1 – Account Holder Profitability
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23. Strategy #1 – Account Holder Profitability
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24. Strategy #1 – Relationship Pricing
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25. Strategy #1 – Measuring The Results
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26. Strategy #2 – Add more account holders who look like your most profitable account holders.
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27. Strategy #2 – Using Demographic Data
Age
Household Income
Net Worth
Marital Status
Presence of Children
Homeowner Renter
Home Market Value
Likely Investors
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28. Strategy #2 – Using Demographic Data
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29. Strategy #2 – Using Demographic Data
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30. Strategy #4 – Households who have a mortgage with you, but do not have a home equity loan, have an income greater than $30,000, and have children!
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31. Strategy #3 – Determine your most profitable products.
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32. Strategy #3 – Determine your most profitable products.
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33. Strategy #3 – Determine your most profitable products.
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34. Strategy #3 – Determine your most profitable products.
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35. Strategy #4 – Cross sell your least profitable account holders your most profitable products so they become more profitable.
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36. This involves targeted marketing to thousands of account holders.
Strategy #4 – Cross sell your least profitable account holders your most profitable products so they become more profitable.
This involves targeted marketing to thousands of account holders.
This marketing strategy is very efficient, but it is also very ineffective.
However, it is quite common to have an ROI over 100% when using these very targeted marketing campaigns to sell your most profitable products.
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37. These are the best customers at another financial institution!
Strategy #2 – Unprofitable households with low balances and a high net worth.
These are the best customers at another financial institution!
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38. Implement Your Profit Plan!
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39. Implement Your Profit Plan!
The best way to implement your Profit Plan is to use a good profitability software system that can provide a strong foundation to support all four proven strategies to increase your profits.
Is it:
Easy to use?
Easy to install?
Easy to maintain?
Easy to distribute?
Easy to integrate?
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40. For More Information Gene Palm: President / COO
Website:
Work Phone: (863)
Cell Phone: (863)
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41. Four Proven Strategies to Improve Your Profits!
The Profit Plan
Four Proven Strategies to Improve Your Profits!
Copyright Profit Resources 2006