In today’s economic climate, everyone is looking to cut costs. But what if you could cut costs and better serve your customers at the same time? There is one operational change you can make right now that will begin paying dividends right away.
Before I share this secret with you, let me ask you to do a little self reflection. Consider how much your institution spends per year on customer contacts, including statements, marketing or other mailings, outbound calls, email marketing, and so on. If you are like most institutions, this number is rather significant. Now, how many of these contacts are not made due to bad addresses, phone numbers, email addresses, etc.? Traditionally, this has been viewed as a cost of doing business. However, we often forget that it reflects a shortcoming in the customer management program that costs you money.
The key is to stay current with your customers. Many retailers and vendors in other industries make a point to regularly verify their customer information at the point of sale. When was the last time your teller staff took an extra few seconds to verify a customer’s address, phone numbers, and email address? For most institutions, this is just not standard procedure.
So, how can you save your institution thousands of dollars with one simple operational change? Implement a standard process to require an annual or semi-annual verification by tellers of customer contact information for each customer as transactions are made.
Really? Let’s review the math. If every month you mail marketing or other materials to 20,000 customers and each piece costs $1.25 to produce and mail, your total cost is $25,000 monthly or $300,000 annually. Now, if 5% of the customers on that list have bad or outdated mailing addresses, you are sending to 1,000 bad addresses at a cost of $1,250 per month. In addition, we know that customers will continue to move each month and this number will continue to increase. So, if this increases another 1% each month, by the end of a year, 16% of your customer addresses will be incorrect. If half of those take the initiative to notify you of their change, you are still at 8% or a cost of $2,000 per mailing to send to bad addresses. And the costs for monthly statements and other account notifications are far higher due to the higher volume of those mailings, and those costs are recurring each month.
In the same manner, bad phone numbers can also occupy your staff’s valuable time. Additionally, phone numbers change much more frequently than addresses, particularly with the decrease in land lines and the increasing popularity of mobile phones. In an outbound calling campaign, one dedicated outbound salesperson may be able to make 10 calls per hour or 80 per day on average or 1,600 per month. If 10% of these have bad, missing, or outdated phone numbers, that is 160 wasted calls per month.
The point is that if you do not take proactive steps to maintain your customer data, it degrades over time exponentially. This costs your institution money exponentially as well. The more your information degrades, the more you pay. It also impacts your return on investment (ROI) for any sales or marketing campaigns underway as you will need higher and higher returns as larger and larger numbers of attempted contacts are not made due to bad data, whether address, phone number, or email.
Quest Analytics can help you implement a proven program to maintain your customer data. Contact us today and learn more about our cost-effective IQDataQuality solution and how it puts a proven process in place to have your tellers and other front line staff to maintain your customer data. Quest’s IQDataQuality solution interfaces and works directly with all core systems and has been embraced by customers across the country with outstanding results.