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Shrewd Customer Profit Moves at Bank of America

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What customer behaviors drive bottom line profitability? While many firms, at best, muddle around this question.....BofA KNOWS! Stellar data analyses has shown the bank that its mortgage customer is THE "gravy train" customer.


Forbes reports that the typical BofA mortgage customer will eventually have an astonishing six BofA products (credit card, debit card, checking account, savings account, and online bill paying). That's in stark contrast to the bank's non-mortgage customer who typically has only a checking account and an ATM.
WOW!!! How powerful is that "connect the dots" insight!! It's a huge strategic directive by which other BofA customer-centric initiatives such as new customer prospecting, customer experience programs, cross-selling tactics etc. can be mobilized.
OK, I admit that my small-town North Carolina roots naturally make me proud of BofA's savvy customer management moves. ( I grew up just 30 miles away from the bank's Charlotte, N.C. headquarters.) Can't help but crow a little.


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Jill Griffin (jill@loyaltysolutions.com) is president of Griffin Group (www.loyaltysolutions.com), a loyalty research, seminar, and consulting firm founded in 1988. She is author of Customer Loyalty: How to Earn It, How to Keep It and co-author of Customer Winback: How to Recapture Lost Customers and Keep Them Loyal.

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  • by Annie Tue Sep 25, 2007 via blog

    I'm trying to grasp if you're being sarcastic or not? Driving customer profitability by cross selling off a key relationship product like a mortgage seems basic to me. Crucial business 'common sense' rather than 'shrewd' in my view. My cynical side would say that what drives customer profitability for BOA is customer apathy and I'd say they are very much aware of that, too.

  • by Cam Beck Tue Sep 25, 2007 via blog

    I've really been impressed by their online banking tool, which makes tracking and paying bills much easier for me. It's a "free" service, meaning I am not charged directly for it. I switched over a few months ago, and the service I've received has been top-notch across the board. I'm very pleased. I've seen a 30-year mortgage schedule and am not surprised that this is a potentially a profitable customer providing the bank manages their risks properly. But as we've seen, that's not always assured.

  • by ginger Tue Sep 25, 2007 via blog

    I agree with Annie. Cross-selling products from a major loan product is nothing new. BoA's more recent press has come from their "profitability" quest--upping their ATM fees 50% in many cases from $2 to $3! (There may be others, this one was the media splash!) While fees are ubiquitous and often necessary, it's a question of excessiveness, esp on personal accts. Credit unions are a much better choice for the average consumer from my experience, with lower loan rates and fees and better return on deposit products! And today, most are open to the public...

  • by jill Tue Sep 25, 2007 via blog

    Hi all, and thanks for the great posts! You are so right that cross-selling is basic strategy, but to cross-sell effectively requires, from my vantage point, some 'shrewd' execution. I see many companies, swimming in customer data, who fail to connect the dots on how to mobilize operations, selling, marketing, customer care, etc. to build long-term 'gravy-train' customer relationships. Basic, yes. But, just because something is basic strategy, doesn't mean it is done well. I routinely get calls from firms (banks, included!) who are treading in mirky water (there's that water pun again!) with no reliable business intelligence about which customers are profitable, why, and the proven protocols for replicating these 'multiple product hooks' with other customers. For me, BofA is shrewd in getting to the heart of these basic, yet profoundly important questions and then executing accordingly. Again, thanks for your posts! I love them!!!

  • by Bryan Tue Sep 25, 2007 via blog

    I think the bigger point trying to be made is to 'do the analysis' and you too could be rewarded with higher profits -- it doesn't much matter if you're selling shovels or mortgages. Specific to BofA, I refinanced through a broker and ended up with a BofA account. It's fantastic! And their service is so much better than Citibank and others that BofA is the first I turn to for other banking products (although I still shop for competitive rates, etc.).

  • by Paul Barsch Tue Sep 25, 2007 via blog

    For many large financial services companies, there is a lot more than just analysis behind their recommendations and efforts to increase wallet share. A robust data infrastructure and proper data management processes, along with trained and skilled people make it happen.

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