Fixing unprofitable accounts…
…It’s easier than you think if you have a plan.
One of the biggest concerns heading into a deposit profitability engagement is “What are we going to do with unprofitable accounts?” It’s a valid concern. Here’s my view…
You’ve already invested a lot in any unprofitable accounts. You invested in acquiring the account, and you’ve been bankrolling them month after unprofitable month. It all adds up.
But you need to keep in mind that you didn’t set out to lose money on purpose.
It’s just a symptom of not having #DepositProfitability insights when you set up your account types. No need to be apologetic for asking them to at least be breakeven now.
It’s business, not personal.
You also need to consider that your bank’s got a lot of similar depositors who manage to contribute to your bottom line even though they also have small balances and similar circumstances.
You’re not asking them to do the impossible, just be reasonable.
It’s all about increasing their deposit revenues or cutting their activity costs. They can pay or change behavior. Their choice.
Here’s the secret…You don’t need to fix everyone all at once.
You’ll make your biggest impact by focusing on your worst offenders.Fix them first for a quick win.