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Echo Partners Community Bank Blog

    Your most profitable customer isn’t necessarily your best customer

    [fa icon="clock-o"]} [fa icon="user"] Howard Lothrop [fa icon="folder-open'] deposit profitability, analytics

    black puzzle pieces in 3dYour most profitable customer isn’t necessarily your best customer.

    Sounds strange, doesn’t it? Why wouldn’t your most profitable customer be your best customer? After all we know that step 1 in deposit profitability is identifying your best accounts.

    The answer is your best customers are qualitative not strictly quantitative. They’re going to tick all the right boxes: huge balances, outsized profits, and you’d love to have more just like them.

    There’s just one problem. The very reason you noticed them out of a sea of tens or hundreds of thousands of customers is that they’re an outlier. They stood out because they’re the exception to the rule.

    Sure, if you’re aware of a specific example, reach out to them, but don’t design your marketing for them. They’re the $100 million balance in a $10,000 world and if you spend your time looking for more like them you’re fishing in the wrong pond.

    So what do you do? You still look in Quadrant 4 (big balances and profits) but you look more at the middle or along the edge of Quadrant 3 (small balances but still profitable). Why? Because now you’re looking for a population that fits your deposit profit and behavior goals, not the single biggest whale that you can’t duplicate.

    It’s about finding more like them, not finding the single best.

    Do you want to grow your bank profits with little to no risk? Click Here to  Discover How
    Howard Lothrop

    Written by Howard Lothrop

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