Pub. 17 2020 Issue 2

Issue 2 • 2020 17 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S 1. Gather Customer Data. While you are satisfying the demands of your customers, you are gathering data, of course — from the number and type of transactions to fees waived and the length of their loans. For new customers signed up for the Paycheck Protection Pro- gram, data collection is even more critical. Leveraging that data in the future to understand how to best serve those customers is one of the most important ways to assess customer profitability, so make sure the data you collect is clean and accurate. 2. Use Communications. It goes without saying that continual communications with your customers provide you with additional information as well. Once they have their business back on solid ground, you will want to check in to see their plans for the future. You will also want to remind them of the important of- ferings you can provide that help them along the way; use multiple channels including email, your digital portal and your website. With continual touches, you can capture more information for a complete customer profitability picture. 3 . Apply Profitability Indicators. While collecting customer data is key, profitability indicators help you use that data effectively. There are certain indicators, such as the number of services or length of the rela- tionship, that will provide you with more confidence in the customer’s loyalty and profitability. This could help determine your game plan with the customer. If one customer has three services and five years with your institution while another has one service and one year, the data shows that the former will be more loyal, but not necessarily more profitable. Having a model to both track and analyze this data is important to see where there are gaps in profitability and opportunities for additional income. We all look forward to the day when COVID-19 is a distant memory. Until that day comes, start preparing to assess your customer profitability. n Jay Kenney SVP, Regional Manager Phone: (213) 247-5096 jkenney@pcbb.com pcbb.com Dedicated to serving the needs of community banks, PCBB’s comprehensive and robust set of solutions includes cash management, international services, lending solutions and risk management advisory services.