Customer satisfaction means different things to different people," begins a new Wachovia TV advertisement. For one "customer," the commercial suggests, it is simply "saying hello;" for another it's "extra fraud protection," and a third points to "free checking without direct deposit."
While viewers may not realize it, Wachovia ($720 billion in assets) is publicizing its internal customer-segmentation philosophy. It's no coincidence that the Charlotte, N.C.-based bank, which is consistently ratedNo. 1 or No. 2 by J.D. Power and Associates (Westlake Village, Calif.) in customer experience among retail banks, also is rated No. 1 in organic growth. It's pretty clear that there's a strong correlation between the customer experience and growth. "Customer service is the best revenue strategy we have," says Wachovia CEO Ken Thompson.
Organic growth has always been something to be desired -- no bank has ever scoffed at the idea of increasing its deposits. But there always have been other ways to grow -- namely, mergers and acquisitions, which still are quite prevalent in banking. But while merging or acquiring a new bank is a surefire way for a financial institution to grow, shareholders look to organic growth as a means to long-term, sustainable profits, and banks are realizing that the higher their organic growth rates, the more shareholder value they create. >>
"Mergers and acquisitions are not necessarily slowing down," explains Rodney Nelsestuen, senior analyst in Needham, Mass.-based TowerGroup's financial strategies and IT investments cross-industry group. However, smaller organic growth -- and finding individual market segments to target -- is an emerging imperative for banks, he says.
Of course, technology is a significant enabler to organic growth. As banks seek new market segments to target, they're also looking at new ways in which their systems can improve the customer experience to increase share of wallet.
- Page 3: Segmentation: A Recipe for Organic Growth
- Page 4: A Deeper Understanding
- Page 5: As Usual, It Starts With Data