New financial customers are 3X more likely to leave—here’s how to keep them

Say you recently launched a campaign with an offer for a free balance transfer for new cardholders. Or perhaps it was a cash bonus offer for opening a new checking account. Then you saw a spike in acquisition—hooray! You succeeded in bringing in new business.

Or did you?

As it turns out, those newly acquired people didn’t turn into lifetime customers; they dropped out after a few months or never actually used the product.

Many banks struggle to onboard new customers, leading to high attrition rates. According to JD Power and Associates, new customers are nearly three times more likely to show attrition during the first 90 days of opening an account.

Fixing this problem starts with acquiring the right customers in the first place.

Financial institutions facing compliance issues typically resort to generalized, highly promotional digital marketing tactics. Unfortunately, this approach often attracts customers that are only looking to take advantage of the promotion. Naturally, they leave after they’ve gotten whatever perks they were after.

You will be more successful in the long run if you focus on the customer’s needs through each stage of their financial journey. It starts with acquiring the right, high-value accounts that are truly net new to your institution and in need of your solutions.

Learn more in our e-book: How to build a lifetime of financial loyalty - Digital marketing for all five stages of the customer lifecycle

Once you’ve mastered getting the right customers in the door, there’s also an art to engaging them through onboarding.

Omnichannel onboarding with identity management

According to The Financial Brand, customer satisfaction and cross-sell successes improve when customers are contacted 4-7 times in their first 90 days.

You’re probably pretty familiar with onboarding tactics like email and outbound calling—but reinforcing the onboarding process across multiple channels often leads to a 1.5–2x lift in results.

Imagine you’ve opened a new checking account, but you’ve yet to make any deposits. The bank sends you a few reminder emails, and you get a call from the branch noting the value of starting to make deposits to your account and how it complements other bank products. But then you also start seeing personalized display ads in your news app, on the blogs you read, and in the sidebars of your email platform—all reminding you to make a deposit.

You can achieve this consistent, omnichannel approach with a solid identity management strategy.

Identity management works by using digital profiles of real individuals that have had their personally identifiable information (like name, address, email address) removed.

This approach allows you to understand key signals and insights about real people (like online browsing behavior and transaction history) without directly tying this information to their real name, email address or direct mail address. You know who they are and where they like to hang out across their devices without ever compromising their personal information.

With the accurate and actionable insights you have at your fingertips through strong identity management, you can reach your newly acquired customers consistently across all their devices and channels. This helps you to further encourage them to make a first deposit, activate their new card or set up auto-pay for their mortgage.

Identity management in action

In our last post on customer acquisition, we met our friend Mason, a 22-year-old with a $50k annual salary who lives in Seattle. His anonymized profile indicates that he loves to travel, he frequently reads the news online and he checks the weather on his Android phone every morning.

Using his anonymized profile, a bank was able to identify him as a great prospect for a credit card with travel rewards—and deliver an offer for 2X travel rewards on his purchases. They reinforced these communications consistently with emails, digital ads on his favorite news sites and page takeover ads in his weather app. The bank’s efforts to connect with Mason worked. He applied for the co-branded travel card and was approved.

But now it’s been a few weeks, and he hasn’t activated the card yet.

Thanks to identity management and his anonymized profile, the bank is able to serve him new ads with messaging to activate his new card and start earning points today. Of course, they’ll appear in the channels he frequents—like his news app.

Consistently reaching Mason with relevant messaging in his preferred channels increases the likelihood of activation and creates stickiness over time.

You’ll be able to plug up that leaky bucket and claim real acquisition success once you’ve gotten your new customers like Mason to activate and engage through successful onboarding.

Identity management goes beyond onboarding to help you consistently connect with prospects and customers across the full financial lifecycle (while also balancing privacy protection).

See how to stop customer attrition, increase engagement and be a better financial partner to your customers over their lifetimes in our latest e-book: How to build a lifetime of financial loyalty—Digital marketing for all five stages of the customer lifecycle.