I’m going to share something with you that many financial institutions pay thousands of dollars in research to learn: the first quarter is the best quarter to market deposit accounts. It’s also the most common time of year for people to switch their financial institution. Instead of sending you an invoice and not telling you more unless you pay me exorbitant sums of money, I’ll share the common-sense rationale behind this trend.
1. New Year’s Resolutions
Getting a handle on finances is consistently a resolution people make at the beginning of each year. Whether that means saving more money or cutting unnecessary expenses, this is where all financial institutions have an opportunity to demonstrate how they’re different.
2. Post-Holiday Timing
If the first quarter is the best time for deposits, then the fourth quarter is the worst. Any extra money people have during this time goes to holiday presents, preparations and travel, or property and real estate taxes. After the holidays, surplus money starts to become more available for long-term savings, such as a certificate of deposit or money market account.
3. Taxes
For people lucky enough to get a refund on their tax returns, this is an opportunity to funnel that cash into a savings account for a rainy day—a move that is especially savvy in today’s economic climate.
4. Bookkeeping Purposes
This one is tied to #1 somewhat, since another top resolution is to be more organized. People prefer to make changes, including financial changes, at the beginning of the year instead of mid-year or at year-end.
With so many people potentially making a financial institution switch or bringing more money to put on deposit, it’s important to grab a piece of the pie. Whether that means keeping the customers you currently have, or making sure people switch to your institution, here are some successful promotional ideas.
1. Make It Easy To Switch.
When doing surveys for financial institutions, I like to ask people why they selected and continue to use their primary financial institution. Besides the popular “It’s close to my home” or “It’s close to my work,” the top reason is “I’ve been using them for years.” So the reason people choose their financial institution is because they’ve been using it for a long time? While it’s easy to poke holes in that logic, most of your new customers will come from another financial institution, probably one they’ve been using for years.
Many financial institutions have developed and had success with a “switch kit” that gives new customers a step-by-step guide to switching their accounts over to the new institution. Some banks and credit unions even fill out the forms for them. Given my past survey findings, that’s not a bad idea.
2. Give Them A Reason To Stay.
The easiest way is to pad their wallet.
Pay people for their loyalty. That can mean an aggressively low loan rate, a generously high dividend rate or a bundle of free convenience services. Another route is to show your customers or members how much money your financial institution is saving them. Once customers are faced with these savings, it would seem silly to go anywhere else.
3. Play The Role Of Friend, Not Enemy.
With all the horror stories of poor customer service, it’s easy to make your financial institution look like the Bert to your customer’s Ernie. However, with the beating the financial industry has taken in the media, it’s important to go above and beyond for the customer in today’s economy. This can be achieved broadly and on a one-on-one basis.
In broad terms, don’t nickel and dime your customers. It’s a good idea to review your fees periodically to ensure your bank or credit union is charging what constitutes a necessary expense, not greed. On a personal level, work with your customers to make sure they are making the best of their financial situation. That can mean holding seminars on buying a car or identity theft. Or, for people who are struggling with making ends meet, offer to help them make a plan for meeting those expenses.
Hopefully, I’ve given some insight on this particular deposit trend. Now take all the money I’ve saved you in research and use it to grab those deposits!
