Driving checking acquisition with intelligent modeling

Business Challenge

Penn Community Bank is proud to be the largest mutual bank in eastern Pennsylvania but was looking for a strategy to grow both household and core deposit growth.

"As a community bank with nearly $3 billion in assets, we understand the strategic importance of data to help inform our customer acquisition strategy; so, to compete with national institutions with more in-house resources in the data category, we made the decision to seek out a strategic partner like Deluxe for industry-leading expertise,” said Bernard Tynes, chief experience and impact officer. “I truly do see Deluxe as an extension of my in-house marketing team.”

The bank recognized one of the keys to growth was one that integrated both strategic and tactical changes to compete with bigger banks. The primary focus: household checking account acquisition.

“Checking is an important hinge for the relationship-banking door,” said Tynes. “New checking accounts are a gateway to increased opportunities and core deposit growth with new households. In turn, they expand our access to customers who will participate in residential lending programs and other products, as well as be an entry bridge to business relationships. We knew we needed to cast a wider net to reach more diverse households, and yet compete smartly, efficiently and authentically to our bank’s rich legacy and brand.”

Deluxe Answers

Working with Deluxe, Penn Community Bank shifted to using a multi-cycle direct marketing approach focused on new-to-bank households. Deluxe’s proprietary model helped Penn Community Bank identify insights on a national level as well as internal historical consumer data. This ensured Penn Community Bank was reaching a diverse range of prospects. By identifying new prospects through data leveraging historical consumer behavior, Penn Community Bank was able to find consumers who live and work in the markets they serve, examine their footprint, and use the models to identify those most likely to respond to a direct marketing piece.

Deluxe’s plan helped to identify the ideal volume of prospects, including existing non-checking customers, within a self-educating model based on the bank's ever-evolving strategy that could dynamically adjust as learnings grew. As a result, the spend was focused on an extremely cost-efficient saturation of addresses by taking advantage of better postal rates.

Results

Deluxe has been working with Penn Community Bank to support their checking acquisition since 2018. The initial campaign was successful and resulted in a series of recommendations to make sure the next campaign was even more effective. This included adding an attention-grabbing incentive to the offer which was initially $250 ($200 for checking and $50 for savings) and has since increased to $350 ($300 for checking and $50 for savings). Deluxe does competitive scans every six months to ensure Penn Community Bank has a competitive offer in their market.

In addition, Tynes noted that ongoing evaluation and optimization have been key components of all programs and campaigns. “We actively leverage a/b testing and other modes of evaluation to assess our campaigns and measure performance in an increasingly crowded financial services market.”

Next, Deluxe suggested eliminating the personalization and incorporating “Dear Neighbor” to address prospects. This allowed the client to use bulk postal rates which significantly reduced campaign costs while, in Deluxe’s experience, not significantly affecting campaign response.

Finally, Deluxe and Penn Community Bank decided to shift the campaign to quarterly. Previously, Penn Community Bank only did one to two direct mail campaigns a year, but due to the effectiveness of this highly targeted campaign, they increased their frequency to four mailings to provide better coverage throughout the year.

The shift to multi-channel

In 2022, the team made the decision to test sending an email in addition to a direct mail piece with the hope it would provide additional lift to the overall campaign success. The bank now realizes even higher campaign performance with the email plus direct mail segment seeing an average lift of 26.1% over the DM only counterpart. In 2024, the team is adding a digital test segment where they will measure response for direct mail, direct mail+digital and direct mail+digital+email to understand the contribution and ROMI of each channel.

The measure of success

Prior to the partnership with Deluxe, Penn Community Bank did not have internal resources to evaluate KPIs to benchmark their acquisition programs. According to Tynes, “Deluxe created the benchmarks for us, and the best practices for measurement—lift over control, ROMI, incremental accounts and account profitability. Through these, we observed a very clear picture: this program for checking acquisition constituted measurable overall checking performance.”

Beyond the clear-sighted vision regarding future campaigns, valuable insight was gained as new customer behavior could be tracked post-campaign, with a line of sight to whether there was the opportunity to grow relationships through new money market accounts, loan products, or other long-term loyalty drivers.