How to Reduce Attrition and Retain Customers in the Age of Digital Banking—Part 1

This two-part post looks at the problem of financial institutions losing profitable customers and what can be done about it.

By Devon Kinkead, CEO and Founder, Micronotes

The only thing worse than losing a profitable customer is knowing that you’re systematically losing profitable customers! As an AI-driven marketing technology company focused on deepening customer relationships, it was a natural evolution for Micronotes to begin offering our customers propensity risk scoring. In short, here’s why is matters and how it works. 

It matters because it’s not uncommon to see between 8 and 10 percent of customers leave their bank or credit union in any given year—some fraction of which are profitable.  If it costs $300 to acquire a customer and less than half of those newly acquired customers are profitable, the replacement cost of a profitable customer is at least $600 and, in most cases, much higher. That said, it’s imperative to know which profitable customers are at risk of leaving and take decisive action to retain them!  

Customers who have direct deposit with a financial institution are much less likely to leave, so establishing a direct deposit relationship is a good first step. We discussed attrition risk at some length in this blog post.

Part two of the post delves into how Micronotes helps financial institutions retain customers at risk of attrition.