The Profit Plan
Four Proven Strategies to Improve Your Profits!
The Problem…or an Opportunity?
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What if there are only a handful of profitable
account holders who are paying all our bills?
Who are these people, and what happens if they
leave?
Just how much money are we losing from our
least profitable account holders?
Are we selling our most profitable products or are
we just selling unprofitable products to
unprofitable account holders?
How can I even run this business, if I don’t even
know these things?
The Problem…or an Opportunity?
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You are not alone. The vast majority of financial
institution executives don’t know the answers to
these questions either. But you can know!
By knowing the answers to these questions you
will be ahead of your competition. You will
generate more profits with less effort than you
thought possible.
Building a solid foundation
Building a solid foundation
A profitability interface is needed to seamlessly integrate
these two sets of data with each other.
Building a solid foundation
Building a solid foundation
Profitability Components
Building a solid foundation
Balancing back to the general ledger
Building a solid foundation
Account-level profitability is the foundation!
Strategy #1 – Retain and deepen your relationships with
your most profitable account holders.
Strategy #1 – Retain and deepen your relationships with
your most profitable account holders.
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Knowing who your most profitable account holders
are is the most important step to implementing the
first strategy of your Profit Plan.
Strategy #1 – What percent of your profit do your most
profitable account holders generate?
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Typically, only 20-30% of your account holders are
generating all of your profits. The remaining 7080% of the account holders are a drain on your
financial institution’s resources.
The top 1% most profitable account holders can
generate over 50% of your profits.
Strategy #1 – What percent of your profit do your most
profitable account holders generate?
Strategy #1 – What percent of your profit do your most
profitable account holders generate?
Strategy #1 – Account Holder Grades
Strategy #1 – Average Length of Relationship
Strategy #1 – Lifetime Value of Account Holder
Strategy #1 – The CEO Heart Attack Graph
Strategy #1 – Top 1% Most Profitable Account Holders
Strategy #1 – Assigning Personal Bankers
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Retaining your most profitable account holders is
the key to successfully implementing your Profit
Plan!
Deepening relationships with your most profitable
account holders is the most profitable strategy you
can implement! This is your lowest hanging fruit.
This involves one-on-one marketing and old
school “leather on the street”. It is the least
efficient way to market your products, but it is the
most effective way of generating additional profits.
Strategy #1 – Account Holder Profitability
Strategy #1 – Account Holder Profitability
Strategy #1 – Account Holder Profitability
Strategy #1 – Relationship Pricing
Strategy #1 – Measuring The Results
Strategy #2 – Add more account holders who look like
your most profitable account holders.
Strategy #2 – Using Demographic Data
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Age
Household Income
Net Worth
Marital Status
Presence of Children
Homeowner Renter
Home Market Value
Likely Investors
Strategy #2 – Using Demographic Data
Strategy #2 – Using Demographic Data
Strategy #4 – Households who have a mortgage with you, but do
not have a home equity loan, have an income greater than
$30,000, and have children!
Strategy #3 – Determine your most profitable products.
Strategy #3 – Determine your most profitable products.
Strategy #3 – Determine your most profitable products.
Strategy #3 – Determine your most profitable products.
Strategy #4 – Cross sell your least profitable account holders your
most profitable products so they become more profitable.
Strategy #4 – Cross sell your least profitable account holders your
most profitable products so they become more profitable.
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This involves targeted marketing to thousands of
account holders.
This marketing strategy is very efficient, but it is
also very ineffective.
However, it is quite common to have an ROI over
100% when using these very targeted marketing
campaigns to sell your most profitable products.
Strategy #2 – Unprofitable households with low balances and a
high net worth.
These are the best customers at another financial institution!
Implement Your Profit Plan!
Implement Your Profit Plan!
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The best way to implement your Profit Plan is to
use a good profitability software system that can
provide a strong foundation to support all four
proven strategies to increase your profits.
Is it:
 Easy to use?
 Easy to install?
 Easy to maintain?
 Easy to distribute?
 Easy to integrate?
For More Information
Gene Palm: President / COO
E-mail: [email protected]
Website: www.profitres.com
Work Phone: (863) 686-4385
Cell Phone: (863) 608-6602
The Profit Plan
Four Proven Strategies to Improve Your Profits!