In a big shift from a few years ago, deposits are again coveted by most banks. For a while, many banks were so flush with cash they actually turned away customers who had large sums of money to deposit. But today loan demand is up and other investments are competing for those deposit dollars. Note the Dow Jones Industrial Average recently topped 23,000.
Strategies for increasing deposits include paying more, and some banks even consider acquisitions. But if you are looking for a way to build both customer relationships and deposit balances, then consider starting a bank club.
The concept has been around for decades. Create a club among your customers for people who like to travel and participate in group events. Tie the club to a special savings or checking account. There is no better way to build a relationship than to share an experience with someone, and there is no better experience for building relationships than travel.
People are more likely to stick with their bank if it offers them an opportunity for social fulfillment. Trips also can be an opportunity for bank staff to get to know customers on a whole new level.
These clubs are an effective deposit gathering strategy. Banks all over the country have these clubs, although some went dormant in the years following the crisis. Now’s the time to revitalize these clubs. Many of them are aimed at baby boomers who are entering the ranks of retirement at a rate of some 10,000 per day. People are living longer and are healthier than ever; many of them are looking for social experiences. A well-run bank club can provide those experiences.
One of the more successful clubs is run by Valerie Kelsey at D.L. Evans Bank in Idaho. She told me her club is a magnet for widows between the ages of 60 and 75 years old. They want to travel, but not alone, so they sign up for her club and participate in many of its trips. They bring their deposit dollars with them to the bank. Kelsey told me that for the last five years running she is able to trace an
8 to 12 percent growth in bank deposits tied to club members. Kelsey, who heads a peer group for bank club directors, said she is seeing revitalization in such clubs across the country.
Technology will continue to grow in importance but while people appreciate convenience, they really want connections. A bank club is a powerful, business-building opportunity to make those connections.