Businesses can no longer expect to build their brand through advertising alone. They need to create positive experiences for their customers. Banks and fintechs have been focused on enhancing and improving customer experience (CX) for decades, but these efforts are mostly focused on front-end acquisition and portfolio management. Positive CX needs to run throughout the entire organization, including negative customer actions, like missing a payment, resulting in a delinquent account.

Managing the customer journey and creating a positive customer experience shouldn’t end if a customer enters collections. After all, only a small percentage of customers that go delinquent actually charge-off and become customers you wouldn’t want.

So why do so many financial institutions rely on old system-generated letters that:

*lack the ability to leverage breakthrough creative,

*have no strong call to action,

*have no response device to make it easy for the customer to make a payment,

*don’t leverage any promotional offers, and

*only see their customers as numbers of days delinquent?

Many collections organizations have been too focused on ratcheting down costs. There needs to be a shift in focus from cost to revenue creation. Convergence Group engineers collections marketing direct mail which may cost a little more than a system-generated letter, but require only a fractional lift in dollars collected to break even, let alone generate incremental revenue. Our use cases have demonstrated that the incremental cost is easily recovered in the improvement in roll rates and reduction in charge-offs, not to mention the impact on overall customer satisfaction.

Our marketing transformation process uses sophisticated data analytics, strategic creative, carefully managed selection criteria, and end-to-end program execution. We help close the gap between brand promise and the customer experience. Rather than serve one party’s need to collect, a marketing orientation focuses on satisfying the other party’s (i.e., the debtor’s) needs. By identifying and leading with those behavioral drivers, collectors can connect with debtors in a whole different way, and generate better results, faster.

Call us at 302-234-4901 or email us for a free consultation. We can have a customized solution for your business that can be in market in just a few short weeks.

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Equation Marketing

by admin on June 14, 2021

Marketing and sales are the tip of the spear in any organization’s mission to grow or retain customers.

And whether you’re selling a commodity or highly differentiated product, marketing and sales are driven by demand. To enable a sustainable strategy and build enterprise value, you’ll need to find, win, keep and grow customers who create that demand.

There are a couple of frameworks than can help you align your organization around these principles. They include:

*The 4 P’s of marketing (product, pricing, promotion and physical distribution or place), a “push” approach.

*The value discipline model, which identifies three core areas of interest: product, service and operational efficiency/effectiveness. This is more of a “pull” approach. The idea is to exceed industry expectations in one value discipline while meeting the standard in the other two.

With both frameworks, the goals is to create breakthrough messaging that garners attention, motivates interest, creates desire, and results in a response based on a call to action.  Whether using a push or pull approach for advertising and promotion, the communication must be relevant to the audience.

These proven structures work well for small individually owned businesses and startups. But for larger organizations, the challenge is that they’re perceived as too narrow in their focus––making it difficult to align an entire company around traditional small-bore marketing models.

To meet the needs of larger organizations, Convergence Group created a more encompassing tool called Equation Marketing. It’s derived from the TUP model used within the package goods industry. The TUP model posits that volume is driven by three key metrics: trial rate, user rate and package rate. Rendered mathematically:

V = T x U x P

(Volume = Trial Rate x User Rate x Package Rate)

Convergence Group created Equation Marketing by widening the focus of the TUP framework. We identify drivers of profitability and align initiatives across an organization to focus on those drivers.

Using this formula, we can apply key metrics and critical success factors throughout an entire organization, focusing on sub-equations for specific departments or functions. Once the levers that drive initiatives are identified, management can prioritize them based on how much value each one contributes, compared to other initiatives, and how easily they can be implemented.

Here’s an example of how the Equation Marketing model might be deployed in the credit card industry. Note how the chart includes the specific sub-equations within the organization. The industry-specific terminology can easily be replaced with other, more relevant drivers.

This framework offers several benefits:

*Keeps the focus on process and customer treatments that drive earnings while promoting efficiency and effectiveness.

*Harmonizes human capital, providing a route map that enables people to see where they fit in to the larger picture and their relative contribution.

*Serves as a common language across the organization providing a unity of purpose and an understanding of progress.

*Infinitely adaptable across and within a wide range of industries and departments simply by defining key drivers appropriately.

Convergence Group’s Equation Marketing framework has helped many of our clients achieve impressive results.  Call us at 302.234.4901 or email us today to explore how we can help you.

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