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: success stories

Saving CDs at risk with personalized outreach

SITUATION:

In the nineties, the market price for CDs had declined dramatically in just four years, going from 11% to around 3%.   Given this, a 60-year-old NC Thrift faced losing $10 million in double-digit-priced CD money over a four-month period if customers balked at rolling over into lower-priced CDs.

SOLUTION:

The lower rates were out of our hands, so the key was repositioning the existing CD product by adding new product features.   This included a new 18-month CD with a no-penalty withdrawal period at the end of successive 90-day periods. Each "at-risk" depositor got a personalized letter showing the current market conditions and (most importantly) a chart that showed all the current offerings from the competition along with the benefits of the new CD.

The letter not only sold the new CD but also cross-sold the bank's non-deposit alternatives, such as annuities and mutual funds. The direct mail campaign was created, produced and mailed in-house using Apple's functional equivalent of MCIF software, which the client didn't own. Reports were generated so that branch managers and selected CSRs could conduct personalized phone follow-ups.

RESULTS:

The bank kept 70% of the at-risk portfolio and the cost of money dropped about six basis points!