Retention Guirdelines Final 121214 v04_C

8/12/2019 Retention Guirdelines Final 121214 v04_C

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Retention Guidelines

How to keep your targetcustomers

December 2012Team X (*Banking Team Of Client X)


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Introduction 2

1. Retention on product and customer level 5

2. Retention on payroll agreement level 82

Summary 97

Agenda



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Introduction

Introduction

This presentation is based on ....

List of contributors:

Prepared by: , Mass Banking

Revised by: , , , , ,

Pa e No. 3

(a short introduction about purpose of the report tobe added)


General information about the report


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Introduction

1.1 Attrition measurement

1.2 Retention event

1.3 Retention activity

1.4 Retention concept1.5 Retention case

1.6 Retention organization

1.7 Retention process

1.8 Retention offer

1.9 Incentive scheme

1.10 Performance indicators

1.11 Retention activity testing

1.12 Building retention step-by-step

2.1 Retention events, retention

concept

2.2 Retention case

2.3 Retention activity elements:

organization, process, retention

offer, incentive

1. Retention on product and customer level


Tracker will guide you through the whole presentation

2. Retention on payroll

agreement level


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Introduction 2



Summary 97

Agenda



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Agenda

Pa e No. 6

Introduction and background 2

1. Retention on product and customer level5

1.1 Attrition measurement 6

1.2 Retention event 15

1.3 Retention activity 18

1.4 Retention concept 30

1.5 Retention case 36

1.6 Retention organization 39

1.7 Retention process 45

1.8 Retention offer 57

1.9 Incentive scheme 66

1.10 Performance indicators 71

1.11 Retention activity testing 76

1.12 Building retention step-by-step 80


Summary 97



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1 1 Att iti t


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customer initiated product closure bank initiated product closure, eg:

due to customer long-term inactivity

long-term negative balance on CA or a balance lower than the minimumrequired balance

due to customer delinquency

other breach of terms and conditions

Theattrition rate should be further split between voluntary and involuntary.


Formula for recalculation to annual rate

Please note that this formulais not applicable for attritionat the vintage level

Voluntary attrition: Involuntary attrition:

# of closed accounts in calendar month# of accounts at the beginning of a month

Annual attrition rate iscalculated as:*12 monthly

attrition rate*12

1. Retention on product and customer level1.1 Attrition measurement

1 1 Att iti t


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Vintage refers to theproductunits/customers

opened/acquired in acertain month, quarter,

year or other period.The vintage may be

further specified byother criteria

Definition of the vintage:


Attrition measured atthe vintage level represents another approach to attritionmeasurement.

A) Attrition rate in period (calendar month, quarter, year)

product units closed to date

BOP units of particular vintage

downgrades to date which were primary BOP

BOP customers of particular vintage

III. Attrition rate measured at the vintage level:

IV. Downgrade rate measured at the vintage level:

For recalculation to annual rate: divide

the rate by the number of months sincebeginning of period (or to date) andmultiply by 12 months



1 1 Attrition measurement


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Attrition rate measurement examples.


Month onbook

(MOB)

BOPaccounts

Closedaccounts

EOPaccounts

Attritionrate p.m.

Attrition rateannualized

Attritionmeasuredon vintage

Attritionmeasuredon vintageannualized

1 1,000 5 995 0.5% 6.0% 0.5% 6.0%

2 995 7 988 0.7% 8.4% 1.2% 7.2%

3 988 5 983 0.5% 6.1% 1.7% 6.8%

4 983 5 978 0.5% 6.1% 2.2% 6.6%

5 978 3 975 0.3% 3.7% 2.5% 6.0%

6 975 1 974 0.1% 1.2% 2.6% 5.2%

7 974 1 973 0.1% 1.2% 2.7% 4.6%

8 973 1 972 0.1% 1.2% 2.8% 4.2%

9 972 1 971 0.1% 1.2% 2.9% 3.9%

10 971 1 970 0.1% 1.2% 3.0% 3.6%

11 970 1 969 0.1% 1.2% 3.1% 3.4%

12 969 1 968 0.1% 1.2% 3.2% 3.2%

Example of attrition rate calculation

See attrition curves on the following slideillustrating the difference between theattrition rate per month and attrition

measured at the vintage level

Source: Client X mock data for il lustration




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Attrition curves examples illustrate the difference between the attrition rate per month andthe attrition rate measured at the vintage level.


Attritionrateper month

0.1%

0.3%

0.1%0.1%

0.5%0.5%

0.1% 0.1%

0.5%0.7%

0.1%0.1%

995988 983

978 975 974 973 972 971 970 969

1,000

321 4

BOPaccs

1,000

990

980

970

960

950 MOB12111098765

Attrition rate permonth measured onvintage

3.2%3.1%3.0%2.9%2.8%2.7%2.6%2.5%2.2%

1.7%

1.2%

0.5%

57

5 53

1 1 1 1 1 1 100

5

10

5 64321 121110987

512 17

22 2526 27 28 29 30

31 320

0

20

40

1 12111098765432

Closed accounts

Closed accountscumulative

As attrition rate measured byvintage is calculated from

the number of closedaccounts to date divided byBOP accounts of the

particular vintage (here1000)

Attrition rate is higher in thefirst months and then

decreases





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Product units/relationships lost should be analyzed to understand the character of thecustomers and/or product units lost. Dimensions to consider when analyzing the character

of lost units/relationships include...



Customersegment

Product provided at standard rate vs discounted rate

R

egion

Deposit/assetbalance

rangeTransactionsrange GI range

MOB Other




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1


Analysis of attrition/downgrade reason - 2 illustrative examples.


15,1%

Customer segments

Pensioners

5,0%

2,7%

2,5%

Premium

6,2%

12,1%

12,2%

6,3%

Student

10,2%

4,0%

Affluent

12,5%

1,4% 2,3%

7,7%

Mass

3,2%

10,2%

12,5%

Mass

1,6%2,0%

4,5%

6,3%

12,1%

Student

1,7%2,5%

Customer segments

6,1%

15,1%

1,3%

8,2%

5,3%

12,2%

Affluent

2,8%

1,6%

Pensioners

2,2%2,5%

2,7%

Premium

1,2%4,2%

6,3%

7,7%

4,0%

7-15 yrs.

15+

0-6 yrs. 41

3

2 5+

Attrition rate annualized for differentcustomer segments in relation to MOB

Attrition rate annualized for differentcustomer segments in relation to

Product penetration2

Month on book (MOB): Product penetration:In all segments exceptPensioners, the highestattrition rate belongs tocustomers that have been

with the bank for less than 6years

In all segments, the attrition

rate decreases with theincreasing number ofproducts

Source: Client X mock data for illustration




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4. Include attrition rates in regular management reporting (refer to theexample of Primary Banking KPIs dashboard)


Remember six basic steps essential for attrition measurement.


1. Measure monthly/annualized product attrition rate

2. Measure regularly attrition rate on vintage level

3. Measure monthly/annualized attrition rate of relationship: downgradefrom primary and downgrade to inactive

5. Analyze the characteristics of the products/customers lost

Key takeawaysArea

Attritionmeasurement

6. Set objectives for attrition rate/s targeted



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Agenda

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Summary 97


1.2 Retention event


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1.2 Retention event

product closurerequest

productmaturity

other event indicating a highprobability that a customer

will become non-primary orinactive

Retentionevent

Retentionactivitytriggers

A retention event is triggered by a product closure request, product maturity or an event

indicating a high probability that a customer will become non-primary or inactive duringa defined period.


1. Retention on product and customer level1.2 Retention event

1.2 Retention event


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Example

. e e o e e

Type of retention event

Current account (CA), CA + Debit card (DC), package closure request

Credit card (CC) or Overdraft (OD) closure request

Direct debit (DD), all customers direct debits, cancellation request if a DD

A service/channel closure request (eg mobile banking, internet banking,SMS notifications/alerts, debit card)

1. Open-end product closure request

3. Normal product maturity*

5. Early warning for a payroll agreement

4. Inactivity (downgrade from primary)

6. Request to terminate payroll contract

2. Closed-end product: full early repayment Personal loan, mortgage full early repayment request

Most common examples of retention events can be split into six main categories. Not all ofthem need trigger retention activity in practice.

Term deposit (TD) without roll-over maturity

Personal loan (PL) last installment paid

CC/DC plastic validity expiration and new plastic not picked up

Income domicile termination: Salary/pension inflow termination, or Incomeproxy inflow termination

Outgoing transactional activity termination on all customers CAs

Outgoing transactional activity termination on CC

Indication by Corp/SME relationship manager or branch manager of aserious change in the corporate relationship

* Product maturity events may trigger x-sell/up-sell activity (e.g. PL top-up, new TD opening), not subject for these guide lines

1. Retention on product and customer level1.2 Retention event


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Agenda

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Summary 97




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y

A)

Retention activity is triggered by a retention event and is composed of four elements.

product closure

request

productmaturity

other event indicating a highprobability that a customer willbecome non-primary or inactive

Retentionevent



1. Organization,Management

(1.6)

2. Retentionprocess

(1.7)

3. Retentionoffer (1.8)

4. Incentivescheme

(1.9)

4 elements of retention activity

1. Retention on product and customer level1.3 Retention activity



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Retention activity P/L (Profit & Loss) calculates an incremental estimated financial

contribution from retention activity in a specific period of time

The incremental contribution should be calculated per single retention case

and for the total retained portfolio

A P/L should be completed for each new retention activity

The cost of the retention offer must justify an increase in the retention success rate; thus,it must have a positive impact on the P/L

The P/L should be validated by controlling and updated periodically based on actualresults

For as-is retention activities, the P/L needs to be updated regularly to monitor if activitystill generates positive P/L

A)

A

The business impact must be calculated before a new retention activity is introduced.Ongoing activity should be validated as well.


Retention activity emerges from retention event. It has four componentsthat need to be addressedmanagement & organization, retentionprocess, retention offer and incentive schemeDefine activity

Analyze impacton P/L

Implement

1

2

3After the evaluation of the impact of the retention activity on the P/L, the

retention activity can be introduced




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Retention activity P/L illustrative example - reactive activity.The illustrative example is based on the inputs and assumptions as stated below. The inputsand assumptions are different for each branch.


INPUTS

Beginning of period (BOP) accounts500,000

New accounts/month5,000

Attrition rate p.m. (average)1%

Income/account (per month)EUR 12.50

Cost to process retention caseEUR2.50

Cost per saved accountEUR 5.00

Standard unit cost (CA+DC / package)EUR 2.50

Model period36 months

% of accounts eligible for retention90%

retention success rate (%)10%

% from average income per account of savedvintage:

MOB 112 - 75%(in the1st 12Ms after retention)

MOB 1336 - 100%Attrition p.m. on saved accounts vintage:

MOB 110%

MOB 25%

MOB 32.5%

MOB 41%

MOB 5-360.5%

ASSUMPTIONS





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Retention activity P/L illustrative example (reactive activity)explanation of key terms.


Income/account (per month) = average income per customer in the period (e.g. up to 3 months) preceding theclosure request (should be calculated on a vintage of customers with closure request)

Cost to process retention case = average cost of communication (e.g. telephone bills) + allocation of fixed costdriven by FTE capacity needed to execute retention process and by type of FTEs needed

Cost per saved account = average direct costs resulting from any retention offer accepted if this offer drives a cost(e.g. spend end get offer or cash back offer) + allocation of average fixed cost needed for execution ofprocesses essential for retention offer fulfillment (e.g. set-up of an offer in the system, monitoring of offer condition,accounting) + average incentive paid per saved account

Attrition p.m. on saved accounts vintage = accounts left in a month from a saved accounts vintage

% from average income per account of saved vintage = percentage which shows how much lower is theaverage income per account after retention due to retention offer accepted by customer. It may be assumedthat after a retention offer expires, the average income per account will get back to income as received beforeretention.

GLOSSARY




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208

0

50

100

150

200

250

Incremental margin

127

Cost of retention

incl.standard unit cost

-81

Income/saved

account

Incremental margin per single retainedaccount in first 12 months

93

0

20

40

60

80

100

Incremental margin

36

Cost of retention


-57

Income/saved

account

EUR

Incremental margin per single retainedaccount in 1-24 months

EUR

Retention activity P/L performed just for a single account should always be positive, even inthe first 12 months.


Retention activity P/L illustrative example (reactive activity)incremental margin per retained account

Income per savedaccount (EUR)

Cost of retention incl.standard cost (EUR)

Incremental margin(EUR)

Period of time

1-12 months 93 - 57 36

1-24 months 208 - 81 127

1-36 months 316 - 102 214





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600

400200

Cost of retention


522

Incremental margin

0

1,200

1,000

1,115

-593

Income/saved

portfolio

800

275300

250

200

150

10050

0

Incremental margin

42

Cost of retention


-233

Income/saved

portfolio

Ths EUR


Incremental margin for total retainedportfolio in 1-24 months

Ths EUR

This is space for the action title which summarizes the message of the whole slide.Action title can be longer than one line

Incremental margin for total retainedportfolio in first 12 months

Retention activity P/L illustrative example (reactive activity)After the second year of retention activity, the cost per portfolio of retention will multiply by2.5 in comparison to the end of the first year. However, the incremental margin will increase

more than 12 times.

Retention activity P/L illustrative example (reactive activity)incremental margin from retained portfolio

Income per savedportfolio (Ths EUR)

Cost of retention incl.

standard cost

(Ths EUR)

Incremental margin(Ths EUR)

Period of time

1-12 months 275 - 233 42

1-24 months 1,115 - 593 522

1-36 months 2,556 -1,074 1,482





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Retention activity P/L illustrative example - preventive activity.The illustrative example is based on the inputs and assumptions as stated below.


INPUTS

BOP primary customers200,000

BOP non-primary customers300,000

New primary customers (from acquisition)2 500

New non-primary customers (from acquisition)2 500

Total downgrade rate p.m.2.0%

Total upgrade rate p.m.0.25%

Attrition rate p.m. (non-primary)2.5%

Income/primary customer (per month)EUR 18.00

Cost to process retention caseEUR 2.00

Cost per upgraded customerEUR 2.50

Standard unit cost (CA+DC / package)EUR 2.50

Model period36 months

% of customers targeted to upgrade100%

upgrade success rate (%)20%

% of income non-primary/primary50%

% from average income per primary customer of

upgraded vintage:

MOB 112 - 75% (in 1st 12Ms after retention)

MOB 1336 - 100%

Downgrade p.m. on upgraded vintage

MOB 110%

MOB 25%

MOB 32.5%

MOB 41%

MOB 5-360.5%

ASSUMPTIONS





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Retention activity P/L illustrative example (preventive activity)explanation of key terms.


Income/primary customer (per month) = average income per primary customer in the period (eg up to 3 months)

preceding the downgrade moment Cost to process retention case = average cost of communication (eg telephone bills) + allocation of fixed cost

driven by FTE capacity needed to execute retention process and by type of FTEs needed

Cost per upgraded customer = average direct costs resulted from any retention offer accepted if any offer drives acost (eg spend end get offer or cash back offer) + allocation of average fixed cost needed for the execution ofprocesses essential for the fulfillment of the retention offer eg setting up an offer in the system, monitoring the offer

conditions, accounting) + average incentive paid per saved account

Downgrade p.m. on upgraded vintage = downgraded customers in a month from the upgraded vintage

% of the average income per primary customer of the upgraded vintage =percentage showing how much lowerthe average income/customer is after the downgrade due to the upgrade offer accepted by the customer

Total downgrade rate p.m. = % non-primary customers EOP that were primary customers BOP to total primarycustomers BOP

Total upgrade rate p.m.= % of non-primary customers after downgrade which self-upgraded spontaneously -without retention campaign

Upgrade success rate = % of upgraded customers at the end of the month after the month in which the retentionactivity was executed (includes accounts that would naturally self-upgrade anyway)

% of income non-primary/primary= average income per non-primary customer to average income from primarycustomer

GLOSSARY




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299

74

0

50

100

150

200

250

300

Incremental

margin

Income after

downgrade

-165

Cost of

retention incl.

standard unit

costs

-60

Income after

upgrade

Incremental margin per singleupgraded customer in first 12 months

133

30

20

40

60

80

100

120

140

Incremental

margin

Income after

downgrade

-93

Cost of retention

incl. standard

unit costs

-37

Income after

upgrade

EUR


Incremental margin per single upgradedcustomer in 1-24 months

EUR

When calculating the incremental margin of preventive retention activity, we deduct theincome received after the moment of retention event because this income would be

received regardless of the retention activity.


Retention activity P/L illustrative example (preventive activity)incremental margin per upgraded customer

Income after upgrade

(EUR) Cost of retention (EUR)Income after

downgrade (EUR)

Incremental margin

(EUR)

Period of time

1-12 months 133 - 37 - 93 3

1-24 months 299 - 60 - 165 74

1-36 months 455 - 82 -220 153





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2,7793,000

2,500

2,000

1,500

1,000

500

0

Incremental

margin

470

Income after

downgrade

-1,604

Cost of

retention incl.

standard unit

costs

-705

Income after

upgrade

800

600

400

200

0

-200

Incremental

margin

-11

Income after

downgrade

-460

Cost of retention

incl. standard

unit costs

-246

Income after

upgrade

695




Retention activity P/L illustrative example (reactive activity)It is acceptable for the P/L on retention activity at the portfolio level to be negative in the first12 months. This is due to the time shift between the cost of retention spend immediately andincome from customers received gradually.

Incremental margin for total upgradedportfolio in 1-24 months

Incremental margin for total upgradedportfolio in first 12 months

Ths EUR Ths EUR

Retention activity P/L illustrative example (preventive activity)incremental margin from upgraded customers portfolio

Income after upgrade

(Ths EUR)

Cost of retention

(Ths EUR)

Income after

downgrade ( Ths EUR)

Incremental margin

(Ths EUR)

Period of time

1-12 months 695 - 246 -460 -11

1-24 months 2,779 -705 -1,604 470

1-36 months 6,295 - 1,358 - 3,248 1,689


1. Retention on product and customer leve1.3 Retention activity



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Use the retention P/L template to calculate theimpact of each retention activity on P/L andupdate it regularly.


A

1. Use the retention P/L template to calculate the P/L for theapproval of each new retention activity before its launch

2. Update the template after the testing/pilot/launch of the retentionactivity

3. Regularly validate if certain retention activity continuously generatesa positive expected financial contribution

Key takeaways

Retentionactivity

Area


Agenda


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Agenda

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Summary 97


1.4 Retention conceptThe retention concept defines the NWBs retention strategy thus specifies which retention


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The retention concept defines the NWB s retentionstrategy, thus specifies which retentionevents will and which will not trigger a retention activity and the character of that retentionactivity.

A)

Text

Retentionevent C

product closurerequest

productmaturity

other event indicating ahigh probability that a

customer will become non-primary or inactive

triggers

Retentionactivity 3

Retentionactivity 2

Retentionactivity 1

Retentionevent B

Retentionevent A

The retention concept linksconcrete retention activity/ies withcertain retention event/s

The NWB can operate one or moredifferent retention activities for one or moredifferent retention events

Retention concept

triggers

triggers

1. Retention on product and customer level1.4 Retention concept

1.4 Retention conceptBased on various types of retention event retention activities can be split between


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A


Based on various types of retention event, retention activities can be split between

re-active and preventive.

...is a priority toimplement

Open-end product closure request

Closed-end product full early repayment request

Before a product maturity

At the moment of downgrade from primary

Examples of different types of events for which re-activeor preventive retention activity should be realized

...should betested first

2. PREVENTIVEretentionactivity

1. REACTIVEretention

activity


1.4 Retention concept


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Recommended

RecommendedOptionalOptional

Optional


The recommended retention concept should primarily focus on reactive retention activitiesaddressing CA, CA+DC, package closure and CC closure events.

CA, CA+DC, package closure requestCC closure requestOD closure request

Direct debit (all customers DDs) cancellation request

A service/channel closure request

2) Close-end product earlyrepayment

1) Open-end productclosure request

3) Product maturity

4) Downgrade from primary

5) Early warning

Example Status

Personal loan, mortgage full early repayment request

Retention event type

Optional

High

Low

Priority

Reactive retention activities triggers (should be addressed with priority):

Preventive retention activities triggers:

6) Request to terminatepayroll agreement contract

TD without roll-over maturity

PL repayment

DC/CC plastic validity expiration, new plastic notpicked up

Transactional activity termination on CC

Income domicile and/or termination of transactionactivity in all of the customers CAs

Optional

Optional

To be tested

RecommendedTo be tested

Optional means that NWB can

decide about the roll-out of theactivity or even about if the

activity goes to the test phase



h d h il i ? 1 R t ti d t d t l l


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A)


What does the piloting process mean?

Retention activity piloting is the process for thelaunching of new retention activity...

...in a controlled way...

....for a definite period of time...

...to verify the assumptions of retentionactivity P/L...

....before the decision is made on

whether to roll out the activity asthe business as usual process ornot



Th fi t t f th t ti t i li ti t f th l l k t diti 1 Retention on product and customer leve


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A


Thefirst step of the retention concept is a realisticassessment of the local market conditions.

1.Define the retention concept appropriate for the local situation

2. Begin with the implementation of retention activities for eventsmarked as recommended (CA, CA+DC,CC closure request,package closure request)

3. Pilotone or more options of a retention activity for events marked asto test

4. Do not forget that each retention activity is subject toapproval basedon positive retention activity P/L

Key takeaways

Retentionconcept

Area

1. Retention on product and customer leve1.4 Retention concept

Agenda


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Agenda

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Summary 97


1.5 Retention caseA retention case results from the identification of a retention event for a particular customer

1 Retention on product and customer level


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pat a certain point in time.


Re-active retention

In the case ofreactive retention, the retention process forall eligible cases should be executed

Mortgagefull early

repaymentrequest

CC closurerequest

CA+DCclosure

request

Retention cases

Forpreventive retention (eg cases originated based on theevent downgrade from primary, cases when a product is

coming due) onlyselected cases can be targeted : thosewith an estimated higher probability of relationshipdowngrade (propensity models may be used here beingaware of their reliability limitations).

Examples of attributes that may be used for selection rules:

Customer delinquency (Days past due),Gross income (GI)/customer,

MOB,

GI/customer drivers: product penetration ratios,balance/customer (split by type), transactional

activity.

Transactionalactivity

termination onCC

CC plasticvalidity

expiration

PLrepayment

Retention case

Preventive retention

1. Retention on product and customer level1.5 Retention case

1.5 Retention case

Address all re-active cases and selected preventive cases based on selection rules 1. Retention on product and customer level


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Address all re active cases and selected preventive cases based on selection rules.


1. Preventive retention activities should be designed andexecuted continuously as standard CRM campaigns, with specialfocus on how each retention event/campaign is built in the entirecampaign portfolio (ie their prioritization, and rules regarding thecontact policy)

2. In the case of preventive retention, develop and continuouslyimprove the selection rules to improve the retention processsefficiency. Thus, do not initiate a retention process for cases/customersthat would self-upgrade

Key takeawaysArea

Retentioncase

1. Retention on product and customer level1.5 Retention case

Agenda


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g

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Summary 97


1.6 Retention organizationRetention organization specifies where a retention case is handled. The person responsiblef th ti f th t ti f i f th f d t th R t ti

1. Retention on product and customer level


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for the execution of the retention process for a case is further referred to the RetentionPerson.


product closure

request

productmaturity


Retentionevent



(1.6)

2. Retentionprocess

(1.7)

3. Retention

offer (1.8)

4. Incentivescheme

(1.9)



(1.6)

2. Retentionprocess

(1.7)

3. Retention

offer (1.8)

4. Incentivescheme

(1.9)



1.6 Retention organizationThere are two ways how retention organization can be organizedcentralized or

i i i1. Retention on product and customer level1 6 R t ti i ti


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The execution of the retentionprocess is done by a branch person

The branch person can differ inbranches, eg relationship manager,banker

There can be certain specializationdefined by branch managers within

the branch

decentralized organization.


Centralized organizationtheexecution of the retention process is

done by a member of a centralizedretention team/unit

The retention team/unit is oftenorganized within the call center

Centralized organization Decentralized organization

NWB

Call Centre

Retention unit

NWB

Branch 1 Branch 2 Branch 3

Relationshipmanager Banker

Relationshipmanager


1.6 Retention organizationAdvantages of centralized organization are disadvantages for decentralized organization

d i1. Retention on product and customer level1 6 R t ti i ti


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Uncontrollable

Complicated distributionof retention cases

Lack of specialized training

Lack of capacityto handle all retention cases on time

Inflexibility

Tracking of results more difficult

and vice versa.


Controllable in terms of performance and quality

Simple distributionof retention cases

Specialized(standardized quality, training)

Capacityto handle all retention cases on time

Flexibility(manageable capacity,

simple/quicker/lower cost of retention processchange)

High motivation (a special incentive schemepossible)

PROS of centralizedorganization

PROS of decentralizedorganization

CONS of centralizedorganization

CONS of decentralizedorganization

No direct cost impacting P/L

No technology support required

Very good customer knowledge (eg in comparison tocall center unit)

Ownership of relationship

Timing of interaction (more immediate)

Direct cost (if the save rate is expected to be

low, than the P/L will be tight)

Requiressufficient volume

Requires technology support to receiveretention cases from all the channels (branches,

post box, call center) in t imely manner

Lack of customer knowledge (in certain cases)in comparison to branch person

No real ownership of the customer relationship


1.6 Retention organizationBased on the retention concept defined, there can be different approaches to retentionorganizations used for different retention events

1. Retention on product and customer level1 6 Retention organization


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organizations used for different retention events.


For a small number of retention cases and/or unequalinflow of retention cases in time, the centralizedorganization design needs to be set accordingly.

It is recommended that a centralized organization be usedto handle re-active retention cases of more complexproducts or processes(eg CC closure request, CC activitytermination, downgrade from primary).

Decentralized organizations are best used for retentioncases with a lower complexity where an immediate re-action is required such as after the submission of a productclosure request or full early repayment of loan, or ifpersonal relationship is beneficial.

From a P/L perspective, building a centralized retentionorganization brings directly attributable costs incomparison to using existing staff in branches. The retentionorganization type will have a significant impact on cost perretention case as well as retention efficiency.

Retentionevent B

Retentionevent C

Retention

event A

Retention concept

Remember that...


1.6 Retention organizationThe decision on a centralized or decentralized organization for each retention activity should

be based on variety of factors1. Retention on product and customer leve1 6 Retention organization


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44

be based on variety of factors.


1. Decide for centralized or decentralized organization for eachretention activity based on retention activity P/L reflecting:

Key takeawaysArea

Retentionorganization

timeliness required

complexity of retention cases handled

regularity/irregularity and the number of retentioncases over time

channels through which the customer can submit aclosure request, eg if multiple channels available

than a centralized organization is advantageous

impact on P/L

2. Ensure both FTE capacity and capability to handle all retentioncases on time. For reactive retention cases, this means finishing

the retention process for all cases in the period between theproduct closure request and the moment that the product has tobe closed according to the terms & conditions/by law


Agenda


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Summary 97


1.7 Retention processThe second element of retention activity is the retention process. It is realized for eachretention case

1. Retention on product and customer level1.7 Retention process


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46

retention case.


product closure

request

productmaturity


Retentionevent



(1.6)

2. Retentionprocess

(1.7)

3. Retention

offer (1.8)

4. Incentivescheme

(1.9)


p

1.7 Retention processFor the purpose of these guidelines, a retention process is the set of steps beginning with the

handover/acquisition of the retention case by the Retention Person and its completion by the1. Retention on product and customer level1.7 Retention process


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4747Deloitte PowerPoint timesaver

Retention process flow chart


end of the interaction with the customer (either over the phone or in branch).

Customer

Firstcontactperson

RetentionPerson

Retentionprocessinitiation

Investigateand record

attritionreason

Retentionevent

Retentioncase hand-

over

Checkcustomer

relationshipvalue

(recommended)

Product

closurerequest

submission

Re-sellproduct/relati

onshipbenefits

EndAccept?

YES

NO

Give 1stretention

offer

Give 2ndretention

offer

Accept?

YES

NO

Accept?

YES

NO

The retention case is distributed to the

Retention Person when the customercontacts the bank through a channelother than the Retention Person

May be based on attritionreason and/or customervalue

May replace the 1st offer or

be added on the top of the1st offer (optional)

Excludeaccounts not

eligible forretention

p

1.7 Retention processRemember two essential facts regarding product closure request submission... 1. Retention on product and customer level



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48

2

1


A product closure request can be

submitted through multiple channels(web/IB, branch, call, mail, CRM)

However, its recommended that aproduct closure request be handled at

the branch only

This practice enables face-to-face

interaction with the customer. It is proventhat a face- to- face interaction

increases retention effectiveness

Product closure request submission

Within the regulatory framework, the terms and conditionsshould specify the period within which a product has to beclosed

The contract closure notice period must be sufficient to

execute all cases in the period between the productclosure request and the moment product has to be closed

by terms & conditions/by law

1.7 Retention processRetention process initiation depends on the type of organization.... 1. Retention on product and customer level



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Retention process management (applicablefor centralized organization):

Plan retention team/unit capacity

Distribute retention cases within theteam/unit

Monitor daily retention process quality

Set operational rules managing retention

process, eg contact policy (repeatedcalling in case customer not reached)

Train, coach, motivate retention

officers/specialists

If decentralized organization is applied ...

...product closure request should not be registered(submitted) before a retention process is finished.Thus, the retention process should be realized before

customer submits a closure request. This practice isproven to bring a higher retention success rate.

1

If centralized organization is applied ...

...the product closure request can be registered,but the product cannot be closed until a retentionprocess is finished (assuming retention process isorganized to finish within the period as stipulatedby product terms and conditions and/or law).

2

Retention process initiation

1.7 Retention processThe retention case hand-over and retention offer sale are two main parts of the retention

process. The retention case is distributed to the Retention Person when the customer contactsth b k th h h l th th th R t ti P



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50

Preventive retention cases should always behanded over via a CRM

In the case of centralized retention organization, there isthe further distribution of retention cases among membersof the team/unit

Any channel or contact that register a closure request

begin the reactive retention case

A package closure request may be registered by s branch

person, call center person, or staff receiving post (if closurerequest received by mail)

A retention case handover may be manual or supported

by application. The information about a case must beprovided to Retention Person using the as-is CRMinfrastructure

50Deloitte PowerPoint timesaver Retention Guidelines

the bank through a channel other than the Retention Person.

Retention case hand over Remember that...

A case handover can be:

B) Preventive, e.g. downgrade from primary, CCactivity termination:

CRM campaign execution process (asdefined in the CRM Target OperatingModel)

A) Reactive,eg CA, CA+DC, package closurerequest, CC closure request:

forwarding of customers mail call transfer (to retention team/unit) intermediated call with retention team/unit

by branch (recommended) instruction to visit a branch (recommended)

1.7 Retention processRetention offer sale represents a main part of retention process. It is usually realized throughinteraction with a customer but it can also be done remotely as a CRM campaign.



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Retention offer sale

1) Investigate and record attrition reason2) Check customer relationship value (recommended)3) First step is always to re-sell product/relationship benefits

(explanation, education) - if no, only then the retentionoffer is applied

4) Give 1st retention offer (may be based on attrition reason

and/or customer value)5) Give 2nd retention offer (may replace the 1st offer or be

added on the top of the 1st offer) (optional)

Note: The retention offer sale process

may also be realized remotely, thuswithout customer interaction, in this caseit should be a standard CRM campaignrunning as part of the full campaign

portfolio based on the CRM Target

Operating Model.Theattrition/downgrade reason is not

investigated individuallyin this case.

retention offer fulfillment (offer setup in the system, ifconditional than regular condition monitoring, if condition notmet than the offer setup adjustment)

product closure process (for non-retained customers)

processes of retention cases identification

customer classification to determine customer value retention offer design

Summary of steps to be taken by retention

offer sale:

The retention process does not include the

following operational processes:

1.7 Retention processAttrition/downgrade reason should be investigated as the first step of the retention offer sale. 1. Retention on product and customer level



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Attrition, downgrade reasonRemember that...

Investigation of attrition/downgrade reason has thecharacter of a conversation with customer using a

scriptMonitoring of attrition/downgrade reasons enables reliableanalysis of various aspects having impacton attrition rate,eg competition, quality of sale, quality of service, product

parameters, issues in offering/providing other RB products,personal events

Typically, the 80:20 rule is valid, thus the majority ofretention cases are driven just by a couple of reasons

If those reasons are controllable by the bank, eg unlike

unemployment, than the finding needs to result incorrective action/s

Downgrade reason

explains why a customerchanged his/her behavior -

interrupted income domicileand/or is not using CAand/or CC for transactions

anymore

Attrition reason

explains why acustomer decided to

close or fully early

repay a product

Attrition and

downgradereasons are similar

and result in theattrition of theproduct orrelationship

1.7 Retention processThe list below shows the attrition/downgrade reasons that could be monitored for both re-active and preventive cases, for walk-in and payroll customers, in the case of a CA,CA+DC package closure request as well as downgrade from primary cases



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53

An operational incident (payment failure, direct debit/standing order failure, channelinaccessibility, card not accepted/blocked, etc)

Not satisfied with service/experience in a branch (collection) or in internet banking/otherdirect channels

CA+DC,package closure request as well as downgrade from primary cases.

Takes loan in other bank

Employer prefers other bank or stipulates employees accounts transferto other bank (applicable for non-lending retention cases)

1. Competition

2. Sales

3. Pricing

4. Product

5. Other product

6. Service

7. Personal

CA, CA+DC, package closure request

Incorrect information provided about product parameters, terms & conditions or priceProduct not needed

Fees too high (which?)

Interest rate too low

Difficult to understand, not transparent, not trusted

Complicated usage or access

Not satisfied with other RB product (which?, why?)

Death

Illness/long term sick leave, long termdisability

Became pensioner

Maternity leave

Travels abroad

Error in calculation

Transition to private entrepreneurship/business

ownershipProduct opened just for a specific purpose, not

needed any more*

Salary paid in cash on in FCY** (applicable fornon-lending retention case)Seasonal worker

Became unemployed, Employer in problems (bankruptcy, etc),Change of employment

* applicable only for walk-ins customers and non-lending retention cases, **FCY=foreign currency

1.7 Retention processAttrition/downgrade reasons key takeaways... 1. Retention on product and customer level



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Monitor and record attrition/downgrade reasons as listed on the previous slide (page 53).

Remember that the list is rather the minimum to monitor, reasons for attrition or downgradecan be modified by NWBs

Monitor trends in attrition/downgrade reasons

Evaluate reasons regularly (at least quarterly) to take corrective actions in the case of allcontrollable reasons (produce reports for management, operations, and sales with specific

action recommendations)

Proper attrition/downgrade reason investigation and recording by the Retention Person isthe subject for retention process quality monitoring

1.7 Retention processWin-back campaigns are not a part of the retention process but they usually follow retention

process in the period of time after a product closure.



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NWBs are encouraged to pilot a win-back campaign targeting the population oflost/closed products/customers during the period of time after a product closure.

Before the period customer/account data has to be deleted after product closureexpires, a win-back campaign should be executed, targeting certain high potentialcustomers with an offer.

The campaign should be approved based on positive P/L and its effectiveness, proventhrough testing

In the event that the bank has lost the customer relationship, there is no contractualrelationship between the bank and the customer, a win-back campaign will have the

character of customer win-back with an offer of initial product starting new relationship, iepackage, CA.

Win-back campaign

Remember that...

1.7 Retention processRetention process 3 key takeaways...



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1. Within the regulatory framework, terms & conditions, enablethe submission of a product closure request preferably through

thebranch

2. When possible, initiate the retention offer sale before the productclosure request is submitted (if registered by the Retention Person) orwithin the period after the closure request is submitted and the closureof the product

3. Apply the retention offer sale process as defined on page 51 for eachretention case

Key takeawaysArea

Retentionprocess

Agenda


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57Pa e No. 57









1.7 Retention process 451.8 Retention offer 57






Summary 97


1.8 Retention offerThe third element of the retention activity is the retention offer. It is presented to thecustomer in order to increase the success of retention.

1. Retention on product and customer level1.8 Retention offer


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product closure

request

productmaturity


Retentionevent



(1.6)

2. Retentionprocess

(1.7)


4. Incentivescheme

(1.9)


1.8 Retention offerTo maximize retention success we can target/segmentcustomers to present them with themost appropriate offer.



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Customers are targeted/segmented into different groups so that theappropriate retention offer can be presented

The offer should be based on the overall customer relationship value

in addition to the product value

The cost of the retention offer should be justified by customer value,indicating certain behavior after retention

Targeting/segmentation should be simple to ensure clarity

If applied, it is recommended to make 2-3 customer segments

Customer segmentation is optional, but is advised, especially in caseof centralized retention organization

Customization of retention offer should lead to the improvement of

retention activity P/L

Basic principles of customer targeting/segmentation


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1.8 Retention offerIn terms of retention activity P/L, certain retention offers can be classified by their impact onthe as-is income as...



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Offers with no impact on as-is income

1

Discounts frompotential fees or

interest

Should only be used exceptionally 1) inthe event of bank error or 2) fees shouldbe reversed when the relationship is atstake, even if they were rightfully

charged

A) Offers stimulating primaryrelationship conditional offers

Relaxation of productparameter/s (e.g. min

deposit)

Discount or relaxation of product parameters for adefinite period/time (an offer with expiry date) orunlimited period of time only if certain conditions aremet

A condition should be related to customer behaviortriggering primary relationship: income domicileand/or outgoing transactions activity and should bechecked regularly, at best monthly, for compliance.

If not met, the product pricing should be adjusted

(permanently or until the next month)

B) Offers not stimulating primaryrelationship unconditional offers

These offers may be used in case of bank error

Forpreventive retention cases (egdowngrade from primary) only

conditional offersshould be usedbased on individual CRM campaign

design and expected return

Retention case resolutions with negativeimpact on as-is income (fees or interest

reversal)

2

1.8 Retention offerOverview of retention offer types and concrete examples. 1. Retention on product and customer level

1.8 Retention offer


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Conditional/unconditional50%maintenance fee waiver for the next6/12/18 monthsexpiry date or timeunlimited (CA, DC, Internet banking,package maintenance fee)

Conditional/unconditional 100%maintenance fee waiver for next6/12/18 months or time unlimited

Conditional/unconditional interest rate

adjustment(subject for approvalbased on approval authorityhierarchy), time limited or for next6/12/18 months

1. Pricing offers(discount on product)

Spend X via DC or DC + CC POStransactions in period of next 1/2/3months and get Y amount back

X % cash back for all purchases byDC or DC + CC in the period of thenext 1/3/6/12 months (usually works

worse than the spend and get option,may have the minimum spendthreshold condition)

2. Spend and get,cash back offers

3. More appropriateproduct selling

Package/account downgrade(to abasic product)

Package/account downgradecombined with pricing offerrelated tothe downgraded package/account

Package/account upgrade(to anadvanced product)

Package/account upgradecombined with a pricing offer relatedto the upgraded package/account

Lending product offer at standardconditions (PL/CC)

Lending product offer with preferentialconditions (conditional discount onfees, conditional discount on IR,special combination of tenor/amount

available)

4. Lending product offers(x-sell)

Term deposit or savings account offerat standard conditions

Term deposit or savings account offerwith preferential conditions(conditional discount on fees,

conditional adjustment on IR, specialcombination of tenor/amount)

5. Saving product offers(x-sell)

6. Change of branch or relationshipmanager

1.8 Retention offerFor each retention activity, retention offers should be prioritized and designed in a way thata second retention offer is presented if the first one is rejected. The first offer may be drivenby customer segmentation.



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Investigateand recordattritionreason

Checkcustomerrelationship

value

Re-sellproduct/relationship

benefits

EndAccept?

YES

NO

Give 1stretention

offer

Give 2nd

retentionoffer

Accept?

YES

NO

Accept?

YES

NO

Should always be thefirst step

discount on productlevel 2 (eg100% discount on the maintenance

fee)spend and get offersavings/lending product offer at

preferential conditions (x-sell)

Retentionperson

discount on productlevel 1 (eg 50%discount on the maintenance fee)

cash back offermigration to other product (re-sell)savings/lending product offer at

standard conditions (x-sell)

Excludeaccounts noteligible forretention


1.8 Retention offerAttrition reasoncustomer valueretention offer matrix (example) 1. Retention on product and customer level

1.8 Retention offer


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There can be used more sophisticated approach todetermine a retention offer by attrition/downgrade reason

investigated and/or by customer value (optional).

Attrition reason

SEGMENT

Low Mid High

1.CompetitionOffer sorted by the price of the estimated offersFor preventive retention cases (downgrade from primary), onlyconditional pricing offers should be used

Employer prefers other bank or stipulates

employees accounts transfer to other bankRetention on payroll deal level

Better product in other bankA subset ofoffers from

'mid' segment

A subset ofoffers from

'high' segment

1. Migration to other product (if relevant), with or w/o

conditional pricing discount/s on the new product2. Conditional pricing offers (as-is product)3. Spend and get, cash back offers (full set of options)

Takes/uses loan in other bank1. Lending product offers2. Conditional pricing offers

2. Sales3. Pricing

4. Product

5. Other product

6. Service

7. Personal Each NWB can fill areas 1-7 with differentattrition reasons and thus it will have

different a Attrition Reasoncustomervalueretention offer matrix.

Attrition Reasoncustomer valueretention offer matrix

represents a more sophisticated approach to determiningthe retention offer by attrition/downgrade reason and/orby customer value.

1.8 Retention offerRetention offer key takeaways... 1. Retention on product and customer level

1.8 Retention offer


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Key takeawaysArea

Retentionoffer

4. Use offers with no impact on the as-is income, use primarily offers stimulatingthe primary relationship

1. Re-sell current product features

2. Test the retention process with and without the retention offer

3. Apply the retention offer if justified by the retention activity P/L

5. Record the retention offer accepted/rejected for each retention case usingthe existing CRM infrastructure (if there is a conversation with the customer) toevaluate which offer works best/worst for certain attrition/downgrade

reasons/customer segments or types of retention case

6. Continuously test new offers to avoid staleness

Agenda


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66Pa e No. 66



1.1 Attrition measurement6












2. Retention on payroll agreement level82

Summary 97


1.9 Incentive schemeThe incentive scheme is a critical element of retention activity. 1. Retention on product and customer level

1.9 Incentive scheme


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67


(1.6)

2. Retentionprocess

(1.7)


4. Incentivescheme

(1.9)



product closure

request

productmaturity


Retentionevent


1.9 Incentive schemeSpecial incentives are recommended for a centralized retention organization.In the case of preventive retention or for a decentralized organization, the EOP measureobjective should be established.

1. Retention on product and customer level1.9 Incentive scheme


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EOPmeasure

objective

decentralized organization

preventive retention

If the decentralized organization is used or in the case ofpreventive retention (eg downgrade from primary), thereshould be an EOP measure objective included in the salesincentive scheme of individuals or branch team tostimulate both acquisition and retention

The EOP measure is applicable:

o As an individual goal if there is a dedicatedcustomer portfolio assigned to the branch person orto a higher managerial role - branch manager,

region manager, or

o as a team objective if the portfolio is not assigned

Concrete incentive plans should be developed in NWBs(if relevant) based on local customs, as-is incentive planmechanics and other rules governing the variable pay inNWB

Remember that...

egnumber ofprimary/active

customers EOP

Sales incentive scheme

for

branchmanager

for

branchteam

or

centralized organization

Special incentive scheme

(recommended)

or


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1.9 Incentive schemeThe incentive scheme setup depends on whether there is a centralized or decentralized

retention process.

1. Retention on product and customer level1.9 Incentive scheme


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Key takeawaysArea

1. If a centralized retention process is applied, then define the retentionincentive plan reflecting the principles as listed on page 69

2. If a decentralized retention process is applied, define the positions, eg justmanagerial positions in the distribution network, for which an objective -measure of end of period primary/active customers or EOP product unitswould be incorporated into their as-is incentive plans

Retentionoffer

Agenda



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71Pa e No. 71
















Summary 97



Performance indicators measure retention process efficiency and performance.1. Retention on product and customer level1.10 Performance indicators


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Measurement of retentionefficiency and performance,both on NWB..

..and individuallevel (Retention

Person)...

...drives upretentionproductivity.

Retention productivity is generallydependent on following factors:

retention process- complexity of the process, the less effort the customer has to make beforethe retention process begins, the higher the save rate achieved (eg sending a letter and going

to the branch vs. just a branch visit)

attrition/downgrade reason

customer segment - the lower product penetration is, the lower save rate is achieved (ie thereis a higher probability that a customer with more products will not leave the bank than there is

for a customer with just one product)

retention offer/s attractiveness

competence of staff (experience and motivation)5

4

3

2

1


Retention process efficiency and performance indicators overview...

DescriptionType of indicator

1. Retention on product and customer level1.10 Performance indicators


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I. Retention process efficiency indicators:

% retained units end of month

total cases per month

Financial value of alternative revenue decrease = the difference inrevenue that could theoretically be earned if the customer accepts theretention offer at a standard price and not a preferential price and/or

direct cost of retention offer (eg voucher/discount purchased from a 3rdparty, incentive)

% upgraded relationships to primary

retention cases per period

orSave rate

Average retention price per

saved unit

# of retention cases in different stages of the retention process

average time a retention case stays in a status (eg unprocessed)

II. Retention process performance indicators:

Contact rate, RPC, etc.Contact efficiency

Analysis of queue, bottlenecks

Productivity# of retention case processed per period

FTE

or

Retention

efficiency shouldbe monitored onretained units andupgraded

customers vintagelevel


Retention process quality indicators and customer behavior indicators represent othergroups of indicator that can be measured. Retention activity P/L monitoring should not beneglected.

i if i di



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74

The set of indicators below should be used to measure whether the retention process and retention offer (if retentionoffer is applied) had a positive effect on customers behavior after retention and to what extent

A customers behavior indicator is tracked in time on retained/upgraded vintage level for a period of up to 6 monthsbefore and after retention moment

Examples: attrition rate, % primary EOP, balance/account or customer,

spend/account or customer GI, GI/customer in period,

GI/product (CA, CA+DC, package, CC, etc.)



III. Retention process quality indicators:

Quality score

Rating including multiple measures, eg: % of cases when a Retention Person did not investigate well the

attrition/downgrade reason

% of cases when a Retention Person did not follow the script(detected by retention calls/talks re-hearing)

% of cases when aRetention Person did not present the appropriateretention offerin relation to attrition/downgrade reason and/orcustomer value

Retention activity efficiency and performance is compared to projected efficiency and performance in retentionactivity P/L, if the P/L is not positive or the incremental income has a decreasing trend, the BAU retention activitymodification has to be tested

IV. Customer behaviors indicators:

Retention activity P/L monitoring


Performance indicators key takeaways...

Key takeawaysArea



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Key takeawaysArea

Performanceindicators

1. Implement simple but regular monitoring of retentionactivity efficiency and performance using indicators aslisted above

2. If a centralized retention process is applied, thenmonitor retention activity productivity and quality

regularly

3. Do a customer behavior analysis

4. Check your P/L for BAU retention activity if stillreasonable

Agenda



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76Pa e No. 76
















Summary 97



Retention activity testing begins once a basic work of retention activity is business as usual(BAU). It is the process of as-is retention activity that requires a continuous improvement.

1. Retention on product and customer level1.11 Retention activity testing


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77Retention Guidelines

The control group is the sample of retention cases being processed in BAU process in the period of the test. The

control group should be reasonably sized in terms of the total number of retention cases and should not be lessthan 10% of the total test group cases.

Retention activity testing includes the testing of one or more retention activity elements (organization, process, offerand/or incentive change) applied for a specific number of retention cases (test group) to prove an expected positiveeffect and its extent on retention activity P/L.

test group

control group


Retention activity testing varies in case of 1) preventive retention activity, 2) decentralizedprocess, or 3) centralized process.

2) d t li d 3) t li d



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1) preventive retentionactivity

2) decentralized process 3) centralized process

In the case of preventive retentionactivity, it is reasonable to maintain acontrol group for which preventiveretention activity is not performed

This control group will be used tocompare the effect of a preventiveretention activity with customers self-upgrading/self-activating (ie even if

preventive retention process for thesecases is not realized, some customersself-upgrade/self-activate in a periodafter inactivity or downgrade)

The test is evaluated by comparingretention process effectiveness andperformance on the test versus thecontrol groupand comparing

indicators before and after the test onboth groups

For a decentralized process, the testmay be conducted by a limitednumber of branches. The control groupis a group of retention casesprocessed as BAU in branches notinvolved in the test

For a centralized process with thesubject of the test being a change in

the retention process and/ororganization and/or incentivescheme, the test may be conductedfor all cases processed in the period(because the maintenance of acontrol group may bedifficult/impossible)

Such test is evaluated just bycomparing the efficiency andperformance of the process beforeand after the test


Retention activity four key takeaways...

Key takeawaysArea



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Key takeawaysArea

Retentionactivitytesting

1. Begin with new retention activity in the pilot mode,especially in the case of preventive retention activity, toprove that retention activity P/L assumptions are correct

2. Do at least 1 test of BAU retention activity per year

3. Have budget for retention activity test/s

4. Set up a control group

Agenda



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80Pa e No. 80















Summary 97


1.12 Building a retention process step-by-step

The following steps are considered to be the minimum for implementation.


Measure attrition of products Define a simple retention

1. Retention on product and customer level1.12 Building retention step-by-step


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2) Identifyretentionopportunities

3) Define process

4) Implement

1) Measure andmonitor

Measure attrition of products

Include attrition measures inregular managementreporting

Sub-segment attritedcustomers by productsegment value ch individulnch clech

Measure retention KPIs

Decide on next steps: put theactivity to BAU, change and

test again, dropApply lessons learned to

improve continuously

Define a simple retentionconcept with a focus on re-

active retention activities andspecify to what events the

bank will react by applyingcertain retention activity

Set objectives for retention andprepare retention activity P/L

Decide if a pilot can be

reasonable, focus on CA,CA+DC, package and CCretention

Define retention activityelements:

organization

process retention offer

incentive

Agenda


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82




Summary 97


Agenda


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83Pa e No. 83




2.1 Retention events, retention concept 83


2.3 Retention activity elements: organization, process, retention offer, incentive 91

Summary 97


2.1 Retention events, retention conceptRetention activity on payroll agreement level is applicable for NWBs operating a payroll

program with employers sponsored with forced or strongly-influenced employee migrationto a new salary account.

Att iti f P ll A t

2. Retention on payroll agreement level2.1 Retention events, retention concept


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84

The attrition of a payrollagreement is understood as thetermination of a payrollagreement or the seriousreduction in size of a payrollagreement.

By payroll agreement size it ismeant:

The total salary inflow permonth and/or

The number of active payrollaccounts per agreementand/or

Total GI per agreement permonth


Attrition of Payroll Agreement

2.1 Retention events, retention concept

A retention event indicates a high probability that employer/company will seriously reduceor terminate the payroll agreement in the next period.

3 retention event examples...

2. Retention on payroll agreement level2.1 Retention events, retention concept


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1.Early warning

2. Time elapsed since lastcompany monitoring visit

3. Request to terminate payroll agreementcontract received by NWB

Retentionevent


Not all retention events above should necessarily trigger a retention activity (subject to NWB decision)

Early warning can be indicated by a variety of persons (Corp/SME relationship manager, branch manager,sales manager responsible for company payroll relationship maintenance) and is often based on a seriouschange in the corporate relationship,typically:

Decrease of Raiffeisen Bank exposure (share on company financing)Other negative information, eg change of management, looing a contact person/s in a company,payroll agreement offer given by competitor

Remember that...


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2.1 R

Documents

Retention Guirdelines Final 121214 v04_C