Half of all bank leads are not followed up, and millions of irrelevant offers are mailed at great expense to people who throw them straight in the garbage. Why is this?

If you ask CRMNext CEO Joe Salesky, it’s because of inadequate CRMs. (In case it wasn’t clear from his company’s name, Salesky sells CRMs.) A weak CRM leads to poorly targeted campaigns and siloed relationship management, where the mortgage team has its own relationship with the customer and the credit card team another, can harm customer relations across the entire enterprise.

CRMNext manages more than 1 billion banking customers and supports more than 1 million bankers.

“A lead that is not followed up, or has an unproductive followup — both are damaging to the relationship with the customer,” Salesky told Bank Innovation. The 50% number is somewhat speculative due to understandable under-reporting, but Salesky suspects it’s a conservative estimate, noting, “No one at a bank wants to go on the record — it’s not a happy place. A lot of people say, ‘Oh, it’s more,’ ‘Oh, it’s less’ — others believe it is significantly more [than 50%].”

A 2017 blogpost from PointClear estimates up to 86% of qualified leads, meaning leads who are in control of their resources and informed about the product, get lost, also known as lead leakage. The average close rate is around 20%, up to 30% for “best-in-class” companies.

Salesky traces the problem, at least in part, to ignoring customers’ preferred communication channels. “Why would you call someone when they say they don’t want to talk on the phone, they never answer the phone?” he said.

As channel use changes, banks will need new strategies, new services, and new products. Chatbots and AI will play an important role, but the most important thing may be “right-channeling” leads — communicating in the correct channel for that customer.

Darrius Jones, VP of emerging technologies at USAA Labs, said that while USAA was first in many channels (it began using telephone banking in 1922), the bank did not employ a “build-it-and-they-will-come” strategy. “We have closed some channels and made some people unhappy,” he said, but devoting resources to lightly used channels would ultimately not benefit USAA’s members.

The channel of choice for just about everything is increasingly text. Gene Pranger, CEO of POPin Video Banking and founder of uGenius, a video banking solution acquired by NCR in 2012, once noted that, given a choice, 99% of customers chose text messaging to submit a customer service request. But text doesn’t meet every need. A survey conducted this summer by Bank Innovation and INV Fintech startup Lendtech showed the most preferred channel for customers receiving loan notifications was email.

“For too long, lead management in banking has been product-centric,” Salesky said. “Lead management in credit card, lead management in mortgage, product-centric when it should be customer-centric.”