BRING DATA TO THE TABLE TO REVEAL INSIGHT SO YOU CAN REALISTICALLY ADDRESS THE CHALLENGES AHEAD OF YOU.
A Business Case for Setting Solid Goals
Sometimes it’s the CEO looking for overall growth and not considering that it might be an unrealistic expectation.
Or, it might be the CLO trying to deliver what the CEO is asking for (or just being overly-confident when it comes to projections).
No matter the cause, the impact of poor planning can be far-reaching: Unrealistic goals can tax the system, demoralize the team, and leave the bank struggling to meet its targets. Taking the time to research or enlist data analysis is sometimes seen as too time-consuming. But the measure-twice, cut-once philosophy can prove to be far more valuable than taking the quickest path to a perceived solution.
If you find your organization struggling to balance optimism with realism in planning, you might want to consider one of our recent experiences:
Galapagos worked with a bank who set wildly optimistic goals for mortgages two years in a row. They projected 1.5-2 times more than what would have been reasonable.
Did they reach their goals? Not even close.
It wasn’t surprising, since the goals weren’t based on sound market data. And the impact was significant, both on the bank’s bottom line and on the staff that had failed to deliver on this unreasonable request.
When Galapagos was invited to the table to help with the planning process, the situation changed. We were able to take a deep dive into available data and project a short- and long-term mortgage opportunity that considered the bank’s level of coverage, the competitive situation, and the degree of aggressiveness and resources the bank was able to invest in the effort.
First, we established accurate trade areas based on the bank’s distribution, customer purchase behavior, and competitive density.
Second, we developed a customer propensity profile based on past customer behaviors—then ranked all households in the market against this profile.
Then, heat maps that represented purchase propensity and prospect concentrations were generated to identify where marketing and sales resources should be best targeted.
Lastly, the overall annual goal was broken down into specific production targets for specific branch markets, originators, and the online channel. These formed the basis of bi-weekly reporting for the organization.
The result was an accurate plan that inspired growth, yet remained achievable. The bank continues to reach the goals that we helped set.
Quality data analysis provides the ability to see patterns and opportunities. Insight drives strategy. While we understand the desire for aggressive growth, we find, time and time again, that combining optimism with the true story of solid data sets you up best for success.
Do you need a more data-driven approach to planning? If you would like to discuss building a more effective plan, call Jeremy Kane at 616.608.7359 or email him today (firstname.lastname@example.org).