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Why Direct Deposit Indicators Can Mislead The Primacy Pursuit

Prioritizing Personalization

Perhaps the most prized goal among retail banks is converting a new customer to primacy, as the accepted route to good rates of customer lifetime value (CLV). Time is of the essence, however, with research confirming that if a customer does not select a new provider as their primary bank within the first 90 days from onboarding, they likely never will. There is so much more that banks can do to identify behaviors and react to encourage primacy during that period.

Converting a new customer to primacy is no mean feat and represents a huge inconvenience for the user. Most banks apply the tried and tested method of eye-catching rates and cash bonuses to ease the difficulty of switching, and these incentives do encourage account engagement. Unfortunately, they’re fairly simple to game with minimum volume or value of deposits necessarily designed to be attainable.

A big challenge for providers is actually choosing the right primacy indicators to act on. Banks and credit unions typically gauge a customer to be headed toward primacy by the appearance of a recurring normally three-month, ACH deposit. This is a standard proxy for a customer setting up direct deposit, and the assumption is that if a customer sends their paycheck to the new checking account, transactions and primacy will follow.

Over the past few years, I’ve helped marketing teams launch successful onboarding, engagement, and retention marketing programs in pursuit of customer primacy. Through this, I’ve learned not to rely on the direct deposit indicator. My recommendation for those aiming to identify primacy and proclivity toward it is to broaden its definition with a few crucial adjustments.

Firstly, institutions should look at both credit and debit card use rather than focusing on only the latter. Many consumers prefer to use their credit card for everyday spending so focusing too much on how a new customer uses their debit card can lead to erroneous data. Institutions should assess transactions on both cards for enhanced visibility on varying customer behaviors and actionable insights for marketing.

Secondly, institutions should put much more emphasis on the evaluation of all transaction types, including cash deposits and withdrawals, check deposits, debit and credit card point-of-sale (POS), and all ACHs resulting from internal and external deposits and withdrawals. By only focusing on direct deposit, providers can miss crucial indicators of primacy and its leading indicators. By mapping these transactions, banks can see and react to the direct and indirect impacts of marketing and influence change.

Lastly, one transaction a month isn’t frequent enough to interpret meaningful changes in behavior. A minimum of ten transactions, containing at least one withdrawal and one deposit, within a rolling thirty-day period should be the target and dataset for marketing to work with. A lot can happen in thirty days, and after each marketing attempt, the bank can observe how behavior is changing and encourage more engagement towards their overall target.

The good news is that most institutions aren’t entirely off track by looking at direct deposits. However, they must move beyond this indicator as the be-all and end-all and evaluate how different customers have access to and use their bank accounts and the cards linked to them. Once they expand this primacy definition, they have a better chance of identifying the right content and leading indicators for primacy across a variety of customers—the holy grail of customer engagement, primacy, and maximizing customer lifetime value (CLV).


This article is part of the Amplero Insights series. To request to be added to our distribution list contact

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