Financial services company “unlocks” customer relationships

As one of North America’s largest financial services companies, this organization manages assets of approximately USD85 billion, and provides investment management, retail and commercial banking, retirement, consumer finance, and investment banking products and services to individuals and companies. The organization’s businesses deliver products and services through branches and offices, ATMs, telephone banking and the web. The company services nearly 4 million households and commercial clients and it offers a wide array of financial solutions to meet client needs.

The challenges
Focused on customer satisfaction, building customer relationships and providing customer value, this company wanted to build dialogues with each customer through fewer, highly targeted and timely communications. To accomplish this, the company needed to empower marketers to drive their campaigns from design to execution faster and more efficiently and reduce their reliance on IT. This would enable marketing to improve cycle times, increase control over communication timing and frequency, and improve flexibility. The current process for managing customer communications depended on the IT group to execute the business requirements marketing established. This additional step in the marketing process took two to three weeks plus the time required to execute and integrate the contact and offer information to each touch point. On average, it took eight weeks to complete this process, and occasionally up to 16 weeks, depending on campaign complexity. Each time the marketing group relied on IT, it cost them an average of USD4300—a total of USD2 million each year. The company wanted to reduce its time to market by 60 percent as well as its costs, while also enhancing the overall customer relationship through smarter, targeted communications.

At the time the company purchased IBM® Campaign, it was in the final stages of evolving its data and technology architecture. The architecture consisted of an enterprise-wide data warehouse and several customer data marts. The company’s marketing group required flexible marketing software to support its changing data structure, as well as provide agility to respond quickly and easily to market changes, customer requests, and competitive pressures. In order to effectively leverage the changing data structure, the marketing group needed a user-friendly software application that allowed marketers to adapt to changing market and data needs without having to become “technology buffs.” Additionally, the software had to work with the company’s data infrastructure and integrate with existing customer touch point systems.

The solution
After evaluating eight vendors, the company selected IBM Unica for Enterprise Marketing Management (EMM) to help design, implement, execute, and manage a targeted customer contact strategy across several marketing channels— direct mail, call center, email, web, voice response unit (VRU), and homegrown relationship management tools designed to support customer and prospect marketing activities. Other IBM Unica integration points included an internal channel distribution tool, the mainframe system, data marts, several operational databases, flat files, and an externally hosted financial services data application. The company was particularly impressed with IBM Campaign’s flexibility to integrate with data, operational systems, and customer touch points without custom coding; the breadth and depth of the solution’s functionality; and IBM’s clear vision for the future.

From a tactical execution perspective, the company targets most marketing programs at the individual customer level. Yet the business rules and logic used within a campaign to target the right customers require access to data maintained at different audience levels, including customer, household, and account level. With IBM Campaign, the company could easily perform the various exclusions and selections at each level. For example, the company may first exclude all high value households handled through a specific banking channel, and then exclude the communication channels each individual has opted out of at the customer level. Next, at the account level, they might select only the highest priority account for up-selling or cross-selling and then, lastly, execute the campaign at the customer level. Prior to purchasing IBM Campaign, this multi-level selection and exclusion process required custom programming and several iterations between marketing and IT before the final campaign was executed. Now with IBM Campaign, the process is streamlined, requires no coding or changes to the existing data structures, and is executed by marketers, resulting in faster deployment and more accurate selections.

Sample campaign: Customer profitability segment migration
Using IBM Campaign, the cross-channel, multi-wave campaign management module within the IBM Unica EMM Suite, marketers designed a program to increase the value and profitability of 40,000 lower profit customers and migrate each to the next higher profit segment. To accomplish this, the company designed a variety of targeted product and service cross-sell offers. By expanding the current customer relationships with the right products, the company wanted to increase existing account balances as well as improve customer loyalty and value.

Through IBM Campaign’s unique Universal Dynamic Interconnect™ (UDI) technology, the company was able to access data from the mainframe, data mart, and flat files simultaneously without custom coding. Therefore, marketers could quickly and easily append data and perform exclusions across multiple data sources. They then segmented the customer records into five groups—four segments and one control group.

Each group contained 10,000 customers. IBM Campaign enabled marketers to enforce the group size, as well as randomly select the customers in each group to ensure measurable and valid results. They further refined the four segments based on customer attributes, including income, products owned, and other demographic variables.

Throughout the design process, marketers quickly generated and refined counts, then audited the data selections and segmentation prior to campaign execution. This meant they could validate that the right individuals were correctly targeted without making any further investments. Once confirmed, they executed the campaign and published the customer contact and offer information to the homegrown call center application for representatives to use. With IBM Campaign, marketers designed and executed this campaign in just one week— at least two weeks faster than the prior process and a 67 percent increase in marketing velocity.

Sample campaign: Business banking retention and loyalty
Marketers designed a second campaign using IBM Campaign to deepen relationships, build loyalty and increase the retention rate of high-value small business customers. Based on a recent survey of former customers, service was one of the main reasons for customer attrition. With this in mind, the retention program focused on providing targeted, relevant offer recommendations to the call center.

The program also focused on developing a more in-depth contact strategy for high-risk attriter’s, not only to help stem attrition, but also because past efforts had produced strong cross-sell results.

This new campaign consisted of two parallel marketing programs—a monthly retention and a quarterly loyalty program. Both programs used randomly selected and quantified standard test and control groups to ensure the entire population was accurately represented and, ultimately, to help measure the impact of the initiatives.

Prior to IBM Campaign, it was very difficult to implement a campaign of this caliber, due to IT, time and cost constraints. However, the company determined that this multifaceted retention and loyalty campaign could generate additional revenue and reduce costs. With IBM Campaign, the company now had the ability to implement this initiative with a minimal investment.

The company used IBM Campaign to launch the monthly retention programs targeting customers with the highest attrition scores using informational messages aimed at building a customer dialogue. Marketing then moved all customers from the retention programs into the quarterly loyalty program stream to further develop the relationship and decrease the likelihood of attrition.

Marketers presented customers with personalized offers to let small business owners know the company appreciates and values their business. Sample mailings included a holiday card with a free long distance phone card and an economic forecast highlighting the positive impact on a client’s finances. Additionally, all customers involved in the loyalty program, including the small business owners, received relevant material focused on the company’s new trusted advisor initiative, which promotes the company’s full service financial offerings such as helping families plan for college and retirement.

The results
By empowering its marketers, the company has saved thus far an average of USD4300 per campaign and anticipated these savings to reach USD1.2 million within the first year of ownership. With IBM Campaign, the bank expects to increase its conversion rates by 20 percent, and it has already increased marketing velocity by approximately 60 percent.

Marketing productivity has also increased significantly. Following IBM Campaign’s implementation, the company reduced the number of employees supporting the marketing campaign design and execution processes by half, freeing up resources for other projects and activities.

With IBM Campaign, marketers can access data from all customer touch points and data sources, providing a complete customer view without the need for custom coding. The marketing department can now turn data into actionable information quickly and easily. In fact, it now takes an average of one week to design and build a multi-channel campaign versus three weeks—a 60 percent increase in marketing velocity.

The organization has just completed the first wave of the customer profitability segment migration, and initial results indicate that conversion rates for the targeted groups are two times that of the control group. This exceeds the company’s expectations and shows that its selection and segmentation criteria for the target groups were effective.

The business banking retention and loyalty campaign will continue to run for the next 12 months. Based on early indications, the company anticipates the following results:

• A minimum of USD20million in new balances from existing customers
• Enhanced customer satisfaction due to improved customer service
• Increased customer loyalty

Activity	Time
IBM Campaign training and knowledge transfer	10 days
Internal IBM Campaign pilot with early adopters	15 days
IBM Campaign production installation	2 days
Complete marketing process re-design and integration-across many systems and channels	20 days
IBM Campaign setup and data source mappings, building re-usable templates, table catalog, derived fields and standard	8 days
First production campaign using data mart, flat files and mainframes	5 days
Total technology implementation and setup time	60 days
IBM Campaign’s rapid, under budget implementation has resulted in a return on software investment in less than eight months.

The future
The company is looking to integrate email marketing with its existing communication channels. It will use targeted B2B email messages for retention, acquisition, and loyalty initiatives. The organization plans to continue integrating its reporting with its marketing process, thereby ensuring that marketing velocity is maintained, testing is monitored, and results are consistently measured across all marketing efforts.

For more information
To learn more about IBM Unica products, please contact your IBM marketing representative or IBM Business Partner, or visit the following website: ibm.com/software/info/unica.

Smarter Commerce: An integrated approach
IBM Unica products are part of the IBM Smarter Commerce initiative. Smarter Commerce is a unique approach that increases the value companies generate for their customers, partners and shareholders in a rapidly changing digital world. To learn more about Smarter Commerce, visit ibm.com/smarterplanet/commerce.