Home Trust harnesses analytics to optimize marketing activities

Published on 28-Mar-2013

"Self-service has created quite a culture shift: users no longer see marketing as a bottleneck for information, and we no longer need to spend time generating reports for them – so everyone is more productive." - Louise Taylor, Director of Marketing, Home Trust

Home Trust


Deployment country:

BA - Business Analytics, BA - Business Intelligence, BA - Performance Management, BA - Predictive Analytics, Business Integration, Business Process as a Service, Empowering People, Smart Work, Smarter Marketing, Smarter Planet

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Home Trust is Canada’s largest independent trust company. It offers mortgages, Visa cards, deposits and retail credit services to consumers who may not have traditional credit backgrounds – for example, self-employed entrepreneurs – or whose specific needs are not met by larger financial institutions. Home Trust is a wholly owned subsidiary of Home Capital Group (TSX:HCG). It employs 640 people at its headquarters in Toronto and at offices in Vancouver, Calgary, Halifax and Montreal.

Business need:
When Home Trust’s senior management asked the marketing department to optimize its loyalty programs, the team needed to find a way to predict the effects of changing the program’s parameters on the company’s finances and its relationships with mortgage brokers.

Building on Home Trust’s previous success with IBM® Business Analytics software, the marketing team used IBM Cognos® TM1® to perform “what if” analyses of different scenarios for its loyalty programs and decide on the best course of action.

Accelerated month-end sales reporting processes from four days to just four hours.

Used predictive analytics to review the effectiveness of the loyalty program and provided supporting evidence for cancelling it. Resources could then be redirected to an incentive program that better meets the business objectives. Enabled users to serve themselves with sales and marketing analyses, giving the marketing team more time to focus on other priorities.

Case Study

Home Trust is Canada’s largest independent trust company. It offers mortgages, Visa cards, deposits and retail credit services to consumers who may not have traditional credit backgrounds – for example, self-employed entrepreneurs – or whose specific needs are not met by larger financial institutions. Home Trust is a wholly owned subsidiary of Home Capital Group (TSX:HCG). It employs 640 people at its headquarters in Toronto and at offices in Vancouver, Calgary, Halifax and Montreal.

For many years, Home Trust has recognized that the success of its business depends on its ability to monitor, analyze and improve the efficiency of its operations. To provide the right level of visibility and insight, the company has been a long-term user of IBM Business Analytics software such as IBM Cognos Business Intelligence and Cognos Data Manager. Approximately 400 employees – more than 60 percent of the total staff – are now Cognos users, and all departments rely on Cognos reports to inform and guide their key business decisions.

“It’s safe to say that our whole business runs on Cognos reports,” comments Imad Jawadi, Director of Business Intelligence at Home Trust. “We have a two-person team that manages the solution, and we are always receiving requests for new reports and analyses, from every level of the organization right up to the senior management team. Some of our key deliverables, such as the daily sales volume report, have become absolutely vital to our day-to-day operations.”

More insight into marketing

Home Trust’s marketing department was a major consumer of these reports, and wanted to extend its use of analytics to gain deeper insight into a number of areas.

“We recently implemented SAP as our new ERP system, and we plan to use it to manage all of our key business data,” explains Louise Taylor, Director of Marketing at Home Trust. “However, at the moment we still have a number of legacy systems that are the main sources of important information.”

For example, the company’s product, sales and financial data has already been migrated to SAP, but the information about its Business Development Managers (BDMs) – who are effectively the company’s main sales force – is still held in a system called Einstein.

“We wanted to be able to match individual mortgage sales to the BDMs and brokers who sold them, so that we would be able to set and manage sales targets more effectively,” says Louise Taylor. “We had been doing this with spreadsheets, but it was a laborious process and we wanted a better solution.”

The marketing department also wanted to find a way to analyze its loyalty programs and create a “sandbox” where users would be able to alter the parameters of each program and predict the effects on the business. This became an acute need when the company’s senior management asked the marketing team to change the parameters of one of its most expensive programs in order to reduce costs.

Choosing IBM Cognos TM1

“We wanted to find a solution that would be able to handle both the sales target reporting and the ‘what if’ analyses for the loyalty programs,” says Louise Taylor. “When we discussed this with the Business Intelligence team, Imad recommended using IBM Cognos TM1.”

Imad Jawadi adds: “We already owned some TM1 licenses as part of an earlier deal with IBM, so we were keen to put it into use. The marketing department came to us with an ideal use-case for the software, since it can process complex models very quickly using its in-memory analytics engine. This makes it perfect for ‘what if’-type analyses, as well as more standard reporting purposes.”

Sales target reporting

The team decided to tackle the sales target analysis first, and developed a new report that matches new mortgage sales to the brokers and BDMs who sold them, and then calculates individual targets for each BDM based on historical and weighted averages, adjusted to the overall sales target for the company. The BDMs can log into the solution via TM1 Web at any time, giving them instant insight into their own performance compared to their targets. The marketing team can also monitor sales by product and by BDM, enabling them to identify areas where new campaigns or more sales enablement is needed to help the BDMs hit their targets.

“We have done a lot of training with the BDMs to encourage them to look up their own figures online instead of asking the marketing team to send them an update,” comments Louise Taylor. “Self-service has created quite a culture shift: they no longer see marketing as a bottleneck for information, and we no longer need to spend time generating reports for them – so everyone is more productive. We’re now looking at doing the same kind of target reporting for our underwriters, which should deliver similar benefits.”

Reassessing loyalty programs

The next project was to build the sandbox for analyzing the company’s loyalty programs.

“The main loyalty program that we wanted to look at was for our mortgage products, which we sell through a network of independent and national brokerages,” explains Louise Taylor. “It was quite a complex program with a number of rules and parameters. To qualify, a broker would need to make a minimum number of sales of a particular range of mortgage products. Once they reached this threshold, they would be rewarded with a fixed financial incentive for each additional sale. Once their earnings had reached $200, and they had met various other redemption requirements, they would be able to claim the money and we would pay out.”

Almost as soon as the marketing team completed the TM1 model for this program, Home Trust’s senior executives asked the marketing team to investigate the possibilities of reducing the cost of the program by raising the thresholds for entry. The marketing team was able to use the model to compare the current state of the program with the predicted effects of the proposed changes.

“Although the new parameters did cut the costs of the program, they also threatened to dramatically reduce the number of brokers who would qualify for the program,” says Louise Taylor. “Membership would be reduced by about 89 percent – and this would mean that only about one percent of all our brokers were actually gaining any incentives from the program.”

Taking a different approach

The marketing team then created a number of other scenarios, showing how various different factors would affect costs, membership levels and incentives.

“What we discovered was that the loyalty program itself was not a good match with the objectives of the business in conjunction with our population of brokers,” comments Louise Taylor. “However we changed the parameters, the result was that a small number of brokers would earn almost all of the rewards, while the rest had little incentive to participate. As a result, we decided to eliminate the program altogether and create a new volume-based program that rewards brokers more fairly. We built the new program in TM1 and it’s dramatically easier to manage. The old program occupied one of my team for a full week each month; now it’s a matter of a couple of hours.”

Unlocking significant savings

By giving Home Trust the evidence it needed to transform its loyalty program, the company was able to launch a program that better met its business objectives, while also providing the right incentive to the brokers. The new program is more cost-effective in terms of both reimbursements and administrative costs.

“We’ve seen other savings from the IBM Cognos software too, especially in terms of time spent creating reports,” says Louise Taylor. “In the marketing department alone, we used to spend four days each month collecting, checking and formatting all the data for our month-end reports. Now it maybe takes four hours. Effectively, this gives the marketing department nearly 30 hours back to spend on actually analyzing the information, building new reports and giving our management team much more useful insights into the business.”

Increasing adoption of analytics

Looking to the future, Louise Taylor hopes to extend the marketing department’s use of the IBM Business Analytics technologies beyond mortgages and into other areas such as Visa cards, deposits and retail credit services. Imad Jawadi also foresees a big future for IBM Cognos TM1 in other departments.

“Our finance group has been impressed with what the marketing team has achieved with TM1, and they are looking at adopting it too,” he comments. “The nice thing from my team’s point of view is that the latest version of TM1 makes it so easy for users to gather, integrate and manipulate data that they can manage most of their day-to-day needs themselves, without support from IT specialists.

“For example, the new Cognos Insight feature enables them to add new dimensions to their analysis cubes, so if they want to bring in some data from a spreadsheet or another source, they can do it in a few clicks. This is a huge leap forward: five years ago, it would have been almost unthinkable that business intelligence could be safely left in the hands of non-technical users.”

Introducing IBM Cognos FSR

Home Trust’s finance team has also recently adopted IBM Cognos Financial Statement Reporting (FSR) to help it generate its financial reports. Cognos FSR makes it easy to work with complex documents, such as annual reports, where financial results and other key figures need to be cited accurately and consistently throughout tens or even hundreds of pages of text. By linking the final text of the document to source data contained in spreadsheets, FSR ensures that figures can be entered and updated easily and reliably throughout the document.

Imad Jawadi concludes: “The breadth and depth of the IBM Business Analytics portfolio are impressive, and we are keen to continue to adopt and leverage these solutions across our business. The more insight we can get into our operations, the more effective we can be as an organization, and the better value we can ultimately deliver to our customers.

About IBM Business Analytics

IBM Business Analytics software delivers data-driven insights that help organizations work smarter and outperform their peers. This comprehensive portfolio includes solutions for business intelligence, predictive analytics and decision management, performance management, and risk management.

Business Analytics solutions enable companies to identify and visualize trends and patterns in areas, such as customer analytics, that can have a profound effect on business performance. They can compare scenarios, anticipate potential threats and opportunities, better plan, budget and forecast resources, balance risks against expected returns and work to meet regulatory requirements. By making analytics widely available, organizations can align tactical and strategic decision-making to achieve business goals.

For more information

For further information or to reach a representative please visit ibm.com/business-analytics.

Products and services used

IBM products and services that were used in this case study.

Cognos TM1, Cognos Business Intelligence, Cognos Data Manager

Legal Information

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