Gone are the days of toaster giveaways. Banks are getting hip with innovative marketing ideas.
You know the drill. You deplane and begin wandering the airport, searching for something you need even more urgently than a latte or a restroom: an electrical outlet. Your mobile’s out of juice, your laptop shut itself down mid-flight, and you need to get up and running again, pronto. But how?
If you’re in the Indianapolis International Airport, that question’s easy to answer, thanks to skinny, bright blue signs with snappy sayings (“This outlet works. Now you can too.” or “You and your laptop may sigh with relief now.”) that point the way from eye level down to available energy.
The outlets and the easy-to-spot signage are sponsored by Chase Commercial Banking, designed to capture the attention — and perhaps the accounts — of business decision-makers in what Chase spokeswoman Nancy Norris describes as a chaotic, media-saturated environment.
Gone are the days of the boring bank promotion. Financial institutions nationwide have discovered that to get themselves noticed, they have to break from their traditional marketing modes and get a little crazy. And it’s not just the creative.
In an increasingly competitive marketplace, in which many banking services have become undifferentiated commodities, more banks are sharpening their marketing efforts through use of predictive analytics: trolling their data — their own customer files or a combination of inside and outside information such as local real estate data and customer-behavior profiles — looking for patterns and triggers. It might be a large quantity of money hitting a checking account, say, or a car payment made in advance, which often indicates a windfall. The bank can then send a customized offer via direct mail, e-mail, phone solicitation or some combination of media.
Deployed correctly, predictive analytics can serve as a kind of statistical “magic bullet,” allowing banks to predict customer needs and anticipate customers’ financial windfalls and sudden plunges into bankruptcy.
For example, Click Tactics Inc., a Waltham, Mass., multichannel marketing services firm, has clients that use its business-rule-based platform to be the first to contact people moving into a new house — sending them a personalized direct mail piece within days of their arrival in a neighborhood.
The goal is not just to capture that first checking account or home improvement loan but to establish a long-term, multi-product relationship with the household through an onboarding program, says Click Tactics vice president of marketing Steve Morse. He quotes research that shows that most banks do 80 percent of their cross-selling within the first six months of customers’ opening an account.
Other Click Tactics clients use predictive analytics to give branch office managers the ability to roll out direct mail uniquely targeted to customer demographics within a few miles of their branch location.
“Rather than a big [mail] blast from a central location, now branches are sending out small batches that allow them to respond to specific customer triggers or a unique event in their competitive area,” Morse explains. One branch might court the young families in its neighborhood, while across town, another branch could emphasize attractive CD rates to its older, wealthier customer base who may be at risk of switching to a new competitive local offering.
TAKING AIM
Other banks are turning to analytics to tell the future, in a manner of speaking. Zions Bank, a subsidiary of Zions Bancorporation, which operates some 140 branches in Utah and Idaho, is currently in the midst of a pilot program in which the bank has analyzed one-quarter of its customers to predict which bank product — be it a mortgage, home-equity loan, CD or estate planning services — they are most likely to need next.
According to Steve Thomas, senior vice president for customer loyalty and retention at Zions, the program has combined data that the bank has on file — balance, transactions and profitability of the customer relationship — with appended demographic and psychographic information. Sharp Analytics Inc. then created custom segments and models to predict a customer’s next most likely product.
From there, the bank is able to pinpoint its offers to each group via direct mail, Thomas says. Customers who were targeted in this way were significantly more likely to respond to specific offers than non-modeled customers and, according to Thomas, the number of new accounts that resulted from the pilot is encouraging enough for Zions to continue and expand the program to the remaining portion of its customer base.
IMPROVING PERFORMANCE
Aegis Mortgage Corp., headquartered in Houston, has used advanced data techniques to breathe new life into a previously underperforming direct mail technique: invitation to apply. Unlike offers of preapproved rates, which banks mail to customers on whom they’ve already run a “soft” credit check, invitation-to-apply mailings require no credit check and are, therefore, cheaper to compile.
But traditionally, invitation-to-apply hasn’t performed as well as preapproved, says Forrest Young, vice president of marketing at Aegis, because there were too many unknown variables about the prospective customer base: variables like a homeowner’s level of debt, current mortgage payment or amount of equity available.
