successful implementation of customer lifecycle management and crosssell

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Stories from the battlefield: How A Leading Bank transformed itself through customer management analytics

Are we prepared for the challenges of customer era? Customer needs are ever evolving How well placed are we in predicting Customer needs and proactively managing customer value?2

The dawn of the Customer Era has thrown up a few challengesCustomers are Characterized by Customers have more information on their fingertips, Data on anything and everything is easily available Customers trust their social networks and not brands Challenges faced by firms How to provide information on everything & at the same time build any emotional quotient with customers? How to adopt this reality in day-to-day operations?

more informedDawn of the Customer Era

more Connected

Always ON

Customers are plugged-in everywhere and seek instant gratification

How to have more instant & relevant conversations with customers?

looking for Simplicity3

Customers face paradox of choice (more choice more confusion), hampering decision making

How to simplify products and services that aid in faster decision making?

Banking needs of customersThe Circle of Financial Needs

Transaction Needs

Credit Needs / Borrowing

Core Needs Savings & Investment Needs Security & Insurance Needs

Banking needs of customers are very diverse and keep evolving depending on their progress in lifestage, wealth, risk appetite, acceptance of technology The Circle of Financial Needs Cash transactions Overseas transactions Local & international Payments Govt. payments Online Transfers Transaction Needs Evolved Needs Personal need Auto, Home Marriage Education Travel / holiday Business Quick Cash Credit Needs / Borrowing Evolved Needs

Core Needs Savings & Investment Needs Security & Insurance Needs

For future For business For purchase For education For retirement For emergency Travel / Holidays

Securing life Securing health Securing property Securing travel Securing from theft and fire.

Banking needs of customers are very diverse and keep evolving depending on their progress in lifestage, wealth, risk appetite, acceptance of technology Cash withdrawal Credit cards Cheque / drafts Remittance Internet banking Standing orders Phone banking Mobile banking

The Circle of Financial Needs Cash transactions Overseas transactions Local & international Payments Govt. payments Online Transfers Transaction Needs Evolved Needs Personal need Auto, Home Marriage Education Travel / holiday Business Quick Cash Credit Needs / Borrowing Evolved Needs

Personal loan Home loan Auto loan Business loan Education loan Overdraft Cash advance

Product Manifestations

Core Needs Savings & Investment Needs Security & Insurance Needs

Product Manifestations

Bank account Time deposits Recurring deposits Mutual funds Stocks / shares Bonds Property investment

For future For business For purchase For education For retirement For emergency Travel / Holidays

Securing life Securing health Securing property Securing travel Securing from theft and fire.

Life insurance Medical insurance Property insurance Car insurance Travel insurance Theft & fire insurance

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and if we dont give attention to little details, we have lost their attention.

A Leading Bank has done well in servicing walk-in customers capitalizing on its brand pull, process efficiencies & large network of branches. Beginning of 2009, with Global Financial Crisis setting in, the challenge was to get maximum out of a limited marketing budget Marketing team at A Leading Bank introduced Analytics based targeted cross-sell program, which after initial success, evolved into a full fledged Proactive Customer Lifecycle Management Program. Today we will take you through the key highlights and success factors in implementing this program.

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We set out with a holistic customer centric vision

A Leading Banks vision is to be the market leader in customer lifecycle management in the region This involves ability to manage customer lifecycle using full suite of products and services across all banking channels embedded in automated technology and efficient processes1 2 3 4

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The Vision was translated into specific initiatives for managing customer lifecycle under House of Analytics framework.customer lifecycle 1 full suite of products and servicesAssets

Customer Management - Customer Insights - Customer Segmentation Customer Lifecycle Management - AffluentVALUE MANAGEMENT- Sell loan for a second car - Sell a Watani top-up

- MassACQUISITION- Sell loans

- PrivateREACTIVATION-

ACTIVATION-

RETENTION- Prevent foreclosure

Liabilities

- Identify segments in the market with high opportunities

- On-board and activate customers

- Increase CA balances - Increase debit cards & POS usage - Increase salary transfer customers

- Prevent - silent attrition - balance erosion - salary transfer attrition

- Activate customers - Increase loyalty

Insurance

- Sell insurance

-

- Increase insurance holding

- Retain customers

-

2

Credit Cards

- Sell credit cards

- On-board and activate customers

- Increase spends and utilization - Increase credit lines

-Prevent attrition

- Activate customers - Increase loyalty

Campaign Management- Develop - Execute - Track & Report

CRM Integration- One view of customer - All push and pull channels9

- Automated and optimized

3 all banking channels

4 automated technology and efficient processes

To implement this vision, we had to work across all key components Dedicated analytics marketing team (including consultants) + involved other teams within bank such as products & channels

Set-up a separate data-mart to enable analytics

Put in place rigorous data, campaign management and reporting process as they were done in silos earlier

Identified a series of low-hanging initiatives while setting up a framework & roadmap for long-term strategic initiatives

Achieved & beat target by over 80% in 2009 & 1st qtr 201010

We will deep-dive into one initiative as an illustration of work doneCross-Sell Program11

We have already achieved significant results across KPIs in the Cross-sell programRESULTSIncremental bookings from analytics baseBeat the 2009 targets by 80% 6 months from start of campaign Above the monthly targets

5 months from start of campaign

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We kick-started our analytics journey by launching multiple targeted campaigns for cross-sell of asset products to checking customers1Data Setup

2Model development Several analytical models developed Jun-09: Demographic & product variables Jul-09: Added behavioral variables Jan 2010: Differentiated between salaried / non salaried customers Feb 2010: Customer life time value models

3Campaign launch Test and control mechanism developed More than 25 campaigns launched Optimized on channels for campaigns

4

Campaign execution and tracking

Revenue realization Beat target by over 80% in 2009 & 1st qtr 2010

Data-Mart setup which is refreshed every month

Campaign scripts optimized

Lead management system developed Out-bound callers trained

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1

We started with collating data from all sources, and created an analytical data-martProductsDeposits Watani Credit Cards

Customer Analytics

Mortgage

Auto Finance/ Leasing

TransactionsDeposits ATM Mubasher Credit Cards Branch

Comprehensive Data-mart

Contact information from different sources

Demographics Credit Filters

Campaign Management

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The Data-Mart is refreshed every month

2

We developed several analytics models and improvised on them over timeLook-alike models Decision tree models

Next-best Cross-sell model Segmentation models

Predictive models

Customer Lifetime Value model

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2

We developed several analytics models and improvised on them over timeLook-alike models Decision tree models

Next-best Cross-sell model Segmentation models

Predictive models

Customer Lifetime Value model

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Helped us in understanding customer needs and predicting behaviour

3

Suitable campaign execution channels were selected to optimize channel level RoICustomers were rank ordered based on their propensity to respond to the X-sell CampaignMost Expensive Channel

Set-up a structured process to implement the campaigns Before... After...

Tele MarketingCustomer Propensity

SMS & Email

Outbound Call Center

Random calling without any proper script Agents not trained to manage various situations

Professionally designed call script Trained agents to handle FAQs from customers

E-mail

Email & SMS Script

Scripts were designed in an ad-hoc way

Scripts designed in the systematic & structured way

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Least Expensive Channel

4

Control & Test groups were carefully designed to track campaign resultsLow

Propensity of taking the product

High

Low Propensity Customers

High Propensity Customers

BenefitsWe can test key hypothesis to learn what worked & what didnt:

CREDIT

F I L T E R*

H1: By comparing resultsLow Propensity CustomersHi