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Case Study: Financial Services, Consumer

Acquiring profitable customers through data-driven direct marketing.

Situation: A high-profile financial institution utilizes direct marketing as its primary marketing activity for acquiring new checking account customers. The bank needed to increase new checking account customer acquisition, while lowering cost per new account, by driving qualified prospects to their nearest branch to open a checking account.

The market was saturated with a multitude of checking solicitations from various financial institutions. The ongoing challenge for our client was the constant need to discover new strategies and tactics for gaining market share.

Compounding this challenge was the attrition rate that runs high within this market. To overcome attrition, a direct marketing program needed to be developed that not only acquired more checking account customers, but acquired those customers with a propensity to maintain profitable, long-term accounts.

Strategy: The Anderson team developed an ongoing monthly direct mail program driving qualified prospects to their local branches within specific areas. This program incorporated a targeting strategy that focused on those prospects possessing attributes of the bank's best customers and a comprehensive testing plan.

Solution:

		Precision targeting: We developed a data modeling strategy in order to target those prospects with the propensity to become long-term, profitable bank customers. Data analytics were key to program performance and lowering cost per new account. Target audience criteria were based on geographic location and profitability. Age, income, length of residency and home ownership shaped data selection. Through analysis of responders, a response model was developed. This response model not only factored in responsiveness, but also account profitability. This allowed the bank to target households with the highest propensity to respond and be profitable.
		Continual learning and optimization: Ongoing offer, creative and format testing was conducted in order to continually improve cost per response and profitable customer acquisition.
		Cost-efficiencies and economies of scale: In addition to using data analytics to lower cost-per-new-account, all production work was consolidated within Anderson for overall cost-effectiveness of the program. This included data processing, printing, laser personalization, and mailing services for 1.7 million mail pieces per quarter. This consolidation provided the client with flexibility to react to market conditions and scale mail volumes according to need, as well as allow for the development of multi-version testing programs that have helped sustain the overall program.

Results: The data response model has since been refined over time to continually yield profitable, long-term checking account customers for our client. Testing new data sources and selects, in combination with creative and offer tests, continues to sustain response and achieve cost-per-new-account goals. Account activation, utilization, and retention programs are also in place to maintain checking account customers acquired from the acquisition program. The Anderson team continues to refine and execute this ongoing program that has been in place for over eight years.

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