How this Bank Saw 113% ROMI Through Data Insights and Advanced Segmentation
In the competitive banking landscape, where customers are bombarded with generic marketing and product offers, one financial institution stood out by achieving a staggering 113% return on marketing investment (ROMI) and increasing their loan balances by $39 million in just one year. Its success was fueled by the strategic deployment of an advanced communication tool that redefined how the bank connected with its customers.
The Challenge: Connecting with Customers
With intense competition and high consumer expectations, banks have had to find new ways to attract customers. Modern consumers demand services and products that meet their needs and align seamlessly with their individual lifestyles. This shift has prompted many banks to reassess their approach to customer relationships, as reliance on basic demographic data often falls short in delivering the personalized experience that customers now expect.
The bank in question was familiar with these challenges. Facing stagnant growth and a series of ineffective marketing campaigns, it became evident that a deeper understanding of its customers was crucial. The institution recognized the need to not only retain its current clientele but also increase its customers' share of wallet and loan balances. To achieve these financial objectives, the bank understood it must transform its strategy to forge more meaningful, personalized connections with its customers, thereby enhancing customer satisfaction and loyalty.
Recognizing the need for change, the bank adopted EngagementIQ, an innovative communication tool from WordCom designed to revolutionize customer engagement through data-driven insights.
This program introduced several vital strategies:
Data Append Deep Dive: The bank used a data append strategy to integrate additional demographic and behavioral data from third-party sources. This enriched data provided a more comprehensive view of current account openers. By focusing on areas with a high likelihood of relevant account activity, the bank could target its marketing efforts more effectively, ensuring that resources were allocated to regions and demographics where they would have the most impact.
Custom Segmentation: Integrating third-party data was crucial for uncovering deeper layers of customer behavior. The bank could identify unique customer segments through custom segmentation based on variables like discretionary spending, risk tolerance, and financial planning habits. This strategy enabled the bank to create tailored marketing messages that resonated on a personal level with different segments, thereby increasing the effectiveness of their communications.
Predictive Modeling: Using historical data and real-time interactions, EngagementIQ built models to predict the likelihood of customers needing various banking products, such as loans or new accounts. This approach moved the bank from a reactive to a proactive stance, where offers were aligned with predicted needs. Predictive modeling helped to identify potential high-value customers and prioritize them in marketing efforts, ensuring that the bank maximized the potential value from its existing customer base.
Highly Personalized Marketing: After creating detailed customer profiles and predictive models, the bank implemented an omnichannel marketing strategy that included direct mail, email, and digital ads. Each piece of communication was hyper-targeted and crafted to align with the individual recipient's profile and predicted needs. For instance, homeowners with existing lines of credit that were underutilized were targeted with communications on the benefits of using the money available to them. In comparison, older customers with higher investable assets received offers for CD products. This level of personalization ensured that messages were relevant and timed according to the predicted life stage and financial needs of the customers.
Interactive Dashboards: Real-time interactive dashboards provided insights into customer profiles and campaign effectiveness, aiding quick decision-making and enhancing strategic alignment within the bank.
A Story of Success
The implementation of EngagementIQ marked a turning point for the bank. By transitioning from broad-based marketing to a strategy rooted in detailed customer understanding and predictive analytics, the bank improved its engagement rates and significantly increased its financial performance.
39 Million in Loan Balances
The targeted approach resulted in a $39 million increase in overall loan balances, including mortgages, auto loans, and equity lines.
113% Increase in ROMI
The institution witnessed a 113% increase in ROMI, demonstrating the efficacy of the EngagementIQ platform in maximizing marketing investments.
This success story underscores the importance of moving beyond traditional demographics to embrace advanced analytics that can uncover the true potential of customer relationships.
As noted by the client:
"For years, we've leaned onWordCom for our cross-sell program. They use a lot of data to paint a picture of our customers and their needs. It's so important to have a true partner who can take such a pivotal program off our plate and provide the tracking we need to prove ROMI. "
