Leveraging Member Relationship, Spending Data to Target Promotions
According to a recent Oliver Wyman report, “A Money and Information Business: The State of the Financial Services Industry 2013,” the “source of value in financial services has shifted from balance sheets and physical distribution networks to data.”
Despite this, many organizations have largely persisted with their historical business models and ignored the value that their data possesses.
Here’s an example: a credit union in California had the challenge to increase card portfolio profitability. To start their efforts, they used an analytics tool to evaluate and segment their cardholders to determine those who had used their debit cards less than five times per month. Next, they initiated a gift certificate-based incentive campaign designed to increase the number of signature debit transactions to nine per month.
This campaign not only drove an increase in the number of members meeting the nine-transaction threshold, it also encouraged hundreds of others to increase their debit card usage. Only those members who qualified received the offer, making the campaign very cost-effective, with benefits extending well after the campaign. In the first 12 months after the promotion, the credit union realized a 170% return on its marketing investment.