ESSENTIAL UPGRADE LEADS TO DATA-DRIVEN MARKETING REVOLUTION

Synopsis

Established in 1870, the Cheshire is the UK’s 11th largest building society with

around 900 staff, a 52-strong branch network, and assets in excess of £4.4

billion.

In addition to providing retail financial services, the Cheshire has subsidiaries involved in estate

agency, property letting and offshore deposit taking. Up until 1999, it largely relied on its local

branch network to deliver its investment and mortgage products and services. The ability to

manage customers through multiple channels and a wider range of products were urgently

needed, but first the systems had to be put in place to cope.

In early 2003, another force for change appeared in the form of experienced database marketer

Howard Ormesher who took up the role of Customer Knowledge manager. Ormesher saw the

opportunity the new infrastructure presented for state-of-the-art marketing and

customer management.

Challenges and Solutions

Fast and Agile

With a sophisticated multi-channel capability, it was time to take a close look at what was

available to complement the other new systems in the way of a central marketing database

and related functions.

“We developed a ‘battle plan’ that looked at each segment, some of which had a high cost to

serve and some were declining, where others had huge potential. “At that point, we had shone

the torch into the darkened room but we still needed a system to apply the segmentation to the

full database, make selections and track and report on campaign activity,” says Ormesher.

“All we had was a Business Objects straight reporting tool. We presented the case to the board

and they approved it.” A detailed statement of requirements then went out to a selection of

marketing vendors, with the emphasis on key operational deliverables rather than just a list of

required functions. “You need to lock in things like the need for daily updates and the integration

of specific systems to both the initial ITT and also the proof of concept,” advises Ormesher.

“Otherwise, everything is up for negotiation and you can end up with the different vendors as

well as your own internal people teaming up to tell you why it can’t be done! Under the terms

of our contract, if implementation became protracted could walk away if the implementation

took too long.”

The smartFOCUS smartMARKETER suite, running on the Viper high-speed database, was

chosen to build a proof-of-concept system. “It was the most stable and refined of the systems

and its development had obviously taken account of a lot of the client feedback over the years,”

explains Ormesher. “It’s flexible too, which is important when developing multiple

pitches to be put to a customer in the branch. Normally marketing software deals with just one

offer at a time but you can work around this in Viper.” The proof of concept was swiftly up and

running and work then started on building the main system. As the work progressed, the proof-of-

concept database was kept up and running with daily updates so that lessons learned from it

about the data, the merge process and much else besides could be transferred to the new system

using a strict change control procedure.

Customer

Cheshire Building Society

Industry sector

Financial Services

Solution

Intelligent Marketing

Solution components

Data Quality/Management

Single Customer View

Analysis & Visualization

Predictive Modeling

Campaign Management

Email Marketing

Online Execution

Marketing Performance Management

Managed Service

Cequity's end-to-end suite of integrated services includes customer management consulting, marketing database & information management solutions, analytics, metrics & dashboards and campaign measurement support. Our state-of-the-art technology solution, Cequity ACE is powered by smartFOCUS and is a hosted customer marketing system that can be quickly implemented without major hardware or software investments. This helps us deliver rich yet valuable, information-driven, customer experience opportunities for you.

“From our experience, the Intelligent Analytical Marketing from smartFOCUS makes it possible to instantly analyze, segment, identify and communicate with large volumes of customers and contacts on an individual basis. Intelligent Marketing improves customer communications - throughout the entire lifetime of a company-customer relationship and makes performance driven multi-channel marketing a reality. smartFOCUS is faster and more efficient than we thought it would be!”

CEO - Cequity Solutions

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Results

Following the successful completion of the project, four source systems now feed the marketing

database nightly: the core banking back office platform, the call centre database, and the

MAPs and iMAPs mortgage and investment application processing systems. All aspects of this ETL

operation are controlled by the smartFOCUS Enterprise Manager application. In addition, a file of

credit card customers from affinity partner MBNA will soon be added along with

other data provided by 3rd parties.

Better control of branch interactions with customers is another major benefit of the new

infrastructure. “We have a very detailed record of all transactions, all date and time-stamped,”

says Ormesher. “I’d be very surprised if any other building society could get this level of detail

daily.” In total, over 500,000 customer records and 21million of their “most interesting”

transactions are transferred to the smartFOCUS platform, whose highly-indexed database is

in effect rebuilt from scratch early each morning. A permanent file of campaign histories is

remerged with the new file each time to provide the continuity required; all other historical

data is re-imported each night from the source system and all derived variables such as

lifetime value, any bandings and even age are also recalculated on each update using the latest

data. All this takes about 80 minutes. “If we have new demographic data that we want to load,

we can easily link it in at postcode or individual level,” says Ormesher. “It amazes me how much

the technology has moved on. We are now fully independent of bureau and IT. Once you’ve paid

for the system, it’s just maintenance costs.”

After exhaustive user acceptance testing, the marketing system is now supporting live

campaigns for the first time. These include offering mortgage, buildings and contents insurance

to mortgage holders, personal loan offers to relevant customers based on age, Cameo group

and product holdings, and ISA top-up mailings. One of the key variables for the former is

renewal date, lists of which are available externally. “We need to know their insurance renewal

date and their mortgage renewal,” says Ormesher. “It’s now very easy to append data.” As part

of the drive to get the broadest and most accurate view, geodemographic codes and dates of

birth were amongst the first data sets to be appended, along with the original value-based

segmentation, and mailings have already gone out to ask those who have opted out of

marketing contact to opt back in. Data collection in general - and email in particular - is a

priority. “We ask for the email address on all forms and in the branch, and customers can opt

in to our email newsletter on the website,” says Ormesher. “In future, we will select emails

and different treatments on Viper.”

Customers can also use the site to state their preferred channel for different types of

communication, opting in or out as desired. By inferring these media preferences across the

database, the most suitable contact method can be used where possible. Market research

surveys are already periodically mailed to samples of the various segments.

Daily updating is tailor-made for triggered marketing and also means that conventional

targeting can be based on customers’ most recent transactions. The other side of the coin is

that the data that decisions are based on can change rapidly and selections can quickly go out

of date. “Accounts change every day,” explains Ormesher, “so customers can move from one

mailing cell to another if they pay in some money, or open a new account. It’s extremely

dynamic and you have to get your head around the speed and complexity. It’s refreshed every

day at 4am and we can have a campaign out by 6.30am. You have to plan your schedule in

close to real time.”

“Pitching”, uses the existing operational CRM capability to provide branch prompting, and it links

to an HTML script using intelligence gleaned from customer database. Depending on the

customer, staff might best use their visit to the branch to suggest a meeting with a sales

consultant or simply ask them to provide their email address as part of the data gathering

process. Some of those targeted in the initial mailings will also have the same products pitched to

them by staff if they visit their local branch.

The Cheshire Building Society can nowpunch well above its weight when it comes to

data driven initiatives, thanks to its state-of-the-art customer

management systems.

Marketing and IT can agree on at least one thing: legacy systems are the bane of their

lives. Continually rejigging

ancient mainframe code to take account of the latest add-ons sucks up time and resources

best deployed elsewhere.

So when the Cheshire decided to ditch its legacy systems in favour of modern server-

based software, it paved the way to potentially merge analytics and

operational customer management in a way

rarely seen in the UK financial services sector.

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After exhaustive user acceptance testing, the marketing system is now supporting live

campaigns for the first time. These include offering mortgage, buildings and contents insurance to

mortgage holders, personal loan offers to relevant customers based on age, Cameo group and

product holdings, and ISA top-up mailings. One of the key variables for the former is

renewal date, lists of which are available externally. “We need to know their insurance renewal

date and their mortgage renewal,” says Ormesher. “It’s now very easy to append data.”

As part of the drive to get the broadest and most accurate view, geodemographic codes and dates

of birth were amongst the first data sets to be appended, along with the original

value-based segmentation, and mailings have already gone out to ask those who have opted out

of marketing contact to opt back in. Data collection in general - and email in particular -

is a priority. “We ask for the email address on all forms and in the branch, and customers can opt in

to our email newsletter on the website,” says Ormesher. “In future, we will select emails and

different treatments on Viper.”

Customers can also use the site to state their preferred channel for different types of

communication, opting in or out as desired. By inferring these media preferences across the

database, the most suitable contact method can be used where possible. Market research

surveys are already periodically mailed to samples of the various segments.

Daily updating is tailor-made for triggered marketing and also means that conventional

targeting can be based on customers’ most recent transactions. The other side of the coin is

that the data that decisions are based on can change rapidly and selections can quickly go out

of date. “Accounts change every day,” explains Ormesher, “so customers can move from one

mailing cell to another if they pay in some money, or open a new account. It’s extremely

dynamic and you have to get your head around the speed and complexity. It’s refreshed every

day at 4am and we can have a campaign out by 6.30am. You have to plan your schedule in

close to real time.”

“Pitching”, uses the existing operational CRM capability to provide branch prompting, and it links

to an HTML script using intelligence gleaned from customer database. Depending on the

customer, staff might best use their visit to the branch to suggest a meeting with a sales

consultant or simply ask them to provide their email address as part of the data gathering

process. Some of those targeted in the initial mailings will also have the same products pitched to

them by staff if they visit their local branch.

As well as the smartANALYZER analysis toolset, the Cheshire has also bought the

smartMODELER module which employs the popular KXEN automated model-building package to

deliver functions like profiling and predictive modeling. “We’re not running predictive

models yet, we’re targeting using the segmentation, recency, age, value and so on - standard

stuff,” says Ormesher modestly.

MapInfo’s GIS package already helps with local branch catchment analysis; a new Cheshire

branch opened in central Manchester and Ormesher was able to plan 50,000 door drops

in-house to accompany a mailshot to 20,000 customers situated in the postcode sectors

round the new branch location. “Now we are looking at who from that mailing has taken up a

product,” he says.

Cheshire Building Society Customer

Knowledge Manager, Howard Ormesher, has

been delighted with the speed at which they

are now able to access

customer insight. He says “we are keen to exploit the advantage that the daily

refresh of the customer data gives us. This will allow us to finely tune our

marketing campaigns with increasing sophistication, responding almost

immediately to the way our members’ operate their accounts. I have been

very impressed by the robustness of the daily build process which is now

managed in-house with minimal IT involvement. We now have customer

insight in seconds, which is used immediately to develop ever more

targeted campaigns, delivering greater member value.”

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The Future

Keep developing

Though the infrastructure is now complete, the Cheshire is still very much at the planning stage in

its new data-driven strategy. More data will continue to flow into the marketing database: the

recently-built match keys used to link the call centre database to the central marketing database

means that the Cheshire can add agent records to the central database, and export product

histories and tailored scripts to the call centre. There are plans to

integrate the complaints database in the near future.

One missing link is a data hygiene application. Though all customer records on the marketing database

have a simple name and address match key appended and the GB Accelerator tool is used for rapid

address entry in the call centre, no de-duping or other verification work is

carried out beyond IT’s quarterly postcode updating on the source systems. “This is one for the future

and we have to make the business case for that too,” says Ormesher. The possibilities for future

targeting are almost endless, including generating in-branch pitches dynamically

rather than manually, based on the very latest transactional data.

Customer journey planning is another ambition, with the appropriate treatments applied

when customers are seen by the system to have reached a different “node” in their lifecycle.

Another benefit from swift access to customer-referenced data includes greatly improved

management information that will hand valuable measures like cost-to-serve and profitability to

senior managers. “We can produce information much more quickly using Viper instead of

Business Objects,” says Ormesher. “I can’t really think of anything we can’t do now, so it’s

simply a matter of setting priorities.”

Company Profile

smartFOCUS provides software and services that enable companies to manage and coordinate

marketing across multiple channels, including email, SMS, RSS, telemarketing, point of sale

and direct mail. The company provides a complete portfolio of data integration, analysis,

modelling, on-line execution, campaign planning and management, with integrated budgeting

and finance solutions. The result is ‘Intelligent Marketing’, driven by a single view of the

customer’s activities across all channels. Marketers can target their communications more

accurately, cutting wastage, increasing conversion rates and achieving a better understanding

of the customer base. Users of smartFOCUS’s Intelligent Marketing solutions include AAA,

ABN AMRO, Avis Europe, Carrefour, France Telecom, Hilton International and

News International.

smartFOCUS is headquartered in Bristol, UK, with offices in the US and continental Europe.

Contact Details

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Phone: +91 22-43453800

Fax: +91 22-43453840

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Note: This is an ‘original paper’ by smartFOCUS. Cequity ACE is powered by

smartFOCUS and Cequity uses this distinguished technology to empower its end-to-end suite

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