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Successful Implementation Of Customer Lifecycle Management And Crosssell

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Case study on how to impliment a analytics led customer lifecycle management program in a retail bank.

Case study on how to impliment a analytics led customer lifecycle management program in a retail bank.

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Successful Implementation Of Customer Lifecycle Management And Crosssell Successful Implementation Of Customer Lifecycle Management And Crosssell Presentation Transcript

  • Stories from the battlefield: How Al Rajhi transformed itself through customer management analyticsAnand NigamHead of Market Insights and Analytics, Al Rajhi Bank
  • 2
    Are we prepared for the
    challengesof
    customer era?
    Customer needsare ever evolving …
    How well placed are we in
    predicting
    Customer needsand
    proactivelymanaging
    customervalue?
  • The dawn of the ‘Customer Era’ has thrown up a few challenges
    3
    … more ‘informed’
    Challenges faced by firms
    Characterized by…
    Customers are…
    …more ‘Connected’
    Dawn of the ‘Customer Era’
    …Customers have more information on their fingertips, Data on anything and everything is easily available
    How to provide information on everything & at the same time build any emotional quotient with customers?
    …‘Always ON’
    …Customers trust their social networks and not brands
    How to adopt this reality in day-to-day operations?
    …looking for ‘Simplicity’
    …Customers are plugged-in everywhere and seek instant gratification
    How to have more ‘instant’ & relevant conversations with customers?
    … 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 customers
    The Circle of
    Financial Needs
    Transaction Needs
    Credit Needs /
    Borrowing
    Core Needs
    Security & Insurance Needs
    Savings & Investment 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
    • Personal need
    • Auto, Home
    • Marriage
    • Education
    • Travel / holiday
    • Cash transactions
    • Overseas transactions
    • Local & international Payments
    • Govt. payments
    • Online
    • Transfers
    • Business
    • Quick Cash
    Transaction Needs
    Credit Needs /
    Borrowing
    Evolved Needs
    Evolved Needs
    Core Needs
    Security & Insurance Needs
    Savings & Investment Needs
    • Securing life
    • Securing health
    • For future
    • For business
    • For purchase
    • For education
    • For retirement
    • For emergency
    • Travel / Holidays
    • 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 …
    • Personal loan
    • Home loan
    • Auto loan
    • Business loan
    • Education loan
    • Overdraft
    • Cash advance
    • Cash withdrawal
    • Credit cards
    • Cheque / drafts
    • Remittance
    • Internet banking
    • Standing orders
    • Phone banking
    • Mobile banking
    The Circle of
    Financial Needs
    • Personal need
    • Auto, Home
    • Marriage
    • Education
    • Travel / holiday
    • Cash transactions
    • Overseas transactions
    • Local & international Payments
    • Govt. payments
    • Online
    • Transfers
    • Business
    • Quick Cash
    Transaction Needs
    Credit Needs /
    Borrowing
    Product Manifestations
    Product Manifestations
    Evolved Needs
    Evolved Needs
    Core Needs
    Security & Insurance Needs
    Savings & Investment Needs
    • Securing life
    • Securing health
    • For future
    • For business
    • For purchase
    • For education
    • For retirement
    • For emergency
    • Travel / Holidays
    • Securing property
    • Securing travel
    • Securing from theft and fire.
    • Life insurance
    • Medical insurance
    • Property insurance
    • Car insurance
    • Travel insurance
    • Theft & fire insurance
    • Bank account
    • Time deposits
    • Recurring deposits
    • Mutual funds
    • Stocks / shares
    • Bonds
    • Property investment
    …and if we don’t give attention to little details, we have lost their attention.
  • 7
    Al Rajhi Bank has done well in servicing
    walk-incustomers 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 Al Rajhi Bank introduced Analytics based targeted cross-sell program, which after initial success, evolved into a full fledged
    Proactive CustomerLifecycleManagementProgram.
    Today we will take you through the key highlights and success factors in implementing this program.
  • 8
    Success Factor # 1
    We set out with a holistic customer centric vision …
    “Al Rajhi’s 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 processes”
    1
    2
    3
    4
  • 0
    9
    Success Factor # 2
    The Vision was translated into specific initiatives for managing customer lifecycle under “House of Analytics” framework.
    Customer Management
    • Customer Insights - Customer Segmentation
    customer
    lifecycle
    Customer Lifecycle Management
    - Mass - Affluent - Private
    ACQUISITION
    ACTIVATION
    VALUE MANAGEMENT
    RETENTION
    RE-ACTIVATION
    1
    -
    - Sell loan for a second car
    - Sell a Watani top-up
    - Prevent foreclosure
    -
    - Sell loans
    Assets
    - 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
    - Identify segments in the market with high opportunities
    Liabilities
    full suite of
    products and services
    -
    - Increase insurance holding
    - Retain customers
    -
    - Sell insurance
    Insurance
    - On-board and activate customers
    - Increase spends and utilization
    - Increase credit lines
    -Prevent attrition
    - Activate customers
    - Increase loyalty
    - Sell credit cards
    2
    Credit Cards
    automated technology and efficient processes
    Campaign Management
    - Develop - Execute - Track & Report
    4
    CRM Integration
    -One view of customer - All push and pull channels - Automated and optimized
    all banking channels
    3
  • To implement this vision, we had to work across all key components …
    10
    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 2010
  • We will deep-dive into one initiative as an illustration of work done
    11
    Cross-Sell Program
  • We have already achieved significant results across KPIs in the Cross-sell program
    RESULTS
    Beat the 2009 targets by 80%
    Above the monthly targets
    6 months from start of campaign
    5 months from start of campaign
    Incremental bookings from analytics base
    12
  • We kick-started our analytics journey by launching multiple targeted campaigns for cross-sell of asset products to checking customers…
    13
    Success Factor # 3
    2
    3
    4
    1
    Model development
    Campaign launch
    Campaign execution and tracking
    Revenue realization
    Data Setup
    • Test and control mechanism developed
    • More than 25 campaigns launched
    • Optimized on channels for campaigns
    • Several analytical models developed
    • Data-Mart setup which is refreshed every month
    • Campaign scripts optimized
    • Lead management system developed
    • Out-bound callers trained
    • Beat target by over 80% in 2009 & 1st qtr 2010
    • 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
  • 14
    We started with collating data from all sources, and created an analytical data-mart
    1
    Products
    Customer Analytics
    Watani
    Deposits
    Credit Cards
    Comprehensive
    Data-mart
    Mortgage
    Auto Finance/ Leasing
    Transactions
    ATM
    Deposits
    Mubasher
    Branch
    Credit Cards
    Campaign Management
    Demographics
    Contact information from different sources
    Credit Filters
    The Data-Mart is refreshed every month
  • 15
    We developed several analytics models and improvised on them over time
    2
    Look-alike models
    Decision tree models
    Predictive models
    Next-best Cross-sell model
    Segmentation models
    Customer Lifetime Value model
  • 16
    We developed several analytics models and improvised on them over time
    2
    Look-alike models
    Decision tree models
    Predictive models
    Next-best Cross-sell model
    Segmentation models
    Customer Lifetime Value model
    Helped us in understandingcustomer needs and predictingbehaviour
  • 3
    Suitable campaign execution channels were selected to optimize channel level RoI
    Customers were rank ordered based on their propensity to respond to the X-sell Campaign
    Set-up a structured process to implement the campaigns
    Before...
    After...
    Most Expensive Channel
    Tele Marketing
    • Random calling without any proper script
    • Agents not trained to manage various situations
    • Professionally designed call script
    • Trained agents to handle FAQs from customers
    Outbound Call Center
    SMS & E-mail
    Customer
    Propensity
    Scripts were designed in an ad-hoc way
    Scripts designed in the systematic & structured way
    E-mail
    Email & SMS Script
    Least Expensive Channel
    17
  • Control & Test groups were carefully designed to track campaign results
    4
    Propensity of taking the product
    High
    Low
    Benefits
    We can test key hypothesis to learn “what worked” & “what didn’t”:
    H1: By comparing results from C1 & C2 we can estimate lift due to modeling
    H2: By comparing results from T & C1 we can estimate lift due to campaign offer
    High Propensity Customers
    Low Propensity Customers
    C R E D I T F I L T E R*
    High Propensity Customers
    Low Propensity Customers
    Random sample
    BAU conversion
    Test Group, T
    Control Group, C1
    Control Group, C2
    Efficiency through modeling & analysis
    Incremental conversion due to campaign offer
    18
    * Except the SIMAH check
  • An E2E process for campaign tracking was developed and executed
    4
    • Every campaign was tracked for 3 months post launch
    • Campaign results were fed back into data for fine tuning analysis for subsequent campaigns
    • Set-up a process for managing leads for the channels
    • All results were shared with entire bank in the form of news-letters
    19
  • Success Factors # 4 & 5
    Significant progress was made and communicated across all initiatives with good results against a pre-defined success matrix
    Activation - New Customer On boarding
    Acquisition - Cross Selling
    • Sales: Incremental sales of SR2.3bn
    • 30+ campaigns run
    • Products: Credit cards added to consumer finance cross sell
    • Execution: SMS and Outbound Calls
    • Objective to accelerate customer profitability through managed engagement
    • Performance metrics based on salary transfer, online usage, cross sell
    20
    20
    Value Management - Credit Card Segmentation
    Attrition - Account Depletion
    • Silent attrition identified as significant point of investigation
    • Internal analysis combined with customer research to identify root causes
    • Understanding of customer segments in terms of usage and revenue
    • Foundation laid for 2011 credit card portfolio management strategy
  • While implementing analytics within the bank, we are in the process of establishing a fact based culture
    Structured Model to change organizational mindset…
    Supported by 'soft approach' to make the team understand and implement the change…
    Dedicated analytics marketing team (including consultants) + involved other teams within bank such as products & channels
    Cultural Challenge #
    Rigorous data, campaign management and reporting process put in place
    Clear goals and plans incorporated by all teams
    21
  • …and we are currently transforming our organization for facing the customer era by making every customer interaction count
    From…
    To…
    We have established an end-to-end on-boarding experience, walking the customer through his first 6 months
    This has earned us the right to cross-sell to the customer
    Reactive Engagement
    Proactive Engagement
    Providing relevant services to customers through targeted cross sell up sell campaigns
    Exceeded customer’s cross sell sales target by 80%
    Generic Interactions
    Personalized Interactions
    Emphasis on a culture that is inclusive of customers
    One way
    Customer Interaction
    Customer Dialog
    22
  • Learnings
    Success Factor # 1
    Have a vision and sell the vision to get all stakeholders onboard
    Success Factor # 2
    The vision should be broken down to clear manageable initiatives
    Success Factor # 3
    Devil is in the detailed planning and focus on execution
    Success Factor # 4
    Identify success matrix with some linkages to profitability
    Success Factor # 5
    Tracking & reporting results regularly against the success matrix
    Cultural Challenge
    Its about winning people not burning bridges
  • 24
    Thank You
    nigama@alrajhibank.com.sa