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Stories from the battlefield:
How Al Rajhi transformed itself through
customer management analytics
Anand Nigam
Head of Ma...
2
Are we prepared for the
challenges of
customer era?
Customer needs are ever evolving …
How well placed are we in
predict...
The dawn of the ‘Customer Era’ has thrown up a few challenges
3
…Customers have more
information on their
fingertips, Data...
Banking needs of customers
Transaction
Needs
Credit Needs /
Borrowing
Security &
Insurance
Needs
Savings &
Investment
Need...
Banking needs of customers are very diverse … and keep evolving depending
on their progress in lifestage, wealth, risk app...
Banking needs of customers are very diverse … and keep evolving depending
on their progress in lifestage, wealth, risk app...
7
Al Rajhi Bank has done well in servicing
walk-in customers capitalizing on its brand pull, process efficiencies &
large ...
8
“Al Rajhi’s vision is to be the
market leader in customer
lifecycle management in the
region…
This involves ability to m...
9
Assets
Credit Cards
Insurance
Liabilities
-
- Sell loan for a second car
- Sell a Watani top-up
- Prevent
foreclosure
--...
To implement this vision, we had to work across all key
components …
10
Dedicated analytics marketing team (including
cons...
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
Incrementalbookings
fromanalyticsbase
R...
We kick-started our analytics journey by launching multiple
targeted campaigns for cross-sell of asset products to checkin...
14
We started with collating data from all sources, and created an
analytical data-mart
Deposits
Products
Transactions
Wat...
15
We developed several analytics models and improvised on
them over time
2
Segmentation models
Next-best Cross-sell model...
16
We developed several analytics models and improvised on
them over time
2
Segmentation models
Next-best Cross-sell model...
Suitable campaign execution channels were selected to
optimize channel level RoI
Tele
Marketing
SMS & E-
mail
E-mail
Custo...
Control & Test groups were carefully designed to track
campaign results
C R E D I T F I L T E R*
Propensity of taking the ...
An E2E process for campaign tracking was developed and
executed
19
4
 Every campaign was
tracked for 3 months
post launch...
20
Significant progress was made and communicated across all
initiatives with good results against a pre-defined success m...
While implementing analytics within the bank, we are in the
process of establishing a fact based culture
21
Structured Mod...
22
…and we are currently transforming our organization for facing
the customer era by making every customer interaction co...
Learnings
Have a vision and sell the vision to get all stakeholders onboard
The vision should be broken down to clear mana...
24
Thank You
nigama@alrajhibank.com.sa
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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.

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Successful Implementation Of Customer Lifecycle Management And Crosssell

  1. 1. Stories from the battlefield: How Al Rajhi transformed itself through customer management analytics Anand Nigam Head of Market Insights and Analytics, Al Rajhi Bank
  2. 2. 2 Are we prepared for the challenges of customer era? Customer needs are ever evolving … How well placed are we in predicting Customer needs and proactively managing customer value?
  3. 3. The dawn of the ‘Customer Era’ has thrown up a few challenges 3 …Customers have more information on their fingertips, Data on anything and everything is easily available …Customers are plugged-in everywhere and seek instant gratification …Customers trust their social networks and not brands … Customers face paradox of choice (more choice – more confusion), hampering decision making Dawnofthe‘CustomerEra’ How to provide information on everything & at the same time build any emotional quotient with customers? How to adopt this reality in day-to-day operations? How to have more ‘instant’ & relevant conversations with customers? How to simplify products and services that aid in faster decision making? Challenges faced by firmsCharacterized by… … more ‘informed’ …more ‘Connected’ …‘Always ON’ …looking for ‘Simplicity’ Customers are…
  4. 4. Banking needs of customers Transaction Needs Credit Needs / Borrowing Security & Insurance Needs Savings & Investment Needs Core Needs The Circle of Financial Needs
  5. 5. Banking needs of customers are very diverse … and keep evolving depending on their progress in lifestage, wealth, risk appetite, acceptance of technology … • Securing life • Securing health • For future • For business • For purchase • For education • For retirement • For emergency • Travel / Holidays • Personal need • Auto, Home • Marriage • Education • Travel / holiday • Cash transactions • Overseas transactions • Local & international Payments • Govt. payments • Online • Transfers Transaction Needs Credit Needs / Borrowing Security & Insurance Needs Savings & Investment Needs • Securing property • Securing travel • Securing from theft and fire. Core Needs Evolved Needs Evolved Needs The Circle of Financial Needs • Business • Quick Cash
  6. 6. Banking needs of customers are very diverse … and keep evolving depending on their progress in lifestage, wealth, risk appetite, acceptance of technology … …and if we don’t give attention to little details, we have lost their attention. • Securing life • Securing health • For future • For business • For purchase • For education • For retirement • For emergency • Travel / Holidays • Personal need • Auto, Home • Marriage • Education • Travel / holiday • Cash transactions • Overseas transactions • Local & international Payments • Govt. payments • Online • Transfers Transaction Needs Credit Needs / Borrowing Security & Insurance Needs Savings & Investment Needs • Securing property • Securing travel • Securing from theft and fire. • Personal loan • Home loan • Auto loan • Business loan • Education loan • Overdraft • Cash advance • Life insurance • Medical insurance • Property insurance • Car insurance • Travel insurance • Theft & fire insurance • Cash withdrawal • Credit cards • Cheque / drafts • Remittance • Internet banking • Standing orders • Phone banking • Mobile banking • Bank account • Time deposits • Recurring deposits • Mutual funds • Stocks / shares • Bonds • Property investment Core Needs Product Manifestations Product Manifestations The Circle of Financial Needs • Business • Quick Cash Evolved Needs Evolved Needs
  7. 7. 7 Al Rajhi Bank has done well in servicing walk-in customers 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 Customer Lifecycle Management Program. Today we will take you through the key highlights and success factors in implementing this program.
  8. 8. 8 “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” We set out with a holistic customer centric vision … 1 2 3 4
  9. 9. 9 Assets Credit Cards Insurance Liabilities - - Sell loan for a second car - Sell a Watani top-up - Prevent foreclosure -- Sell loans - - Increase insurance holding - Retain customers -- Sell insurance - 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 - On-board and activate customers - Increase spends and utilization - Increase credit lines -Prevent attrition - Activate customers - Increase loyalty - Sell credit cards Customer Lifecycle Management - Mass - Affluent - Private ACQUISITION ACTIVATION VALUE MANAGEMENT RETENTION RE- ACTIVATION Customer Management - Customer Insights - Customer Segmentation Campaign Management - Develop - Execute - Track & Report CRM Integration - One view of customer - All push and pull channels - Automated and optimized The Vision was translated into specific initiatives for managing customer lifecycle under “House of Analytics” framework. 1 customer lifecycle 2 fullsuiteof productsandservices all banking channels3 4 automated technology and efficient processes
  10. 10. 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 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 Set-up a separate data-mart to enable analytics
  11. 11. We will deep-dive into one initiative as an illustration of work done 11 Cross-Sell Program
  12. 12. We have already achieved significant results across KPIs in the Cross-sell program Incrementalbookings fromanalyticsbase RESULTS Above the monthly targets Beat the 2009 targets by 80% 5 months from start of campaign 6 months from start of campaign 12
  13. 13. We kick-started our analytics journey by launching multiple targeted campaigns for cross-sell of asset products to checking customers… 13 Data Setup Model development Campaign launch Campaign execution and tracking Revenue realization • Test and control mechanism developed • More than 25 campaigns launched • Optimized on channels for campaigns • Campaign scripts optimized • Lead management system developed • Out-bound callers trained • Several analytical models developed • Beat target by over 80% in 2009 & 1st qtr 2010 • Data-Mart setup which is refreshed every month  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 1 2 3 4
  14. 14. 14 We started with collating data from all sources, and created an analytical data-mart Deposits Products Transactions Watani Mortgage Auto Finance/ Leasing Demographics Comprehensive Data-mart Customer Analytics Campaign Management Credit Cards Deposits Credit Cards ATM Branch Mubasher Credit Filters Contact information from different sources The Data-Mart is refreshed every month 1
  15. 15. 15 We developed several analytics models and improvised on them over time 2 Segmentation models Next-best Cross-sell model Predictive models Decision tree models Look-alike models Customer Lifetime Value model
  16. 16. 16 We developed several analytics models and improvised on them over time 2 Segmentation models Next-best Cross-sell model Predictive models Decision tree models Look-alike models Customer Lifetime Value model Helped us in understanding customer needs and predicting behaviour
  17. 17. Suitable campaign execution channels were selected to optimize channel level RoI Tele Marketing SMS & E- mail E-mail Customer Propensity Customers were rank ordered based on their propensity to respond to the X-sell Campaign Least Expensive Channel Most Expensive Channel Outbound Call Center Email & SMS Script • Professionally designed call script • Trained agents to handle FAQs from customers Scripts designed in the systematic & structured way • Random calling without any proper script • Agents not trained to manage various situations Scripts were designed in an ad-hoc way Before... After... 17 3 Set-up a structured process to implement the campaigns
  18. 18. Control & Test groups were carefully designed to track campaign results C R E D I T F I L T E R* Propensity of taking the product HighLow Low Propensity Customers High Propensity Customers Test Group, T Random sample Control Group, C2 Control Group, C1 High Propensity Customers Low Propensity Customers * Except the SIMAH check 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 BAU conversion Efficiency through modeling & analysis Incremental conversion due to campaign offer 18 4
  19. 19. An E2E process for campaign tracking was developed and executed 19 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
  20. 20. 20 Significant progress was made and communicated across all initiatives with good results against a pre-defined success matrix Acquisition - Cross Selling Activation - New Customer On boarding Attrition - Account Depletion © 2010 IBM Corporation 212 321 498 691 832 935 500 170 400 620 851 1,302 1,400 1,922 2,176 2,301 1,500 2,500 0 500 1000 1500 2000 2500 3000 Jun'09 Jul'09 Aug'09 Sep'09 Oct'09 Nov'09 Dec'09 2009Target Jan'10 Feb'10 Mar'10 Apr'10 May'10 Jun'10 Jul'10 Aug'10 Sep'10 2010Target 2010revised target Hypotheticalnumbersfor illustrativepurpose Above the monthly targets Beat the 2009 targets by 80% 5 months from start of campaign 6 months from start of campaign BUSINESS RESULTS EXECUTION TRACKING Low Propensity Control High Propensity Control High Propensity Target C2 % C1 % T1 % Lift due to Modeling Lift due to Campaign X% Natural Conversions Natural + Execution led Conversions This represents the converted customers due to the project => Booked amount due to the project Conversion here is BAU conversion Conversion here is due to efficiency through modeling Incremental conversion over & above C1 will be due to campaign offer REPORTING Dashboards for regular reporting • Sales: Incremental sales of SR2.3bn • 30+ campaigns run • Products: Credit cards added to consumer finance cross sell • Execution: SMS and Outbound Calls © 2010 IBM Corporation …with well defined activities in the window of 180 days Welcome Day 1 Week 1 Week 2 1 to 3 months 3 to 6 months • Account opening • Welcome kit delivery • Issue ATM Card • Spend quality time with the customer to understand the need and explain the relevant products and features • Outline the benefit of Salary transfer • Guide customer on Mubasher usage • Thank you letter/email/SMS Account opening Welcome SMS Welcome Email • Welcome Email Engagement • Bill payment offer • Offers on debit card usage at POS • Follow up calls if customer still inactive on Mubasher • Check on Salary transfer Cross-Sell • Customized Cross Sell offer through direct mail/email/ SMS • Offer Prepaid card • Address needs of customers who decrease their balance by more than [70]% Earn the ‘right’ to X-sell X-sell/Up sell programs 1 Engage Activate • Objective to accelerate customer profitability through managed engagement • Performance metrics based on salary transfer, online usage, cross sell • Silent attrition identified as significant point of investigation • Internal analysis combined with customer research to identify root causes © 2010 IBM Corporation We analyzed our customer base to understand if balance depletion was due to account closures or silent balance reduction… 12.0% 1.0% 0% 5% 10% 15% Average US Banks Al-Rajhi Bank Attrition Rate (Account Closure) We undertook surveys to understand the reasons why customers reduced their account balance Al Rajhi’s account closure rate is much lower than that of the average bank in a developed country, and hence not a concern area Silent balance reduction forms a major reason for overall balance depletion 20 Value Management - Credit Card Segmentation • Understanding of customer segments in terms of usage and revenue • Foundation laid for 2011 credit card portfolio management strategy © 2010 IBM Corporation1 ANNUAL POS SPENDS 0 < 9,187 SR 9,187 – 18,247 SR 18,247 – 38,401 SR >38,401 SR ANNUALPOSTRANSACTIONS >78 0.1% 0.7% 1.0% 0.6% 42 - 77 1.2% 2.1% 1.4% 0.4% 20 - 41 5.2% 3.0% 1.2% 0.3% 1 - 19 40.0% 3.0% 0.9% 0.2% ATM only 7.6% Inactive 31.1% A1 A2 A3 A4 B1 B2 B3 B4 C1 C2 C3 C4 D1 D2 D3 D4 A I CUSTOMER BASE Total base = 315 K customers A1 – A2 and B1 – B2 customers should be maintained well C1 – D1 and D1 – D2 customers should be moved towards higher spends D4 and I need to be activated
  21. 21. While implementing analytics within the bank, we are in the process of establishing a fact based culture 21 Structured Model to change organizational mindset… Dedicated analytics marketing team (including consultants) + involved other teams within bank such as products & channels Rigorous data, campaign management and reporting process put in place Clear goals and plans incorporated by all teams Supported by 'soft approach' to make the team understand and implement the change …
  22. 22. 22 …and we are currently transforming our organization for facing the customer era by making every customer interaction count 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 Providing relevant services to customers through targeted cross sell up sell campaigns Exceeded customer’s cross sell sales target by 80% Emphasis on a culture that is inclusive of customers Reactive Engagement Proactive Engagement Generic Interactions Personalized Interactions One way Customer Interaction Customer Dialog From… To…
  23. 23. Learnings Have a vision and sell the vision to get all stakeholders onboard The vision should be broken down to clear manageable initiatives Identify success matrix with some linkages to profitability Tracking & reporting results regularly against the success matrix Devil is in the detailed planning and focus on execution Its about winning people not burning bridges
  24. 24. 24 Thank You nigama@alrajhibank.com.sa

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