This document summarizes a presentation on using member data to strengthen the bottom line. It discusses using relevant data to better target marketing and identifies several priority and secondary strategies. The priority strategies focus on laser-focused retention of top clients, maximizing wallet share through identifying gaps, improving new client development, promoting bundled checking accounts, and using a logical member growth strategy. Case studies show implementing these strategies can significantly improve revenue and reduce attrition. Secondary strategies include member triage activities and guerrilla prospecting to find new prospects.

1. Uncovering the Secret Within:
Using Member Data to Strengthen Your
Bottom Line.
Presented by
Tricia Donohue – The Marketing Mix
Maria Del Amo – Cathedral Corporation
Steve Miller – Cathedral Corporation
July 10, 2013

7. Relevance is Key
Relevance is the single largest lever on
response in individualized direct marketing.

8. “We are drowning in data but
starving for knowledge”.
John Naisbitt

9. Account & Member
Relative Value
Meaningful Data
Appends
Laser-Focused
Retention
Maximizing
Potential
New Client
Development
Checking
Bundling
Member Triage
Activities
Logical Member
Growth Strategy
+
Guerilla
Prospecting
De-Marketing
New Key Perspectives & High-Impact
Strategies:

10. New Key Perspectives
Account & Member
Relative Value
Meaningful Appended
Data
Behavior-based
using
commonly
available fields
Balance
Interest
Rate
NSF Fees
Core Fees
POS Income
Transaction
Activity
Lifestage
Available Wallet
Age
Income

11. Key Perspective:
Account & Member Value
• Adding a value viewpoint significantly enhances decision-
making
• Behavior-based approach uncovers actionable strategies
to improve the bottom line

12. Key Perspective:
Meaningful Data Appends
P$YCLE : Segmentation system that
groups consumers into 58 segments
based on assets & a wide variety of
financial behavior.
Income Producing Assets (IPA):
Conservative estimate of liquid assets
held by the client. Based on a
correlation with HHs P$CYLE code.
Gap-To-Tap: Difference between a
client’s IPA & the deposit/investment
balances they hold with your
organization

13. Account & Member
Relative Value
Meaningful Data
Appends
Laser-Focused
Retention
Maximizing
Potential
New Client
Development
Checking
Bundling
Logical Member
Growth Strategy
+
Priority Strategies:

14. Priority Strategies:
Laser-Focused Retention
• Top 10% most valuable clients account for 80-
90% of net income; Top 20% for 100% +
• 30% to 50% of these clients are completely
unknown to branch/call center staff
• Average annual attrition for this group is 10-15%

15. Avg Value All Clients =Avg Value All Clients =
$388$388
Avg Value Top Decile =Avg Value Top Decile =
$4,237$4,237
# Top Decile Clients =# Top Decile Clients =
1,2161,216
Annual Top Decile %Annual Top Decile %
Attrition = 13%Attrition = 13%
Annual Top Decile $Annual Top Decile $
Attrition = $670,000Attrition = $670,000
Year 2: ReducedYear 2: Reduced
Attrition to 9% =Attrition to 9% =
$206K in Revenue$206K in Revenue
ImprovementImprovement
Year 1: ReducedYear 1: Reduced
Attrition to 10.5%Attrition to 10.5%
= $129K in Net= $129K in Net
RevenueRevenue
ImprovementImprovement
Priority Strategies:
Laser-Focused Retention: Case Study

16. Priority Strategy:
Laser-Focused Retention: Case Study
• Group “frozen” & tracked each year
• Top Decile indicator on member record
• Commitment from field staff to be very familiar with this
group
• Over-sampled in yearly satisfaction surveys
• Multi-pronged communications plan: direct mail, email,
phone
• Results: Decreased attrition & enhanced bottom line (See
results on previous slide)

17. Priority Strategy:
Maximizing Wallet Share
• All low value/small position clients are not
created equal
• You are likely missing 30-40% of total
wallet – even from the most valuable
clients

18. Priority Strategy:
Maximizing Wallet Share: Case Study
Assets = $625 MillionAssets = $625 Million
Estimated TotalEstimated Total
Opportunity: 3,962Opportunity: 3,962
Clients with $640 MillionClients with $640 Million
Gap-To-TapGap-To-Tap
Final Based on LargeFinal Based on Large
Wallet/Low Risk: 1,125Wallet/Low Risk: 1,125
Clients with $396 MillionClients with $396 Million
Gap-To-TapGap-To-Tap

19. Priority Strategy:
Maximizing Wallet Share: Case Study
• Branch-specific VIP Priority Prospects identified
• Special “under the radar” promotions developed &
consistently delivered via direct marketing (mail,
email, phone) over a 12-month period
• Results: $19,700,000 deposited in promo
accounts – 76% new money

20. Priority Strategy:
New Client Development
• For the past 5-8 years, many organizations have
been more focused on getting the getting the
next new member than expanding the ones they
just won!
• 90 days after acquisition, 75% of new clients
have only a single service

21. Priority Strategy:
New Client Development: Case Study
• 1,237 new consumer clients acquired in the
period analyzed
• After 90 days, 86% had only 1 service; after 6
months, 78% still had only 1 service
• Average consumer client performance ratio = 38%
Net Income of
New Clients ÷
Net Income of
All Clients =
Performance
Ratio

22. Priority Strategy:
New Client Development: Case Study
Estimated Annual # ofEstimated Annual # of
New Clients = 4,900New Clients = 4,900
Average AnnualAverage Annual
Consumer Account NetConsumer Account Net
Income = $285Income = $285
Estimated % SingleEstimated % Single
Service New Clients =Service New Clients =
80%80%

23. Priority Strategy:
New Client Development: Case Study
• New consumer clients assigned to three top-
level categories:
• Specific offers designed for each group based
on onboarding path.
• Results: After 12 months, 16% of former 1-
service clients owned two or more services --
revenue improvement = $169,048
Yes
Checking
No
Checking
Large Gap-
To-Tap

24. Priority Strategy:
Checking Trifecta
• Key to achieving strong non-interest
income for Checking accounts – presence
of priority add-on services:
– Direct Deposit
– POS
– Bill Pay
• Often as important as selling another
service to overall value

25. Priority Strategy:
Checking Trifecta: Case Study
# of Consumer Checking# of Consumer Checking
Clients = 6,479Clients = 6,479
Almost 40% missingAlmost 40% missing
either Direct Deposit oreither Direct Deposit or
Debit ActivityDebit Activity
Average NII forAverage NII for
Checking exponentiallyChecking exponentially
higher when key add-higher when key add-
ons presentons present

26. Priority Strategy:
Checking Trifecta
• Sales associates incented for “out-of-the-
gate” bundling of Direct Deposit & Debit Card
for new Checking clients
• Low-cost communications to current
Checking Clients with cash coupons
executed throughout the year + quarterly
targeted calling blitzes
• Results: Average NII increased by 11% --
adding over $100,000 annually

27. Priority Strategy:
Logical Member Development
Senior Management Directive:
“Grow the Franchise!”
“What am I
working
towards?
“And how
do I get
there?

28. Priority Strategy:
Logical Development: Case Study
Define the ultimate orDefine the ultimate or
“Omega” client“Omega” client
Establish minimalEstablish minimal
number of developmentnumber of development
levelslevels
Assign clients to variousAssign clients to various
levels leading to Omegalevels leading to Omega
statusstatus
Ensure that progressionEnsure that progression
= improvement in= improvement in
profitabilityprofitability

29. Priority Strategy:
Logical Development: Case Study
• Omega level present on all customer
“touchpoints”
– Branch distribution frozen and followed for 12 months
• Additional analysis focuses growth efforts on
members most likely to move up
• Direct marketing strategies identified for each
level
• Results: % of clients in Levels 3+ increased from
27% to 31%

30. Account & Member
Relative Value
Meaningful Data
Appends
Laser-Focused
Retention
Maximizing
Potential
New Client
Development
Checking
Bundling
Member Triage
Activities
Logical Member
Growth Strategy
+
Guerilla
Prospecting
De-Marketing
Secondary Strategies:

31. Priority Strategy:
Member Triage Activities
• Most clients exhibit tell-tale behavior prior to
closing an account or ending a relationship
• More cost-effective to discover/manage
potential client attrition than execute lost
client win-back strategies
Potential
Member
Risk
Potential
Member
Risk
Potential
Account
Risk
Potential
Account
Risk

32. Secondary Strategy:
Guerilla Prospecting
• Uncover & focus on neighborhoods where
you are successful at the desired behavior…
Clients with Home Equity Prospects in That Area…

33. Secondary Strategy:
De-Marketing
• Embrace the truth that you can’t – and
shouldn’t – invest in all members
• Identify & isolate long-term members who are
low value/balance and low potential
• Find low-cost communications alternatives
• Allocate resources to members where
possible return is greater

34. “The purpose of computing is
insight not numbers”.
R.W. Hamming

35. Data Modeling
• Transforms your member information into stronger
relationships that drive business growth through
personalized print and digital media services.
– Provide high-impact client insight
– Align with cost-effective communication programs to fully
leverage this new intelligence
– Drive your data with little impact on your internal resources
• Business results provide the case for doing the work
• Bottom line improvements are the objective

36. Steve Miller
Dir., Financial Services Communications
smiller@cathedralcorporation.com
800-514-0546
Questions? Give us a call!
Maria Del Amo
Dir. New Market Development
mdelamo@cathedralcorporation.com
877-451-2463