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Analytics Are Becoming Increasingly Important Tools in Banks’ Customer Retention Strategies

Predictive analytics tools are helping banks understand customers' behaviors and meet their unique needs with tailored products and services, improving customer retention as a result.

Listening to What Customers Have to Say

Large banks, such as Wachovia, Fifth Third and RBC, aren't the only financial institutions that can benefit from predictive analytics. Vectra Bank Colorado ($2.6 billion in assets) is a Denver-based subsidiary of Zions Bancorporation (Salt Lake City; $50.8 billion in assets). Erica McIntire, Vectra's SVP and director of marketing communications, says the community bank also seeks to use analytics to prevent customer defection and boost retention. To improve retention and service, however, Vectra looks beyond what customers do; it also listens to what customers tell the bank, McIntire relates.

Key in Vectra's analytics arsenal is the suite of enterprise feedback management solutions offered by South Jordan, Utah-based Allegiance. Vectra uses the Allegiance Engage platform to capture customer feedback garnered with the vendor's CustomerPulse survey tool. "This tool measures customer engagement and allows us to learn how they feel about our company and the extent to which they are engaged with our company rather than just satisfied with what we're providing," explains McIntire.

"CustomerPulse provides aggregate totals and trend data, which allows us to pinpoint the areas where we're the weakest and where we could put our time, energy and dollars to get maximum improvement," McIntire continues. She notes that the bank is able to drop in "business markers" to measure changes in customer feedback that may result from changes made by the bank.

CustomerPulse, along with CustomerVoice, a feedback tool, are both Web-based and integrate with the bank's existing Web infrastructure, according to McIntire. The CustomerVoice system uses a case management approach to monitoring feedback so customer compliments, concerns or questions are tracked and escalated until a satisfactory result has been achieved, she says, adding that results from CustomerPulse surveys help Vectra identify key drivers that affect customer actions while helping to sort customers by demographics.

Rather than focus on individual customer behavior, First Citizens Bank uses analytics to examine the broader market. According to First Citizens' Stackhouse, the bank uses technology from MapInfo, a Troy, N.Y.-based company that provides location intelligence solutions, to help determine in which of its markets the bank should focus on retention and in which it should focus on acquisition.

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