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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.

Setting Goals

First Citizens has been using the Perform portion of the MapInfo solution since 2006 in its goal-setting process, Stackhouse relates. "Previously, our goal-setting methodology was very labor intensive, internally and historically focused," she explains. "It didn't help us understand the differences in our markets or establish goals our individual branches could achieve."

Once First Citizens began using MapInfo's solutions, Stackhouse adds, the bank was able to drill down further into its branch segmentation efforts. "We bucketed the branches and used the goal-setting methodology similarly," she comments. "That's why we decided to change. Our branches were growing more sophisticated and diverse -- they didn't like to be lumped into one group or another by the old system. Now we can have as many segments as we have branches. It also went from a two-month-long process to a one-week process."

Stackhouse says the bank is able to arrive at a starting point more quickly, leaving more time to discuss the goals with individual branch managers. "The branches can focus their activity planning more quickly than they once did," she relates. "They see whether opportunities are inside- or outside-sales focused and mine the existing database or find new customers according to their goals."

The results of this change in branch goal setting have been quite favorable, Stackhouse claims. With a clearer segmentation and more focused service goals, the bank has moved from making cold sales calls to calls that are more service/courtesy oriented. "We are seeing ROI on this technology -- we have better retention of healthy balances among those customers we reach out to," Stackhouse asserts.

According to Stackhouse, First Citizens' retention/analytics efforts primarily are focused on the branch and, to some extent, the call center. But other banks, including Fifth Third, are taking a more multichannel approach to analytics. Fifth Third's Dury says the bank rolled out a consistent retention strategy on the Web, on its newer ATMs and at its branches.

Wachovia also is taking a multichannel approach to retention-related analytics efforts. "We already have a central point of contact for all our channels, so we're not siloed," says the bank's Thorpe. "All the channels are our universe for implementing [predictive analytics]."

RBC employs a "channel agnostic" retention strategy, according to the bank's McLaughlin. He points out that RBC uses an architecture in which the pricing is centralized across all channels.

What is most important to remember, says Open Solutions' Nicastro, however, is that no matter which channel is used in a bank's retention strategy, the institution must follow through to the end. "Cross-selling is good, but you can't just be good at the teller line and then let it go," he says. "You need to do follow-up, and that's where these efforts often fall apart. You need follow up in the system."

MORTGAGE BANKERS are analyzing data to get a bigger bang for their relationship buck

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