Tag Archives: Marketing

Customer Engagement Challenges Banks Face in Acquiring Customers in a Digital-first Era

Banks and customers

In my role at FICO I have the privilege of engaging in strategic planning discussions with senior banking executives across the globe. Most of these meetings as of late are similar: We are improving the customer on-boarding user experience, both through improved user interfaces, but also through improved analytics to bring everything we know about the customer to bear in our interaction…regardless of product line or channel. Right now we are working on our data lake. At which point, I nod. Then I ask: OK, so who is in charge of the customer journey that you are transforming? At a strategic level, banks understand the challenge they are facing and where their organizations need to go in order to thrive. At a tactical level, the decisions become much more complicated. Who owns the customer? Is that new data source worth the risk of potentially slowing down my origination process? How seriously... [Read More]

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Customer Engagement Analytics That Fuel Loyalty – A Client Success Story

Grocery loyalty image

We’ve been blogging about a Canadian grocer that is changing the game with its analytics-driven loyalty program. For its +9 million loyalty members, personalized offers are so relevant, it’s almost like having an old-fashioned relationship with the corner grocer. In this new-fashioned relationship, however, members can redeem their offers at more than a thousand stores of various types, in many locations across Canada. What’s this grocer’s secret to success? Here’s a peek inside the analytics. Understanding customers as more than strings of transactions Delivering a personally unique set of relevant offers every week on such massive scale is a computationally demanding, mathematically intense undertaking. The heavy lifting is performed by over 4,000 time-to-event (TTE) predictive models, generated and updated every four months by a FICO-built analytic “factory.” Each TTE model predicts the propensity of a customer to purchase a particular product — say, a specific brand of laundry detergent —... [Read More]

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Customer Engagement Case Study Spotlight: Thinking Differently About Loyalty

Grocery loyalty image

Retail loyalty programs are ubiquitous and predictable — except in the Canadian grocery space. Here, a large retailer is changing the game, transforming what customers expect from loyalty programs and what retailers can accomplish with them. In 2013, when a major Canadian grocer was preparing to launch its first loyalty program, millions of Canadians already had loyalty cards from other grocers — yet grocery sales dropped 0.4% industry-wide. Clearly, there had to be a better way than the largely indistinguishable approach taken by competitors. The grocer decided to take a different path, turning to FICO for advanced analytics to fuel its loyalty program. Predictive and prescriptive analytics determine how to make the best use of available marketing funds. Instead of indiscriminately dispensing points for every dollar spent, the program gives offers and rewards to customers based on a multidimensional understanding of individual shopping behavior. Instead of cross-selling aimed at loading... [Read More]

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Customer Engagement When Loyalty Is Rocket Science


How do you launch a new loyalty program in a saturated market during one of the worst years for grocery sales in decades…and rocket to success? By making relevance to individual customers the core fuel of everything you do. Case in point: a Canadian grocer’s loyalty program is using sophisticated analytics to identify — from more than 380 billion possible offer combinations — the handful of offers that will be most relevant and appreciated by each customer for the upcoming week. The program is a game changer not only for its ability to anticipate customer needs, point sensitivities and even product sentiments, but also because it’s purely digital. Customers receive offers, along with recipes and other information, via the website, email or mobile app. The loyalty program, which rocketed to near the top of the nation’s grocery programs in just one year, is also changing the economics of cultivating loyalty.... [Read More]

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Customer Engagement True One-to-One Marketing or 50 Shades of Grey


Have you ever heard the phrase “true one-to-one marketing?” I always want to know what separates plain old one-to-one marketing from true one-to-one marketing. And better yet, is it worth it? My first decade of work experience was in finance. As great as marketing ideas sound I am always doing the math in my head as to whether or not the proposed solution is worth the investment.  At the end of the day each investment needs to have a payoff. Now some results will take longer to realize than others and it is prudent to be patient but sooner or later the money has to come home. So what is one-to-one marketing? One-to-one marketing is a customer engagement strategy emphasizing personalized interactions with customers.  But here is where it goes from black and white to mostly 50 shades of grey. There are many different forms of personalization that marketing can... [Read More]

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Customer Engagement How to Ensure Relevance and ROI with Discount Offers


In the world of customer centric targeted marketing, the biggest challenge that marketers face is that of balancing relevance with return on the investment (ROI). Relevance implies that the targeted message speaks to the targeted customer, both in terms of content as well as timing. For example, if a bank reaches out to a customer with a message about taking out a mortgage at an attractive interest rate, it would be relevant only if the customer needs the mortgage in the near future. An irrelevant message can turn off potential customers and can do more harm than good. Predicting the Right Timing This problem is a predictive problem where one not only needs to predict the likelihood that the customer would require a mortgage, but also get the timing right. Target the customer too early with a mortgage offer when she is not yet ready for the offer, and it’s... [Read More]

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Customer Engagement Mobile, Banking and Millennials – Not What You Might Think


Many are saying mobile, mobile, mobile as the way banks must transact and communicate with Millennials. Mobile is certainly important, but FICO’s recent study of US banking consumers tells a more complex story. While it is true that smartphone and tablet usage are significantly higher than with Boomers or Generation X, as you dig into how they actual are banking and want to bank, the story isn’t all mobile. PCs/Laptops Trump Smartphones When you look at device usage, Millennials use PCs/laptops at rates similar to smartphones. Some 96% of Millennials regularly use PCs/laptops, and 90% regularly use smartphones; this drops to 63% for tablets. Some 70% of Generation X (35-49 year olds) regularly use smartphones, compared to 98% for PCs/laptops. Mobile Apps – Not for all Millennials Millenials (at 26%) are far more likely to use a bank’s mobile application than Generation X (12%) or Boomers (3%). However, when looking... [Read More]

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Customer Engagement FICO World Preview: Is Your Customer Engagement Compliant?


Emerging technologies are improving the ways companies contact and communicate with customers. But just when technology is making it easier to deliver “right message, right time, right channel,” a changing regulatory landscape is adding new layers of complexity. While managing customer engagement strategies for customer service, fraud detection, marketing and debt collection, companies face a number of regulatory landmines. How you handle these myriad regulations depends on a number of factors. Regulations vary by communications type—for example, there are different rules for customer contact via email vs. mobile phone. Regulations also vary according to where you send the message (e.g., home vs. business), how you got the consumer contact information, the purpose of the communications and whether the contact is permissions-based. So what’s a compliance-flummoxed company to do? For ideas, watch the on-demand FICO World Preview Webinar, “Customer Communications: Clearing the Regulatory Hurdles.” In it, FICO’s Vance Gudmundsen, Regulatory Counsel,... [Read More]

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Customer Engagement 3 Keys to Market Banking to Millennials

Millennial Report - Options and Opportunities

Most banks know that Millennials have their own unique preferences and communication styles that are different from other generations. What banks may not know is how to leverage these preferences in ways that can increase revenue and generate new business. A newly published FICO Banking Engagement Survey Report provides insight about how Millennials bank and identifies some of the best ways for banks to meet the opportunity that this new and growing customer segment presents. The report captures findings from a recent FICO survey of nearly 1000 US bank customers. The survey results point to how Millennials tend to seek recommendations from friends when making a banking decision. They, in turn, are more likely to recommend their banks than any other age group. Of course, they leverage digital channels for this research and sharing. And with Millennials’ youth comes a more transitory nature. The survey indicates that Millennials are five... [Read More]

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Customer Engagement Are US Banks Under-Leveraging Customer Loyalty?


We recently wrapped up a comprehensive survey of retail bank customers in the US. The results were fascinating and not necessarily what we expected. After talking with nearly 1,000 consumers, it seems US banks may be under-leveraging their biggest assets—loyal customers. Banks are missing out on vast opportunities to drive revenue from cross-selling consumers who are more than willing to pull the trigger. Consumers, on average, are using 6.05 banking services, but only about half (3.37 on average) are provided by their primary banks—that is, the bank where they keep their checking account. Moreover, only 30% of consumers surveyed have relationships with their primary banks that extend beyond checking, debit and savings. Some 78% of consumers surveyed say they are satisfied with their primary banks, and half have done business with them for more than a decade. Still, consumers are going elsewhere for credit cards (42%), mortgages (24%), car loans... [Read More]

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