CHICAGO—As credit unions continue working to build deeper “engagement” with members, one bank is sharing some insights into its own ongoing “journey” down that same path.
For Atlanta-based SunTrust, the bottom line is the bottom line as it works to build engagement around the idea of “lighting the way to financial well being. At SunTrust, there’s a lot of money to be made in doing that.”
Indeed, the $178-billion bank proects that by growing from 1.6 “needs met per customer” to 2.3 “needs met per customer” it will boost revenue by a quarter-billion dollars.
To do that it needs to be relevant, and the bank has built a regional powerhouse that at first blush would seem to make it “relevant” just by default. But Greg Holzworth, SVP, Client Analytics Group with SunTrust Bank, said relevancy is one of its biggest challenges, as it is for all financial institutions, something he admits he doesn’t understand.
“Banks should be relevant. I don’t know why banks wouldn’t be,” he told BAI’s Retail Delivery Show. “Consumers are looking for help, they engage us frequently, and we have detailed, propriety data. If you look at stress inducers, such as the economy, loss of a job, etc., and the fact research shows many people feel they have no control over their finances, you can see there is a need. We can help them on the path to financial well-being. We have plenty of opportunities to provide impressions. Finally, we all have plenty of detailed financial data, and you put all that together and there is no reason not to be relevant in your messaging. “
Nevertheless, many people still don’t look to their bank to address many of those challenges. In fact, he said, one poll recently revealed that Millennials would rather go to the dentist than go to their banks for help.
The History of the Problem
So why is that ? “I think it comes back to, historically, the direct marketing efforts from banks have had a lack of awareness of when the client is actually in-market.
We do an abysmal job in my opinion of understanding when clients are in-market and when they may be thinking about us. So in order to ensure we communicate with them when they are in-market, we communicate with them all the time, which is expensive, and it makes us look irrelevant.”
In response, SunTrust is building its thought process around two different types of what the bank describes as “circumstances”: “planned-for circumstances,” and “prepare for circumstances.” The latter are the unforeseen emergencies in life.
“When circumstances change it effects the plans people have made and the goals people have set,” said Holzworth. “Marketwide, 38% of clients experience the top five circumstances: retirement or approaching retirement age, job loss, new job, illness of family member or yourself, and home needs expensive repairs.”
Five Circumstances, Five Opportunities
The five circumstances that present the most opportunity to financial institutions, according to Holzworth, are new job, opening a business, job promotion, adopting a child, and marriage.
“How can we build the ability to recognize interaction patterns to understand changing circumstances?,” asked Holworth. In the case of SunTrust, it has built out what it calls the “client path.”
“I want to get in front of those circumstance changes,” Holzworth said. “In that path, we can see certain clues in people’s lives, such as a transfer of funds from an MMA to a checking account. We want to be more of an advisor, rather than just reacting.”
Among the potential “in-market” indicators of a change in circumstances that are being monitored by SunTrust are a home improvement spend, time spent on the banks Resource Center or reviewing mortgage content, and out of market T&E spend, a credit inquiry, overall rising home prices in a market, large change in direct deposit, and new child indicators.
“The problem is a lot of those things don’t happen very frequently,” said Holzworth . “So we look to factor analysis to understand how we might bundle these together and build out one or two attributes that might be more indicative, and then build that into our model.”
Holzman acknowledged that the issue is more complex than just building a model upon certain behavioral changes. “The other difficulty here is a lot of these factors or events are probably indicative of multiple circumstances. There could be multiple reasons for the same things,” he said. “This is why we have to think through and marry these potential indicators. As we build these models we have to change the modeling paradigm. I don’t want to build models predicting behavior next month; I want to build models predicting next week.”
The Overall Objective
Overall, said Holzworth, SunTrust’s objective is this: “I would like to have every customer interaction with SunTrust to be informed with insight. Why would I want to waste one of those contacts?”
But even if a model is developed that does provide solid insights into consumer behavior or interests, Holzworth said there is a new question with which to wrestle: which channel should be used to communicate with the consumer. Data show that frequent users of digital channels, for instance, may visit numerous times per week, meaning they should be communicated with not only in the same channels, but more frequently than a financial institution is accustomed to communicating.
“You know you have four or five times to message them; there are a lot of impressions I can drive,” said Holzworth. “And an issue is frankly, we just need to have more things to say. It’s starting to challenge the old contact caps, that you don’t want to talk to them more than three times pre month. Well, if they’re coming to you every day, you have to.”
As Holzworth acknowledged, creating that content has become a new and endless demand upon the bank, which has tried to lesson the load by getting consumers to tell it what they want to learn more about.
It’s in executing all that, said Holzworth, where the “really hard work comes together” in terms of creating a “fairly holistic contact management process.”
The three pieces to that process, according to Holzworth, are:
- Client Contact Strategy Framework. This involves segment strategies and KPIs, message taxonomy, channels, costs and effectiveness metrics. “As you hear more about omnichannel strategies, this is about choosing the right channel to contact the client.”
- Analytics to Inform Strategy. This involves client segmentation, channel usage and client channel preference, sales, relationships, deepening attribution, and KPI measurement.
- Apparatus to Execute. This involves shared contact and response history, integrated contact decision engine(s), channel integration, and daily outbound campaign list/lead execution.
“Frankly, at SunTrust, our direct message responses were in one data base, our leads and responses in another database, and we couldn’t do anything until we put all of it together. You need to understand what’s happening in each channel.