Forget focus groups. Instead, watch what your customers are doing. That’s the thinking behind Synapse Technology’s Event Based Marketing solution (EBM) and the concept of Right Time Selling.
Every night, its application, built on SQL Server and .NET, reviews up to 25 months of customer loan and deposit records hunting for significant departures from a customer’s general practices, such as a $50,000 deposit hitting an account which has never seen more than $5,000 inflows at any one time.
The information is sent to a customer service or branch rep who follows up with a soft call to ask how the customer is doing, and whether the bank might provide any new services or advice. That’s the most effective way to use the information, said Mike Berry, senior vice president for financial services at Synapse, because it doesn’t make the customer feel the bank is invading their privacy.
The key to making event-based marketing work is to notice the event that counts, and respond to it quickly. Previous event monitoring applications might run a monthly scan. It could show an account had $1,500 in it at the beginning, and $1,600 at the end of the month while completely missing the $50,000 that had come in and then been sent off to Vanguard or Schwab.
It might also miss the lack of a regular payroll deposit, an early indication that a customer might be about to leave the bank. Running Synapse daily can cut attrition by a third, and grow deposits with actions such as calling customers when a CD is about to mature, ensuring those funds stay with the bank.
User screens show the client’s historical behavior (up to 25 months) so the customer service and branch reps have a background when they place a call.
“Employees like to understand why they have this lead and what’s behind it,” Berry explained. A simple slider bar lets the CSR or branch sales rep go back and forth through the client history easily.
SynapseEBM has been built with highly efficient Microsoft technology. Statistical analysis, forecasting and anomaly detection are fundamental to the SynapseEBM solution and use of Microsoft C# and the .NET Framework allows the solution’s Pattern Evaluator module to accomplish this very efficiently. For example, on a single 3.6 Ghz CPU Dell server with 2GB of memory, one instance of Synapse’s Pattern Evaluator executable running in single-threaded mode can process up to 55,000 transactions per second.
In analyzing data from three of its customers, Synapse found that deposit growth averaged 3.9 percent. This figure represents new and retained deposit dollars above any other deposit growth, validated closely through analysis of test and control group behaviors. For every $1 billion in deposits, clients in the analysis group saw real annual deposit lift.
“For all but the largest banks, net interest margins and fees on deposit products account for 90 percent of total income,” said Tom Richards, principal of The Crossroad Group, a consultancy dedicated to fulfilling the promise of CRM for financial services firms. “So despite the emphasis on new services as sources of income, retaining deposits is still the primary focus for managing margins and growing profitability. Securing these deposits is behind the industry’s current emphasis on cross-selling. The hope is that the statistical relationship between services-per-household and retention will reduce deposit churn, but somehow the averages continue to resist the industry’s efforts.”
Banks can learn from customer behavior if they have tools to monitor it on a regular basis.
“Customers may not tell you there’s a problem,” explained Richards, “but their behaviors will let you know. That’s what’s so important about detection technologies like those from Synapse Technology.”
The South Financial Group, with $15 billion in assets, went live in March of this year with its SynapseEBM solution as the foundation for an integrated customer information and lead management system in its 165-retail branches in the Carolinas and Florida.
“We were looking for a solution that would enhance our ability to better understand and react to the needs of our customers on a daily basis,” said Quintin S. Sykes, executive vice president and chief information officer. “Having a single, integrated platform that combines customer information, analytics, sales tracking and robust lead management capabilities enables us to act on sales and service opportunities as soon as they arise. In addition, the open database structure of the Synapse solution facilitates integration with our management reporting systems.”
www.synapsetechnology.com
www.thesouthgroup.com