Thanks to analytics, Canadian Imperial Bank of Commerce (CIBC) has a much better idea of where its travel rewards program customers are headed these days.

Not the destinations they’re heading to on accumulated travel points, but where they’re going in terms of their needs, preferences, and behaviour as customers.

“There’s a lot of buzz around big data and analytics,” says Jose Ribau, vice-president of client and competitive insights at CIBC. “To build better relationships with our clients we wanted to demonstrate one fundamental thing: that we know them.”

CIBC pondered how to do this as it introduced something new last year: a travel rewards credit card brand called Aventura. At the same time, it wondered if there was a better way to tap into the business value of something older: years of customer data collected across the bank’s credit card portfolio.

“What else is out there that we could be doing differently? Are we sitting on under-utilized data that could complement (new metrics) and do an even better job?” Ribau recalls of the discussion within CIBC.

The bank turned to U.S. firm FICO. Founded in 1956, it’s best known for calculating credit scores. Today its business analytics programs help companies gauge consumers’ preferences, predict their future behaviour, and tailor customer service and marketing to them accordingly.

“What is relatively new is applying this level of sophistication with this amount of data to personalize offers and messages to consumers based on their day-to-day behaviour,” says Ana Marcos, client services partner, marketing and mobility solutions at FICO.

By providing a more personalized client experience, CIBC hoped to retain customer loyalty for its outgoing Aeroplan program while launching the new one called Aventura.

FICO used various algorithms and created a database of over 7,000 information variables to produce metrics on CIBC’s travel rewards clientele. Based on transaction data – such as how often a customer checked their credit card balance, paid it down or used the card to make purchases – FICO “could monitor where a client was starting to disengage, maybe because they were considering using (another loyalty card),” says Marcos.

“We rank order the client according to their level of relationship (with CIBC) and their risk of taking a certain action,” adds Ribau. If a client’s engagement level is low enough to suggest they might close their account, “we develop an outbound campaign to reach out to those clients” via email or phone, he says.

FICO used CIBC’s existing pool of customer data to ensure the email or call was relevant to each client’s profile and preferences.

Did it work? Ribau says the number of clients signing up for offers made during the FICO pilot project increased by “greater than three per cent.” CIBC has also seen “cross-sell rates as high as 11 per cent for the customers we’ve engaged with,” he adds. (That measures how successfully the bank up-sold existing clients on additional products.)

Results are in: personalization is good for ROI

CIBC isn’t the only business seeing results from personalization. In a 2013 Econsultancy survey of 1,100 marketers worldwide, 59 per cent said personalization provides “good ROI.” In the same study, businesses that personalized web experiences reported an average jump in sales of 19 per cent.

Customers can view personalization differently, however. When Adobe surveyed 8,750 consumers worldwide last year, 68 per cent agreed “it’s creepy” when companies target ads to individuals based on their behaviour. In another 2013 survey by Lyris, 63 per cent of consumers said personalization is now so common they’ve grown numb to it.

“There’s a fine line between being relevant and crossing over and becoming annoying to clients,” Ribau acknowledges. If CIBC engages a customer in ways they don’t prefer, “we have the ability with the frontline (service) agents to make a note of that in your profile,” he says. He adds that CIBC’s privacy policies are always disclosed to customers whenever they sign up for a product or service.

Still, why do some companies find it tough to personalize without turning customers off? Legacy technology is one reason, says branding expert Minter Dial.

“They’re trying to retrofit the CRM program they bought 10 years ago for the new (omni-channel) model with the new demands of consumers,” says Dial, president of the Paris-based digital branding agency The Myndset Company.

In addition, he says companies that focus more on short-term customer acquisition vs. long-term retention can get fixated on technology – and forget their core customer.

“(They) fall into (asking) ‘What type of technology should we buy?’ before asking ‘What are we trying to achieve and who are we trying to achieve it for?’” says Dial, former head of business development at L’Oreal’s global e-business division. (He was also Montreal-based managing director of L’Oreal Canada’s professional products division from 2003 to 2006.)

Personalized marketing should be… personal

For companies worried about bombarding clients with personalized offers, Dial has some advice: try to keep customer service in-house instead of outsourcing it, and share customer information cohesively among your various business divisions.

“Are they organized in a way that makes it simple for the company to have a single customer view? Or for the customer to have a (consistent) view of the company?” Dial asks.

The 2013 Lyris survey suggests there’s room for improvement on that front. Only 27 per cent of marketers said they always integrate customer data from various sources into a centralized customer database.

CIBC is still reviewing results from its FICO analytics pilot project. When asked to assess its overall effectiveness, however, Ribau provides proof that’s personal, not just statistical. A client contacted by phone during the program ended up making an appointment to review their mortgage because they’d just undergone “a significant life change,” says Ribau.

That, he says, is exactly how it’s supposed to work.

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  • Michelle K

    In July 2015 I walked into a Tim Hortons in Vancouver, BC. While I was enjoying my coffee, I was approached by a young gentleman who asked if I would participate in a survey. His DID NOT at any time say he was representing CIBC. I was told I was going to get some coupons from Tim Horton’s for participating in this survey. Please be WARNED that they took this information that was collected for a “survey” and then handed over to CIBC to their credit card department in order to apply for a credit card which I did not authorize or want. I have been getting the run around from CIBC for over four months and discovered that they are storing my personal information which I did not authorize that to do so. According to CIBC, they will be storing my personal information for 6 years. CIBC will do absolutely NOTHING FOR THE CONSUMER!!