Vancouver credit union adds some smarts to direct marketing campaigns

Jerome Lengkeek feels the pressure growing. Like many companies these days, Coast Capital Savings is looking to get the most out of its budget in the least amount of time, and with as few people as possible.

As manager of product development analysis for the Vancouver-based credit union, Lengkeek targeted his data analyst as one staffer who could make better use of time and take on more duties. Not that this data analyst was a slacker – the person just didn’t have the right tools.

Canada’s second-largest credit union always tried to be smart about its direct marketing campaigns. But trying to use standard office software such as Microsoft’s Access and Excel to predict the most effective actions just wasn’t very intelligent.

“We just have a couple of us to do this kind of work,” Lengkeek says. “We can’t just add a statistician to the group – we need to find tools that will do it without so significant an investment.”

So the medium-sized company purchased a license to use SAS Enterprise Miner near the end of 2008. The product is part of the Cary, N.C.-based software company SAS Inc.’s line of business intelligence offerings.

Now Coast Capital is digging through past marketing campaigns to discover the most effective techniques. In a couple of months time, it will roll out its first campaign based on research created with Enterprise Miner. The whole idea is to tailor product pitches so the right customers are being sent the right information. It’s a technique proven to improve campaign success rates.

“We need to relate one to one with customers to create relationships,” says Michael Turney, head of strategy and field marketing at SAS Canada. “Enterprise Miner allows you to do that kind of segmentation.”

The software enables companies to look at customers differently and is used for a variety of purposes, including direct marketing campaigns, he adds. Beyond just examining different customer demographics, the analytical tool can expose trends in customer behaviour.

That sort of information helps a business make decisions on which customers to target for specific products.

Coast Capital conducts campaigns for a range of financial products – credit cards, savings accounts, mortgages and more. Lengkeek says the firm has seen success in the past by pitching the right product to the right customer.

“Our previous experiences led us to make this experiment. We thought if we could automate the process, we would see more success from our campaigns.”

One simple example is customers likely to respond to a mortgage offer. Children and seniors are obviously not included in that category. Another more complicated correlation might find that males between 25 and 35 who live in West Vancouver are the most likely type of customer to respond to a pitch for an RSP.

The Data Explorer tool in the software allows users to browse through this sort of multivariate analysis in a visual way, Lengkeek says. A user can see all the variables for a given group of respondents on one screen and understand distributions of age or geography.

“You can see about a dozen different variables — all in a bar chart — with just a couple of clicks,” he says. “When you want to get into more detail, it allows you to take advantage of different statistical tools.”

A Decision Tree tool helps Lengkeek decide what customers to target with a marketing campaign. Similar visually to an upside-down family tree, it breaks down groups to show a selection of the best respondents for a particular campaign.

Coast Capital might just be planning its first campaign using Enterprise Miner, but it is actually about halfway down the road to making best use of business intelligence software, Turney says. The first step any company must take is to collect customer data until it reaches a critical mass that can be put to use, then to consolidate that data so it can be reliably examined and it’s clear that one customer’s data is not fragmented across many different files.

“You try to get a single version of the truth,” he says. In the next phase, Coast Capital doesn’t just plug intelligence into direct marketing, but optimizes that process.”

The credit union could try to balance the likelihood of a customer responding to an offer now, versus a different offer a couple of months later.

Enterprise Miner can be suited for a number of different types of data mining, says Gareth Herschel, research director with analyst firm Gartner Inc. in Stamford, Conn. “It’s Excel on mega-steroids.”

Comparable products include SPSS Inc.’s Clementine and analytics software from Toronto-based Angoss Software Corp. But SAS tends to dominate the market.

“The data mining space is littered with the dead bodies of companies that have tried to go up against SAS,” Herschel says. “The trend over the past few years has been vendors marketing more specific applications targeting business issues.”

SAS has moved to meet that competition with specifically tailored “nodes” or add-ons for Enterprise Miner, Turney says. In the case of Coast Capital, the company may consider the Campaign Management tool to further hone its direct marketing efforts.

The tool is available in a suite dubbed SAS Marketing Automation, he adds. Users include companies like Canadian Tire and Rogers Communications Inc.

For now, Lengkeek is looking forward to launching his first direct marketing campaign since purchasing Enterprise Miner.

Work towards the mail-out will begin in a couple of weeks.  

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Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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