Data Discovery Process for Marketing StrategiesWhen developing effective marketing strategies whether it’s for financial institutions or other industries, there are many factors that can help you narrow in on your best opportunities. To help you get there data discovery should be part of your journey.
Why should FI marketers complete a data discovery process?
- Helps prioritize your marketing initiatives for developing your market plans
- It leads to a final stage of recommendations and outcomes that places value on each recommended marketing initiative
- Sets you up to automate your next best action in real-time-based key attributes such as high value or change in value among your customers
- Can be a turnkey type of solution when developing marketing strategies based on segments and their overall value
Deep Dive into Data Discovery for Financial InstitutionsThe data discovery exercise has now been recognized as a core business discipline for any organization that is commencing its journey toward a more data-driven business strategy. At a high level, the 4 stage concept can be considered to be ubiquitous for all industries. But within these 4 stages, the specific tasks and activities can be quite different for specific industries and in fact for specific companies. The concept of customer value for a bank or FI can be quite unique due to its complexity. For example, customer value can be quite simple for a retailer as it can be determined based on customer purchases. In other industries such as insurance, the premiums of the policyholder are what determines value. However, the risk element is more significant in how these premiums are priced which adds another level of complexity. For banks, though, there are many layers of complexity which will be discussed as we go through the 4 stage process.
First Stage: PreparationIn the first stage of preparation, a series of meetings are established with key stakeholders of the bank. Given that the exercise is to define value, a number of meetings would be set up across a variety of different areas within the bank:
- Personal Loans
- Retail banking(Deposits/Withdrawals)
- Credit Card
Second Stage: The Data AuditOnce we understand the mechanics of how we calculate customer value, we then need to conduct the second phase of the project which is the data audit. In this phase, we would be looking at every field from each file to understand its usefulness and reliability in calculating customer value. The data audit would also reveal how we can link all this data so as to obtain that one view of the customer which can be used to calculate customer value. The end deliverable here would be to link all the required information from these disparate areas of the bank into one overall algorithm. This sounds easier said than done as much of the hard work in this exercise occurs within this data-intensive stage.
Third Stage: Preliminary AnalysisAt this point, we enter stage 3 which is the preliminary analysis. It is at this point where can identify our high-value customers i.e. how much do high-value customers contribute in value relative to the entire base? See the below chart for example:From the above chart, our top 20% of high-value customers contribute 69% of all the value. Now that we have identified them, can we further explore what they look like in terms of what is contributing to customer value.
|Decile||Value Segment||% Purchase Amount||% Interest||% Credit Loss||% Card Fees|
Final Stage: RecommendationsThis leads us to the final stage or recommendation stage where with our analytical outcomes from stage3, we can now develop a roadmap that actually places a value on each recommended initiative. It is this roadmap that allows us to prioritize initiatives and the development of a marketing plan. With these stages now completed, we can automate these processes such that high value and change in value can be determined in real-time. This can be a turnkey type of solution with marketing developing strategies based on these segments and their overall value. Although the end game here is extremely attractive for marketers, no one should underestimate the amount of upfront work in the development of these analytical outcomes. But to use that tried and true old phase which is very appropriate here: “No pain, no gain”.
Over 40 Years of FI Marketing Experience