Cover Story : Taking It Personal

A variable data mail program pays dividends to Charter Bank

Based on feedback from Charter’s loan officers, Millspaugh framed the messaging sequence around the typical key dates in a mortgage customer relationship, such as the anniversary of the loan date, major holidays and times when people were likely to evaluate their financial needs. As the program continued, she then began to tweak the messaging to be more pertinent to what was going on in the current market. “We talked about being able to refinance, gave some information about credit scores and how we could help customers look at them … so we talked about things that were more relevant in the marketplace. I think that’s the beauty of what we’ve been able to do with a continuity program. Not only is it variable, and we’ve seen incredible success from it, but its ability to be changed with the times has been extraordinarily fruitful.”

Building in the Personalization
Through prior marketing positions at APAC Customer Services and Discover Card/Novus Services, Millspaugh had witnessed the power of personalization in driving response rates—and she knew it was just what Charter needed for this retention program. To foster customer relationships via direct mail, Millspaugh wanted creative that didn’t look like “one in a million pieces of mail sent out by a firm.”

Enter variable data and digital printing technology. Each postcard, folded in half for an in-the-mail size of 5½˝ x 7½˝, is personalized with the mortgage customer’s first name as well as the full name, photo and contact information of the loan officer who sold the loan. Additionally, if a realtor was involved with the mortgage process, the loan officer could choose to include this individual’s information as well. And in the postcard sent around the anniversary date of the loan close, the number of years a customer has been with Charter is highlighted. Finally, the postcards promoting the survey mechanisms feature personalized URLs, or PURLs, to entice response.

Millspaugh credits Trekk for developing a creative format and data structure that is flexible enough to provide continuity in the branding while allowing for variety in the design and creative elements so campaigns are more than, as she puts it, “the color copy of the week.”

Data Imperative
Of course, the heart of a successful variable data campaign is the data. Via the mortgage process, Charter already was collecting quite a bit of information on customers. But to power a retention program, Millspaugh needed an ongoing process for gathering customer feedback that would allow her to target and refine marketing messages over time.

Overall, Charter surveys mortgage customers four times within the three-year program. The first survey is at the close of the loan, a time when Millspaugh says most customers are so excited and relieved that the loan process is finished that the responses tend to skew more positive than might be true. To get a better read on customer satisfaction, she incorporated a follow-up survey into the beginning of the retention program; the results provided ideas for how Charter could fine-tune its loan process and closing procedures. For example, feedback pointed to customer confusion regarding the plethora of loan options available, so Charter developed an online tool customers could use to determine which loan type would best fit their needs.

The final two surveys are sent about 18 months and 30 months into the program cycle to dig deeper into customers’ life changes and needs so Millspaugh can divine what their motivations might be regarding the next mortgage or loan processes. Then, she creates product offers around survey responses.

“I feel like we’re now leading the market, where in the past we were always chasing our tail,” says Millspaugh.

Of course, given the changes in the housing market and economic climate, she recently had to revise these last two surveys to expand on the theme of how mortgage holders might better leverage their assets instead of trading up to bigger houses.

As for results, the numbers don’t lie. The survey promoted a few months into the program pulled a 75 percent return; the one dropped at 18 months drew a 35 percent response—a performance, says Millspaugh, that’s still better than any other survey she’s run prior to this initiative. (Because the program hadn’t reached the 30-month mark as of press time, results were not available for the fourth survey.)

“With data and content at the very center of the marketing universe today, what marketers need to do is collect and warehouse client data and content assets in a content management system so they can identify target audiences—not just for sales message development, but also for channel targeting,” Terry states.

As evidenced by this program, data touchpoints have been key to Millspaugh’s messaging strategy, but they’ve also influenced channel targeting. The most obvious instance is the deployment of the surveys themselves. “Because Charter knows that not every customer is going to go to the Web site to fill out a survey, a paper survey is also provided” based on how that person responded in the past, Terry explains.

On the logistics side, the data is stored on Trekk’s server, but is managed remotely by Charter. This way, Millspaugh can access the program information to make individual status changes, such as when a customer switches mortgage providers and needs to be taken out of the messaging queue.

The centralized database also allows Charter to isolate customer segments for offer targeting via campaigns within the queue or entirely outside of the program. For example, loan officers can leverage the data feedback from the surveys to do pre-emptive strikes, says Millspaugh. If a customer has a hybrid loan that’s about to convert into a variable rate loan, the loan officer can access the customer’s responses regarding future financial goals and then call that client ahead of time with options for moving into a more suitable loan type.

Into the Home Stretch—Sort Of
More than two years into the program, performance is meeting Millspaugh’s expectations.

“Prior to the program, you could generally go back and look at customer retention. It was OK; we probably retained about 50 percent of our customers. Right now, we’re retaining between 81 percent and 90 percent of our customers. Is that 100 percent attributable to the continuity program? It’s the only thing that we’ve added that’s been different,” she notes.

Another success factor is the increased ability to help loan officers conduct those aforementioned pre-emptive strikes. All of Charter’s loan officers participate in the retention program and choose to pay for around 80 percent of their customers to receive the direct mail series. The remaining mortgage holders become what Millspaugh calls “house accounts,” meaning they also get entered into the retention program but receive messaging from the head of Charter’s inside sales group instead of their specific loan officers. So far, the program boasts roughly 9,000 customers.

Both Terry and Millspaugh point to the personalization as a key element to forging a stronger connection to the customer. More specifically, Terry says, it’s the tie-in of the specific loan officer in each of the pieces, which leverages the first and most crucial relationship-building process. And it doesn’t hurt, Millspaugh adds, that the creative messaging is upbeat and lively at a time when people are surrounded by news of doom and gloom. She credits all the above components for the program’s extremely low opt-out rate.

In fact, the program recently expanded to a five-year cycle, reflecting both survey feedback and housing market research that indicates people will stay in their homes longer. Although the New Mexico market is not experiencing the extensive foreclosures or delinquencies that plague the rest of the country, Millspaugh notes, Charter customers are dealing with the challenges of needing to refinance or leverage their homes to provide for other financial needs within the next few years. So the surveys and messaging will be centered on those issues for the foreseeable future.

“You have to be willing to commit to a program like this, to sit back and let it run,” Millspaugh advises. “It’s hard to measure in the short term, but you will start to see strong results at the end of year two and as it goes on.” Charter, for one, is banking on it.

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