Channeling the Customer
By Hallie Mummert
Personas and integrated marketing help Sovereign Bank deepen relationships.
Financial institutions, as a whole, often have been characterized as stodgy, pompous and, well, institutional in their marketing approaches.
These attributes no longer fit. Today, banks are catching up to their multichannel compatriots in other business sectors. In some instances, they are even leading the way.
For Sovereign Bank, a $59 billion financial services firm with headquarters in Reading, Pa., and more than 650 banking offices across the Northeastern United States, the overarching goal is to offer the services of a large financial corporation while providing the personal attention of a small, community bank. And the way the firm has chosen to achieve this goal is through customer-centric, multichannel marketing.
This approach does not pay lip service to the idea of customer relationship marketing. To recognize and anticipate its customers' individual financial needs and then deliver custom solutions, Sovereign Bank is investing heavily in an integrated communications process powered by in-depth insight on its customers.
In fact, you could say the firm is banking on this approach to give it the leverage it desires to outperform the 18 organizations that rank ahead of it in the financial sector.
It All Begins Online
In its quest to improve customer knowledge and enhance interactions, Sovereign Bank decided to focus its attention on its Web site first.
"We really believe online banking will increase customers' experience and relationship with the bank," says Marianne Doran-Collins, Sovereign Bank's senior vice president, director of online and affinity.
An independent study by comScore Networks, released in April, supports this theory. According to "Servicing the Online Financial Services Customer," a survey of more than 1,500 U.S. online consumers, online banking customers are likely to be more loyal and have a higher cross-sell rate than offline customers. In addition, comScore Networks reports that those customers using online services tend to be more satisfied with their bank, leading them to recommend the bank's Web site to a friend.
Of course, the obvious link between this kind of customer performance and the online channel is interactivity. Sovereign Bank uses its Web site to collect data from customer interactions that it can combine with other types of research to tailor communications and offerings to customers' needs.
But the most interesting aspect of Sovereign Bank's Web site—which was relaunched in January 2004 and applauded by Forrester Research that same year as setting industry best practices—is the detailed customer analysis the online marketing team conducted to redesign the Web site as the first of the bank's customer-centric channels.
Improving Customer Insight
A persona, as defined by Avenue A Razorfish's Director of User Experience Shannon Ford in the white paper, "Creating Quality Personas," is an "archetypal representation of an actual user group whose members share similar needs and goals." As such, a persona describes key behaviors that someone who fits into a particular persona would have, such as how he or she gathers information or makes a purchasing decision. These core behaviors, values and other attributes help the marketer better determine not only how to frame the content it provides customers but how to present this content. Ford writes, "Achieving deeper insight into the drivers behind user behavior with the quality persona development is the first step in harnessing the ability to influence that behavior in order to achieve business goals."
Several years of database research and analysis went into developing the four personas Sovereign Bank uses to guide its every online move for customers who fit into one of these groups, says Doran-Collins. (Customers who don't fit into one of the personas, as well as prospects, receive a less customized Web site experience.) Finished two years ago, these personas were created using customer information on file from its four main customer segments, as well as geographic, demographic and psychograpic data from San Diego, Calif.-based Claritas, and data gained from its online trending activities.
To help Sovereign Bank's marketing team put a face on the personas, Doran-Collins explains that it gave each of the four personas an individual's name who would be representative of that customer group. So, for example, one persona might be called "John Smith," and represents people who are likely to have particular jobs, live in certain kinds of neighborhoods, drive certain kinds of cars, etc. Armed with this detailed view of each customer group, the kind of financial needs the people in that group might have and the way in which they would satisfy those needs, Sovereign Bank is able to better predict and respond to customer interactions.
"All of our Web activities are geared to these personas, not our product line," explains Doran-Collins. "The personas drive message, creative, font, copy tone, selection, everything," she adds. And any future Web site enhancements, from banners to search tools, will revolve around fitting these personas.
For example, if someone fits into a persona that is representative of a young couple with children under the age of 10, the section on homeowner loans might feature a photo of young parents playing in the front yard of a new home with their kids and it might discuss balancing the need for living space with other financial goals. On the other hand, a middle-age single woman might receive a Web page that features a photo of a woman her age putting the finishing design touches on her custom kitchen and copy that stresses the satisfaction of independence and the investment value of owning real estate.
While none of these scenarios represent Sovereign Bank's personas—Doran-Collins is tight-lipped about the exact details of her firm's top customer groups—they are indicative of how personas work to deliver a more personalized Web visit for customers.
To leverage the personas, Sovereign Bank also is building customer profiles across its different channels, which include direct mail, telemarketing, e-mail, community banking offices, statement inserts/messages and ATM statements. This information is helping the firm identify customers as they come online, determine in real time which products these customers already have, and then present relevant messaging and offers during their visit. It also is using this insight to fuel e-mail campaigns that follow up on possible product needs, based on customers' online interaction.
"We're applying research to our segmentation. We don't want to drill the customer into one path, so we do segmentation that's structured by customer need, not by product," explains Doran-Collins.
To take this customer focus even farther, Sovereign Bank is looking at bringing third-party enhancement data into the customer profiles to better predict the right product for upsells and cross-sells. Says Doran-Collins, "We want to be our customers' advocate and suggest products that could help them achieve their financial goals."
She adds that it's been a "phenomenal experience" in grading Sovereign Bank's customers into personas, using focus groups and control groups to obtain a full picture of the customer base. To continue to maximize the value of these personas, Doran-Collins' team plans to conduct more qualitative and quantitative analysis, testing and evaluation to ensure the personas still are relevant next year.
Now that the personas have proven themselves worthwhile on the Web site, Doran-Collins is getting ready to apply them to the firm's e-mail marketing campaigns, too. And the direct mail channel is hoping to begin using them to guide its contact efforts, as well. Sovereign Bank mails 5 million to 6 million pieces of direct mail annually, offering customers credit cards, home equity loans, checking accounts, and upsells for other types of accounts or services, such as online payment tools.
Right now, says Robert Hand, Sovereign Bank's senior vice president, director of advertising and promotion, the direct mail operation still is in the data collection stage and needs to get to "critical mass" before applying the personas to direct mail creation.
Currently, direct mail communications are developed based on knowledge gleaned from customer conversations that take place across channels. "We track the nature of these conversations on a macro basis and create major direct mail campaigns as appropriate. The real opportunity will be when we can collect this information in a way that will allow us to conduct one-to-one campaigns," Hand explains.
Working the Levers Behind the Curtain
"On the theme of customer advocacy, it's a block and tackle area for most companies," says Rob West, director of sales for Click Tactics, a software and services company in Waltham, Mass., that specializes in Web-based automation of multichannel direct marketing campaigns. Sovereign Bank uses its solution to manage its customer data-driven contact processes.
Click Tactics handles Sovereign Bank's preference center, which collects and stores customers' channel preference selections, as well as catalogs and tracks their interest in specific product lines. It does this via a data feed, some of which happens nightly, that Click Tactics integrates with other Sovereign data inputs from various sources, such as the community banking offices, to ensure Sovereign is responsive to customer requests from all different channels.
Tied in to Sovereign Bank's operational data, explains Click Tactics' president and CEO Andy Frawley, this data integration process ensures all communications the bank sends via any channel not only are compliant with federal regulations but also in keeping with its branding and marketing strategies.
For example, says Doran-Collins, Sovereign Bank's home equity product primarily is applied for online, but the firm is able to use direct mail via solo mail, inserts and other communications to drive customers to use the phone or the online tool to respond. By integrating the direct mail channel with the online and telemarketing channels, Sovereign can coordinate its communication efforts to follow up on customers' initial interests and gain response.
And because the Click Tactics' solution is automated, based on business rules that control campaign parameters, Sovereign Bank also is able to versionalize campaigns along its four personas more easily, creating 50,000 versions of an effort for the same investment as 5,000 versions, explains Frawley. The automation feature, which includes approval process sign-offs, allows the firm to spend less time on the production process and focus more on how to increase relevancy of messaging and offers as they relate to timing, channel, etc.
Doran-Collins says this integration is going to help her team make relevant offers to customers while they're still on the Web site seeking information and conducting transactions.
And though only the online channel is using Click Tactics' solution, the other channels are practicing integrated marketing, just in a more manual fashion. Hand explains that direct mail and telemarketing are paired to present information to specific customer groups and then conduct personal follow-up to those customers who have not placed their phone numbers on do-not-call lists. Mail files are extracted from Sovereign Bank's master database, says Hand, along with a telemarketing file that is sorted by customer banking office. This telemarketing file is provided to the bank's telemarketing center and branch offices for follow-up phone campaigns.
Sharing the Data Insight
One of the main obstacles to gaining this level of customer insight and then applying it across the operation at Sovereign Bank was getting on the same page internally. Previously, "all business line owners were driven by the success of our own channel or line, and we needed to move past this to embrace the overall needs of our customers," explains Doran-Collins.
Since implementing a more customer-centric business focus, she notes that the firm exceeded expectations for the number of product referrals and applications generated online—which helped to prove each channel could support the others to achieve individual and corporate goals, as long as all business line owners were making decisions based on the same customer viewpoint.
The current structure involves the different business line owners meeting with the Internet program manager, who makes sure any communications and data collection strategies do not work at cross purposes; because the majority of customer interactions take place online, Sovereign Bank has organized its contact flow around the Internet program. These meetings keep each business line owner aware of the customer interaction that is taking place along other channels and help them make decisions based on customer needs and opportunities.
"But ultimately," Doran-Collins, says, "channel efforts are guided by customer preferences."
In addition to these meetings, Sovereign Bank also has an internal advertising agency, she states, to oversee the brand direction of all customer communication.
Hand points out that however good the internal data sharing is, the bank still has to contend with the usual obstacles to multichannel marketing. These primarily include do-not-call lists and the lack of customer e-mail addresses on file.
The move to a more integrated marketing operation will help alleviate this pain in the long run, as one channel can help drive contact where another one can't. For example, the Web site features multiple prompts for a customer to connect with a banking specialist, ensuring that customers who prefer to speak to live representatives—even their own community banking officer—can do so for any financial questions or applications.
The Multichannel Result
"When [companies] migrate from a traditional direct marketing environment to a more responsive approach driven by business rules, they see dramatic changes in performance from a financial standpoint," asserts Frawley.
Doran-Collins and Hand would seem to agree. Looking at the overall customer base, says Doran-Collins, online banking retention is two times greater than those customers without an online connection. These are customers who are benefiting from Sovereign Bank's persona-based approach.
And the numbers get even better, she adds, when looking at BillPay customers, or those customers who use the bank's online bill payment product. Doran-Collins attributes the improved performance to the customer-focused online experience her team has created.
Hand has found that the firm's multichannel marketing efforts have significantly raised response rates to its direct mail efforts. "Direct mail with a follow-up phone call serves as a reminder and also as an opportunity to answer questions," he says, explaining that this gives the bank an opportunity to better serve customers.
Frawley states that these results are typical of multichannel marketing efforts. When companies play e-mail and direct mail off one another, for example, the response rates to those combo campaigns double that of the usual return, he offers.
Investing in the Future
Encouraged by the results obtained via the personas and other customer-focused data initiatives, Doran-Collins plans to make more improvements to the customer experience on the Web.
Her team is working on a natural language search tool that not only will help customers find the financial information they are seeking in their own words, but also provide more customer intelligence to Sovereign Bank on how searchers view financial topics.
In addition, the bank plans to conduct an account aggregation project to better understand all the financial products a customer might have with institutions besides Sovereign Bank. And Doran-Collins will be developing a segmentation tool that is based on regional preferences or other criteria for more precise presentation of content and offers to Web visitors.
On the direct mail side, says Hand, the company wants to move toward true one-to-one marketing in its efforts. The goal is personalized communications, "where we speak to the customer uniquely about their situation. For example, 'based on how much you've told us you've saved for retirement, you'll have $X to live on every year. Let me help you with strategies to increase your savings so you'll have $Y to live on.' That sort of thing," Hand explains.
For now, the other channel managers will be closely watching how the online team fares with its test cases. If its previous successes are any indication of the road ahead, Sovereign Bank's online channel is poised to lead the firm into the multichannel future.