“Different strokes for different folks,” goes the old saying, and Japan’s Sumitomo Trust & Banking Company has found the ideal way to gear its service to the client with the help of the new IBM solution. Sumitomo has implemented a new marketing data warehouse known as MCIF (Marketing Customer Information File), and transformed customer data into valuable insight.
“Providing the same set of products to all our customers wasn’t the best way to serve them,” said Tomimatsu, senior manager, business planning department, “so we changed direction. We implemented technology that would allow us to match targeted offers to appropriate clients at the right time in their life cycles.”
Today, Sumitomo’s world truly rotates on a different axis – in a direction that makes more business sense. Branches now share data. Households and the individuals within them appear as one. Direct marketing channels are in place and are fully operational. Bank employees easily access information. Marketing campaigns reach the right targets.
Sumitomo is involved in a host of business areas: asset management, other trust services and custody, corporate finance, retail business, real estate and international operations. The information uncovered by the solution will help in all areas of CRM – acquiring new business, promoting additional products through cross-selling, retaining customers, improving campaign management and introducing incentives for recruitment of new customers by word of mouth.
“We can analyse data to determine if a particular customer is exhibiting the typical signs of attrition, for example,” commented Machida, senior manager, business planning department, “and we are encouraging our sales professionals to institute cross-selling strategies to encourage loyalty.”
The team has now turned its attention to other areas as well, including fine-tuning asset management, maximising customer value, developing customer segments, improving the mix of delivery channels, studying policies and enhancing client relationships.
Machida explained: “Our customers’ needs are different depending upon lifestyle, life stage, age and a host of other factors. This solution helps us have the scientific insight necessary to provide good Customer Relationship Management by discerning even the most subtle differences among people and acting accordingly.”
When all the hidden information can be studied, the facts can drive practical business actions – acquiring new business, promoting additional products through cross-selling, retaining customers, improving campaign management and introducing incentives for recruitment of new customers by word of mouth. “We can analyse data to determine if a particular customer is exhibiting the typical signs of attrition, for example,” commented Machida, “and we are trying to encourage our sales professionals to institute cross-selling strategies to encourage loyalty.”
Using data from the MCIF, Kimura, manager of the business planning department, studied how Sumitomo should change its marketing practices with relevance to products, sales and delivery channels. “The new technology spurred us to think in terms of individual customers rather than in terms of products,” he clarified. “Of the 1,700,000 customers we polled with a questionnaire, for example, 92,000 responded – and each of those responses helped us understand the effectiveness of our products and how our bank interacts with customers.”
Using the analysis capabilities provided by IBM Intelligent Miner for Data, a component of the solution, the team evaluated which direct mail campaign tactics netted the best responses.
“Our prior acquisition rate of 1.2 per cent has increased to 6 per cent with the help of the solution,” Kimura noted. “We spend the same amount of money on mailings, but now we get better results.”
He continued: “Through analysis, we found differences – that newer clients transact business differently from long-term clients, for example. Conversely, we discovered similarities – that telephone banking usage doesn’t seem to vary by age or amount of assets customers held in the bank.”
As Machida said: “Even with the very simple model of sending targeted mail to the most appropriate audiences, we increased acquisitions fivefold. Imagine what we will be able to do when we test a wider concept – that of changing product offerings and modifying the way branches operate!”
In 1997 Sumitomo created call centre access as a touch point to increase customer interaction. While inbound telemarketing is an extremely important communications link with customers, the solution helps Sumitomo use outbound contacts with customers to build better relationships, too. Through ‘thank you calls’ call centre representatives can record trends to promote understanding of those areas which may need improvement.
The new solution impacts another touch point, Internet banking, a channel which Sumitomo is constantly refining. During the next year, the bank’s team will work to meet the needs of those who prefer Internet banking over other communications methods, by enabling information access about account status and transaction data. The team feels this emerging medium will become increasingly important to more and more customers over time.
Because Japan’s laws prohibit extensive sharing of customer information, building loyalty in banking relationships is even more difficult there than in many other parts of the world. Usually the only information the institutions have is that provided by the clients themselves. Knowledge gained from the analysis of MCIF data will help the team target messages to various customer segments and analyse them for effectiveness – the right slogans, the most appropriate colours and sizes, the best campaign scripts, the most effective advertising, messages for product challengers versus product champions – all can be studied.
The challenge presented to IBM was to get an overall view of customer relationships in order to improve service levels, target marketing one-to-one, and evaluate business practices. The solution was an IBM business intelligence technology solution which provides strategic analysis capabilities.
It comprised: IBM Intelligent Miner for Data, IBM Campaign Advisor (a component of IBM DecisionEdge for Campaign Management); IBM RS/6000 SP; IBM DB2 Universal Database (in host system, and also in company’s funding system); IBM Info Analyzer
“If I had to note one reason why we chose IBM, it would be the people,” said Tomimatsu. He continued, adding another decisive factor: “Data analysis that is not tied into any action has no meaning. As we evaluated vendors to supply a solution for us, we realized that IBM had the ability to help make the important link between our new-found information and meaningful actions.”
“NCR, an IBM competitor we considered, had a good engine for analysis – one that was not that different from that of IBM – but the infrastructure and the application system for marketing they provided didn’t match the superior quality provided by IBM. They couldn’t give us the overall solution,” continued Tomimatsu.
“In addition, IBM’s experts were able to think on the same level as the bankers in our organisation with regard to how operations would run. This type of insight was invaluable to us.”
Known the world over, Sumitomo Trust and Banking Company, Limited, is one of Japan’s largest institutional investors, with approximately 12 trillion yen under investment. The company enjoys strong bonds of trust with its clients, as evidenced by over 30 trillion yen in assets under administration. The institution ranks number one in the industry in commercial and industrial real estate brokerage.
Sumitomo is involved in a host of key business areas: asset management, other trust services and custody, corporate finance, retail business, real estate and international operations. Unlike commercial banks, Sumitomo Trust possesses both the asset management expertise and the sophisticated securities processing systems required to provide integrated, high-value-added institutional portfolio management solutions. Sumitomo is in an established position as one of the world’s leading global custodians with a world-wide network coverage of more than 30 major markets.
Sumitomo started its MCIF project in 1997 and completed implementation in 1999. Machida explained: “Prior to partnering with IBM, we had a concept of this kind of data warehouse solution in mind, but by working together with IBM’s experts, we widened the scope and deepened what we were about to do.”
The MCIF system provides a variety of new internal capabilities for the bank. Registration and reference to MCIF is possible from all marketing departments, and therefore, all marketing branches, call centres, and planning functions are linked. Work site operations in Sumitomo’s headquarters can share information. MCIF’s single platform approach affords unlimited storage and retrieval capabilities for the entire network of banking channels. The result? Transactions and attributes of each customer are not only easy to find, but also quickly accessible by bank employees through a host of channels.
Will the solution cause a culture change in the way Sumitomo goes about its business? Machida thinks so. “Already, there is a big difference in our activities – branches can use information freely and independently, and this accessibility of information may encourage healthy competition among them.”
Having new insight will help Sumitomo strengthen relationships and widen business prospects. Not only will upper echelon customers see differences in service, but also, all classes of clientele will benefit.
“Now, we have access to a universe of valuable information and insight,” says Tomimatsu. “We can scientifically determine the channels most suitable for communication to each customer segment, and the products and services which will afford each of these customer groups the most value. This technology allows us to put the client first in every transaction.”
That, in any business, is a perfect world.