Data Mining Application Helps BB&T Increase Cross-Sell Ratio

Like many regional banks, BB&T relies on cross selling to compete with larger competitors, such as crosstown-rival Wachovia Bank. But when Winston-Salem, N.C.-based BB&T noticed inefficiencies due to redundant messages from its various departments being sent to the wrong customers, it took corrective action.

It had been common for BB&T's credit card division to send a marketing blitz at the same time the loan division was creating its own separate campaign, with multiple messages bombarding the same customers. And siloed customer product histories gave the bank an inconsistent and incomplete view of customers' products and needs.

In response, the bank two years ago embarked on a project to gather household information and buying patterns to get a better idea of which products to pitch to which customers. No longer would it rely on disjointed marketing campaigns. Instead, focused three-month mailings revolving around specific products would be targeted to individual customer segments.

A cornerstone of the CRM strategy was the segmentation of customers into specific groups based on history profiles, allowing the bank to more easily push the correct services to fit lifestyles and needs.

Learning about customers-their demographics, geography, product usage, preferred service channels, tenure, contribution-is a prerequisite for creating products and services that will keep them on board. "Analysis shows the more services customers have from your bank, the less likely they are to 'attrite,'" said Stephen Kerr, database marketing manager at $60.9 billion BB&T. "It is harder to sever your relationship with a bank when you have all products and services tied to one institution. By adding superior customer service, customer satisfaction rises."

BB&T is using Customer Miner, a campaign management software solution from NuEdge, Waukesha, Wis., to conduct ad-hoc queries against past promotions, products per household, customer demographics and response rates for past promotions. Accessed by approximately 13 members of the bank's marketing team, Customer Miner employs thin clients to connect to a relational database populated with customer data, then performs ad-hoc queries to provide insight into the customer base.

The application resides on a relational database-either Oracle, Sybase, DB2 or SQL Server-and runs on an NT server. Users have access to the data via NT or Windows thin client workstations loaded with a graphical user interface (GUI). The solution can compress up to 20 gigabytes (Gb) of stored information into "transportable" 2.5 Gb databases accessed by each analyst.

Customer Miner has helped the marketing team double its cross-sell ratio, executives said. "Within one period, we could target up to 15 products in different areas that would appeal to specific customers," Kerr explained. "Now our reports allow us to research and send a customized piece of mail with products that specifically relate to the recipient."

A segmentation feature allows analysts to group individual customers quickly and easily at their desktops, and analyze and identify not only the highest revenue customers, but also those who generate the most profit.

An export module enables database information to be shipped to other applications-such as statistical or neural network modeling, direct mail, telemarketing, word processing, contact management and mapping-enabling BB&T to get the most out of its customer data.

In the early stages of the project, BB&T used Insight, a campaign management tool from CIC, NuEdge's predecessor company. NuEdge changed the product's name to AnalytiX and then to Customer Miner. The application was brought in-house by BB&T, giving it more control over queries and the ability to perform changes on the fly.

In addition to making campaign management flexible and precise, Customer Miner has made it fast. BB&T can process between 5,000 and 20,000 queries and translate between two million and five million records into reports within minutes compared to the old solution that required hours or days.

The next step is for sales representatives to follow up efforts with scorecards that will monitor responses. BB&T hopes to roll out the technology to its other divisions, although Kerr declined to say which department would be next. He also declined to state the cost of the solution, but NuEdge said that customers can reach a return on investment within months of installation.

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FAST FACTS

BB&T

ASSETS: $60.9 billion

BUSINESS CHALLENGE: Step up its database marketing efforts to identify and target profitable customers.

SOLUTION: Customer Miner

KEYQUOTE: Now our reports allow us to research and send a customized piece of mail with products that specifically relate to the recipient."

- STEPHEN KERR, database marketing manager