CEQUITY Analytics White Paper on EDM

8/14/2019 CEQUITY Analytics White Paper on EDM

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1 Copyright 2008 Cequity 1www.cequitysolutions.com

What is Event Driven Marketing?

Traditional marketing in financial institutions

is based around pushing products to

customers based on a statistical

assessment of their likelihood to accept

such an offer (Product Push).

Author Ajay Kelkar

e-mail - [email protected]
http://www.cequitysolutions.com/mailto:[email protected]://www.cequitysolutions.com/mailto:[email protected]


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IndexAbout EDM?

Evolution of EDM

Benefits of EDM

About the Author

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http://www.cequitysolutions.com/http://www.cequitysolutions.com/


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About EDM?What is Event Driven Marketing,

really?Event Driven Marketing (EDM) has come as a

breathe of fresh air for financial institutions.

Offering the ability to access customers through a

"pull" strategy, EDM is relevant instantly as it

meaningfully assimilates to a customer's need.While traditional methods use a "product push"

strategy based solely on statistical assessment

and repeated campaigns that result in very low

conversions, EDM uses valid, concrete data to up

sell products during a short, but focused time

frame. EDM uses existing data from a customer's

background and transactions to analyze and

predict precise moments to offer specific

products. Simply put, instead of conducting a

campaign based on the marketer's sales

objectives, an Event Driven approach is focused

more on the customer's need and how that Bank

can satisfy this.

With EDM's ability to create pre-defined business

value through detailed customer interaction and

behavior, financial institutions are reaping the

benefits of EDM driving value-producing

interactions that can even be customized for

individuals. As more banks follow the trend of

expecting better and concrete ROI, EDM

technology has proved its worth by recovering

costs in very short periods of time.

But still, how exactly does this system work? By

adapting a number of technology-enabled

communication tactics to the existing CRM

process within a financial institution, EDM

literally keeps a tab on the pulse of every

individual's activities. Looking for certain triggers

or specified conditions called 'events', EDM

effectively throws up opportunities to contact the

customer with 'event' specific sales, service

information.

In EDM terms, an 'event' is a relevant and

significant occurrence in a customers life and is

only specific to that particular customer. An

example might be the birth of a first child. At this

time, the parents most likely re-assess their

financial situation to cater for these new and

changed circumstances in the family. They may

consider taking out insurance, making a will,

moving house, purchasing a different car,

opening an account for their child (to hold the

monetary gifts received from family members),

etc. Thus, if a bank could determine an Event

such as this in a customers life, this would

represent an excellent opportunity to contact the

customer in order to offer appropriate products

and services. That said, 'events' are not just for

sales opportunities and can also be used to find

many kinds of significant occurrences such as

Attrition, Risk and Service.

1 EDM is relevant instantly as itmeaningfully assimilates to aclient's need.


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4 Copyright 2008 Cequity www.cequitysolutions.com

There are four distinct levels at which EDM can

function: simple, complex, real-time and

sophisticated. At every successive level there

exists an increased event complexity and an

increased data detail requirement, yet each

successive level tends to yield ever-higher

specificity and actionable customer insight.

Simple EventsSimple events are data thrown up by basic

queries or conditions. An example would be

"everyone that purchased a new refrigerator

yesterday." With this data at hand, specific

communication can be sent out to all that meet

the criteria. This type of event is driven by

scheduled segmentation schemes and usually

run on a monthly basis as time is not critical for

the execution of simple events.

Examples of simple events include product

purchases, age thresholds, birthdays, address

changes or purchase thresholds. While on the

surface they appear intuitive, these 'simple

events', when coupled with relevant

communications, can deliver double-digit returns

on marketing activity.

Complex EventsSlightly more complicated than 'simple' events,

'complex' events are necessarily a product of the

marketing team working with the IT team.

Complex events are based on marketing

responses to changes in customer behavior over

time. This activity consists of leveraging the data

you have about your customers to understand

behavior trends over time. For instance, you

want to know whether certain customers'

spending or other activity is increasing or

decreasing. Complex events also require a level

of knowledge about the data, so even though

defined by marketing, the execution might

require a user who is technically capable,

someone know better as a 'power user'.

Real-time EventsReal-time events fall under 2 categories -

session-specific and non session-specific.

Normally associated with online/web-based

interactions, 'session-specific' real-time events

tend to setup up-sell or cross-sell messages in a

normal transaction. For e.g. while shopping for a

PC printer online, a customer is delivered an

additional offer for paper and ribbons - relevant

products attached to the principal product

purchased. The purchase "event" is driven from

a predefined product profile or bundle that might

reflect "items that other customers have

purchased who also purchased this product".

In a 'non-session-specific' real-time event, a

customer who visits a bank website to check

mortgage rates for refinancing, within a very

short span of time, while interacting at an ATM,

receives a message about attractive financing

options. This could be followed by a phone call

from a personal banker with a personal

mortgage package offer. This kind of 'event'enables the marketer to combine it with


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additional information from the data warehouse

and responding with an enhanced offer back to

the customer. This response could occur on the

same channel, in a different session, or on a

different channel.

Sophisticated Events

Being the highest level of EDM complexity,'sophisticated' events are defined and initiated to

find patterns or specific circumstances that

indicate a significant change in an individual's

situation. They enable marketeers to find

carefully calculated opportunities to

communicate with individuals. Sophisticated

events might include this banking scenario:

"Notify me any time that someone withdraws

180% more than his average withdrawal amount

over the last 12 months." This scenario reflects a

significant change in an individual's situation.

These are questions asked daily, scheduled

queries of all of the detail data in your data

warehouse that find changes in customer

behaviour over time that represent opportunities

to communicate with that individual.

All four of these event categories, in combination

with each other, create a sustainable competitive

advantage that will protect customer asset base.

The Event Driven Marketing process can be split

into three areas of effort

So what's the bottom line on

EDM?While traditional methods have yielded low

response rates between 25 %, and the bankFig 1.0 Complexity and Business Value increase as

Event Sophistication increases.

Simple

Complex

Real TimeSophisticated

Complexity

Fig 2.0 Event Driven Marketing Process

E v

en

t Dr i v

en

M ar k

e t i n gP r o

c e s s

Detect the EventsDetected at an individuallevel based on thesignificance to thatindividual

Find the Best Leads

This requires the abilityto filter based onrecency, best offer andchannel limiting

Communication withthe Customer This requires a Multi-step, Multi-channel

Dialogue

B u s

i n e s s

V a

l u e


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incurs and absorbs the costs/expenses, research

done on EDM showed that the average response

rates typically range from 20%-50%. Even with

such startling difference in results EDM hasn't

grown in popularity due to the presumed cost

factors attached. Only recently have specialists

and experienced strategists created frameworks

and systems that help financial institutions gain

access to this revolutionary method.


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and eventually take-up the product offered.

Most of the development in this area has

revolved around the use of statistical

analysis to identify segments of prospective

buyers who have a higher propensity to

respond and to buy the product concerned.

This push-based approach was considered

effective and economical to undertake and

continues to be the main mass marketing

technique in use in most large banks today.

However, with ever increasing customer

expectations and ongoing competitive

pressure, banks are starting to recognize

that the traditional approach to marketing is

becoming less and less relevant at meetingtheir organizations objectives. Increasingly

banks are considering whether a more

customer-centric, needs-based approach is

possible to enhance product sales and

customer satisfaction. At the same time,

banks are looking to gain greater efficiency

from their marketing investment and avoid

the huge volume of unsuccessful

solicitations which consumers consider as

junk mail and which have tended to

desensitize them to other, more relevant

marketing offers.


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The biggest benefit seen with employing

EDM is that there is minimal wastage - of

time, effort and money. Instead of

conducting a campaign based on the

marketer's sales objectives, an Event Driven

approach is focused more on the customer's

need. Customers receive promotional offers

and service messages that are of interest to

them at the moment, and marketers avoid

the shotgun approach typical of most

campaigns.

By providing the capabilities to meet each

individual customer at the point of need, turn

customer monologues into value-producing

dialogues and rapidly, if not instantly,

improve return on customer relationships,

financial organizations today are finding

more reason to change gears and consider

EDM to be a winning option.

In addition to the impressive ROI it

generates, EDM is growing in popularity

because it offers financial institutions in

today's competitive scenario, the powerful

tools they need to manage customer

relationships in the right direction. For

instance, EDM empowers marketers to:

Shape how the customer interaction

takes place, while the customer

determines the what, when, and

where.

Engage each customer based on his

or her actual individual behavior andinterests rather than on a product

'push' marketing campaign or sales

promotion based on a targeted

segment.

Fulfill the promise of CRM by triggering

helpful interaction with each customer

at the time that customer has implicitlysignaled a clear and specific need or

interest.

Benefits of EDM

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In brief, EDM's benefits are:

Improved customer experience

Guaranteed brand reference

Increased revenues

Minimizing Attrition

Maximize marketing opportunities

EDM creates avenues of dialogue

with customers by changing the

standard approach of "Banks time

to contact " to a "Customers time to

contact ".


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Ajay Kelkar, Co-Founder & COO of Cequity,

has over 17 years of experience in

customer-driven marketing across a wide

range of industries such as Soft Goods,

Banking & Financial services & Retail. A

well known & well respected analytical

marketing professional in India, he was the

head of marketing for HDFC Bank and was

responsible for building world-class

analytical marketing capability for the bank.

He has extensive experience in starting with

simple data-led marketing and scaling-up to

complex analytics based cross-sell, upsell

programs. He has specific expertise in

change management while implementing

CRM and has led the first Unica

implementation in India at HDFC bank -

ranked amongst the top 3 Unica customers

at the Customer Success Awards.

About the author

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CEQUITY Analytics White Paper on EDM