21 October 2009 News

 

Wachovia sees private banking growth from event based marketing

Tom Groenfeldt

When Wachovia Bank looked for a way to grow its private banking business, it chose to try and improve the quality of contact with its current clients rather than look at price cutting, a campaign of hard-to-target advertising or simply by increasing the amount of contact, since that was apt to annoy clients.

"We wanted to have relevant and timely conversation with customers about something that was significant to them," explained John Murray, senior vice president at Wachovia/Wells Fargo during a presentation at the Teradata Partners meeting in Washington DC.

The bank decided to run a two-month proof of concept, increasing the quality of customer contact with Teradata's technology, beginning in September 2008, with 19 relationship managers and 5,000 clients selected out of the bank's 1.7 million private banking customers. Private banking customers are defined as those with $250,000 (£151,000) to $5 million (£3.02 million) to invest, but clustered in the $1 million (£600,000) to $3 million (£1.81 million) range.

Teradata and Wachovia decided to use event triggers to prompt contact. The data warehouse took transactions and by 9 or 9:30 am generated a list of all private banking clients who had made a significant deposit or withdrawal. Relationship managers, not their assistants, were to call each lead within the day.

They decided that the trigger to initiate contact would be any transaction that was greater than $20,000 (£12,000) and more than 125 per cent above the client's largest transaction in the previous six months.

Later they raised the trigger to 150 per cent to improve the significance rating and reduce the number of client calls.

Research showed that the contact should follow the trigger promptly. A call within 24 hours has a 75 per cent chance of success, after three days it drops to 25 per cent and it just keeps falling from there.

Murray said the decision to use a trigger was based on client feedback. Clients wanted calls when the bank had something useful for them individually.

"If you contact me with something that isn't relevant, then you are bothering me," said one.

The proof of concept increased balances by 245 per cent. Murray said aggressive executives and sales managers, who called the relationship managers weekly to see if they had followed up the leads generated by Teradata, were key to the project's success.  Response from clients was highly favourable, with approval ratings above 70 per cent and only 9 per cent worried that the banks knew too much about their transactions.

A rollout to more relationship managers is currently under review as the private banking group works out its organisation structure now that Wachovia has been acquired by Wells Fargo.