Customization Required To Be Competitive

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In the 2002 movie "Minority Report," the Tom Cruise character, John Anderton, is walking through a subway station with multitudes of glass screens showing advertisement videos. As he walks by, an advertisement identifies him biometrically and calls out to him by name. "John Anderton, would you like a Guinness?" Another ad across the subway beckons, "John Anderton, you need to travel." As his name is called, he is compelled to look at the advertisements.

This extreme form of real-time personal marketing seemed like fiction in 2002, but it's becoming a reality as the mass customization movement picks up steam.

What is causing this transition? First, our culture is becoming immune to mass marketing through newspapers, radio, TV and the Internet. Consumers are almost dazed by hundreds of thousands of impersonal messages that bombard them each year. In addition, they receive messages on more channels, diminishing their attention to any single channel. The final result is a smaller response rate from any one mass marketing method.

The solution to saturated mass marketing was targeted, direct mail marketing. But direct mailings that are targeted have become lost in the sea of junk mail. (If you want to get my attention with direct mail, then FedEx it to me. I open those.) So companies rushed to telemarketing...until the national no-call list quickly put an end to this and allowed me to enjoy dinner again.

CUs used targeted marketing at the teller line by offering cross-sell tools to the tellers. But this person-to-person targeted marketing started to suffer with the increased use of electronic channels (IVR, ATM, Internet and mobile banking). This channel switching reduced teller lines but also rendered teller-targeted marketing less effective for reaching on-the-go members. As technology increased in our lives, the problem for all companies became how to offer personalized marketing messages with impersonal technology.

I believe the problem will be answered with mass customization. In manufacturing, mass customization is the delivery of customized (personalized) goods at mass produced (lower) prices. In marketing, this translates into highly targeted, personalized messages at relatively low delivery costs. Eventually marketing messages, to be effective, will need to be segmented down to a single person or "mass of one." The message will be so personalized and address such a specific need-a need the member may not even realize-that the member will feel compelled to listen to it and more inclined to act on it. Just as important, the CU will need to economically deliver a mass customizable solution to meet that need.

Personalized marketing differs from targeted marketing in three key areas: The segment or audience is usually smaller. The more specific and personal the message, the smaller the audience will naturally be. It requires authentication or identification of the member in order to be delivered properly. Because of No. 2, it will most likely be delivered the most economically via electronic means.

Fortunately, the building blocks needed for personalized marketing already exist-CRM and data mining, Voice Response Units (VRUs), ATMs, Internet and mobile banking (which require user authentication), and the ability to deliver text, image or voice messages are supported by almost all e-channels. Multi-channel marketing products can deliver and coordinate the messages across all the electronic channels. Once you have the building blocks in place, there are three basic steps to personalized marketing:

1) Define the member's needs down to the most granular level possible using CRM.

2) Create the ability to personalize a product or service to meet those specific needs. This will require mass customization. (See for examples of companies that have done this with their products.)

3) Deliver the personalized offers economically using software that delivers down multiple electronic channels.

Credit unions must realize that mass and conventional target marketing are becoming ineffective in today's personalized world. CUs must move to electronic targeting methods that will prepare them for personalized marketing.

Quinton Hamel is an offerings development director for Fiserv. He can be reached at 248-640-9692 or

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