Bank One Texas Using New Key to Unlock Data
Bank One Texas has proprietary research showing that it serves about 200,000 small businesses in the state, ranking second only to NCNB Corp.'s Texas banks. But until this week, its commercial bankers were not able to amass market penetration data with the same precision as their retail banking counterparts.
What has changed is the adoption by the bank of Business Advantage, a software system developed by Harte-Hanks Data Technologies.
Mary Ann Beach, director of marketing research at Bank One Dallas, said the system allows account officers to segment customer information by nine different variables, such as sales, age, and industry type.
Problems with Names
That's unique, she asserted, since vendors of management information systems historically developed small-business files modeled on consumer data bases.
"It doesn't work accurately," she said, noting that small-business accounts are variously listed under parent company names, subsidiary company names, and "doing business as" names. Consumer systems simply match names with addresses and Social Security numbers.
Harte-Hanks unit, based in Billerica, Mass., spent three years developing the new system, which is accessible through personal computers.
"Just two years ago, research managers were grudgingly willing to accept that 65% accuracy was the best available, even though retail matching neared 90%," said Thomas Swithenbank, a top executive of Harte-Hanks Data Technologies.
Such precision does not come cheap. Creating a data base for Business Advantage from bank records costs between $50,000 and $75,000. In addition, $100,000 to $250,000 is necessary for annual maintenance and upgrade.
Randall Bean, market development manager at the Harte-Hanks unit, contends that the system reduces the cost of acquiring small business accounts by focusing marketing efforts.
A Thorough Description
The software stores all information about a business relationship in a single place, he said. Moreover, it identifies all product and service accounts by related businesses, parent and subsidiary relationships, and related consumer relationships.
The software data base includes information on industry growth and profitability provided by Oxxford Information Technologies Ltd., New York.
Bank One Texas, the Texas holding company of Banc One Corp., Columbus, Ohio, uses a commercial data base management system from Harte-Hanks and is phasing in its use of the new system. Its first goal is to develop better data on the number of its customers, said Ms. Beach.
Improvements in Marketing
"Ultimately, our goal is to determine the profitability of the relationship and improve our cross-sell and prospect targeting," Ms. Beach said. "We'll need to append even more external data to go into that type of modeling."
The Harte-Hanks unit plans to market the product to the nation's top 100 banks. It is designed for banks with 100,000 to 750,000 commercial accounts.
Ms. Franzoni, a freelance banking reporter, is based in Springfield, Mo.