Crestar Financial Corp. knows that the value of information depends on what can be done with it.

So the Richmond, Va., bank is making a transformation toward data-base marketing, turning stored data into a resource for increasing revenues and managing costs.

Crestar is using client/server technology to gather more information on customers as well as analyze and disseminate it throughout the organization.

The information was always there, but the bank "just never had the ability to park it in one place to analyze it," said vice president Scott Nelson.

Internal policies probably gave Crestar a head start in data integration, Mr. Nelson. "For example, we have always kept teller logs in electronic format, so it's easy to get all the information into the mix," he noted. "Many banks haven't gotten to that point yet."

Crestar's earliest attempts at data base marketing meant pulling data off a mainframe. But the bank was dissatisfied with the technical restraints this imposed.

The effort was limited to just a small share of the mainframe's storage and processing power. Much of the usefulness of such data as automated teller machine records and teller logs went untapped.

"In the past, we were talking about sending the branches a stack of green bars," Mr. Nelson said. "With a customer sitting there, a salesperson isn't likely to pull out a pile of printouts. That's not conducive to the sales process."

With its growing client/server network, Crestar can now allocate 4,000 bytes per customer record - up from 153 bytes on the mainframe. This means the bank can capture more data and place it into ever-more-detailed customer profiles.

"We are capturing more customer behavior now, such as delivery channel usage, that is more predictive of what customers are going to do," Mr. Nelson said.

The new client/server environment, built with vendors' help, greatly improves branch employees' ability to get at customer data.

"This gives a lot more power to the customer-contact people, so they can really understand what their customers want," Mr. Nelson said.

Information from the server is linked to the bank's branch automaton through a wide area network.

Though dedicated to alternative delivery channels, Crestar emphasizes its branch system. "The approach we've taken is to use the data-base pieces to drive customers into the branch," Mr. Nelson said. "We target a specific offer to a particular audience and then use the branch as the fulfillment vehicle."

Though Crestar is counting on market segmentation to increase sales, it also intends to use such modeling to clue in branches about their successes and failures.

"We have the ability to give a branch much finer information as to what its customer base looks like" and how effective the branch has been in meeting corporate objectives, Mr. Nelson said. "We can show them exactly where the gaps are and where they have underpenetrated the market."

Part of the challenge of this information explosion, Mr. Nelson adds, is presenting data in forms that make sense to the platform staff. In talks with end users, he said, the bank is learning more about what works and what doesn't.

One format that branch staff members would like to see, Mr. Nelson said, is a scoring system that assigns qualitative weights to various bank products. The scores would indicate which product to pitch to a particular customer.

Knowledge of new bank's customer-segmentation abilities has spurred branch employees to ask for prospecting lists with names, phone numbers, and more sophisticated data, such as when and why the bank last contacted a particular customer. Such tools can mean less overlap among sales efforts, so customers aren't inundated with sales pitches.

Harnessing some of the new analytical power for market segmentation can take some of the risk out of branch closings, Mr. Nelson said.

Customers who use tellers only are the most likely to close their accounts once their branch is gone. Crestar can concentrate its marketing on them, steering them to other offices or to electronic delivery channels.

Similarly, the bank can tailor campaigns for regular customers of the branch who occasionally use another one. They can be urged to use that site.

Market segmentation has also helped the bank see that measuring a customer's profitability is more than a matter of account balances.

"That assumption has been refined to take into account a greater depth of information on customers, as well as by redefining what is truly profitable," Mr. Nelson said.

Consider, for example, two customers who have $50,000 certificates of deposit. One customer is in the branch six times a week, keeping tellers busy answering balance inquiries. The other uses the bank's voice-response unit to get the same information. Clearly, the first customer is less profitable.

In addition, data-base analysis will probably change the way Crestar looks at how customer satisfaction affects profitability.

The assumption has been that happy customers are profitable customers. By tracking and analyzing customers' banking habits, Crestar will know for sure.

Fuller understanding of how customers use bank services will let Crestar encourage habits that help it make more money, Mr. Nelson said - for example, by offering incentives such as preferred rates on loans.

"If it's a customer who ties up a lot of corporate resources, we will want to see more business from that customer as compensation," he said. "Or we may encourage that customer into cheaper delivery vehicles, like conducting routine banking through our phone center."

Crestar also plans to use market segmentation to detect customer dissatisfaction.

"If you work with customer data, there are indications - such as dropping check volumes - that if you watch them over time could signal that a customer is planning to leave," Mr. Nelson said. "Catching it early allows the bank to trigger a customer-intervention program."

Crestar's marketing savvy helps it hold its own against tough competitors in its Virginia home market like Signet Bank, NationsBank, and First Union. In the last few years, technology has underpinned much of its success.

Last year the bank introduced a 24-hour-a-day, seven-day-a-week telephone banking service that combines sales and customer service.

Crestar is also testing home banking services through a partnership with Visa U.S.A. These services enable customers to pay bills and obtain account information by telephone. A PC-based home banking system is also under consideration.

At the branch level, Crestar operates a new PC-based platform system and a sophisticated communications network developed by Bell Atlantic. The network carries voice, data, and video, linking all of Crestar's 350 branches and offices. Both were installed last year; this year the bank plans to upgrade its teller stations.

"Crestar is a firm believer in the use of technology and the role that technology will play in the future of banking," said Vernon Plack, a bank analyst with Scott & Stringfellow in Richmond. The bank applies its technology effectively for strategic decisions, he added.

For a bank with less than $20 billion of assets, Mr. Plack said, "they do a good job."

Ms. Monahan is a freelance writer based in New York.

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