CEO: Russel R. Heiser II
INNOVATION: A new marketing engine KLI is You
In banking, digital relationships with customers are replacing face-to-face interactions.
Therein lies both challenge and opportunity for bank marketing departments-reaching out to customers who never dropped by or ones that used to. Segmint, a 15-person start-up based in a business incubator at the University of Akron, thinks it has the answer.
Segmint's technology looks for transactional patterns so banks can deliver timely and targeted messages via Web ad banners. For example, if a customer has several credit card charges to Home Depot or Lowe's, they might be interested in a home equity loan for a home improvement project.
"A deposit at a rehearsal hall and [transactions] with a florist and bridal shop [suggests] there's a likelihood they are planning a wedding. We would recommend presenting a home equity banner to that customer subtly referring to a wedding," explains John F. Relyea, Segmint's vp of strategic relationships and partnerships.
Transactions say a lot about you and what's important in your life. Segmint calls these priorities "Key Lifestyle Indicators (KLI)" whose creation are based on customer spending patterns.
"[The system] assigns the KLI and activates the campaign for the customer. If the customer opens a home equity line, the banner goes away. Every KLI has an expiration date," explains Relyea.
Don't get too excited, yet. Segmint's technology is still in the beta testing phase and publicly shown for the first time at Finovate in May. Segmint CEO Russel R. Heiser II said the company is working with a couple of partners to test out the technology which will be offered as a service. He declined to identify them.
Bank marketing consultant Brett King, founder of the International Academy of Financial Management, thinks Segmint is on the right track by targeting individuals. Segmint executives label the product's target "a [market] segment of one."
"Banks need to understand when customers need a service or product and provide it the right time through the right channel," he says. "Then it becomes a service because the customer says `that's just what I needed'."
Bank marketing departments are still stuck in traditional methods such as direct mail and TV advertising, which are becoming increasingly ineffective, according to King. The good news is that targeting individuals online is there to fill that void.
"This requires a complete move [away from shotgun marketing]. Anticipating when you are going to need that offer is going to be the key skill of the next decade. Most of the big guys don't have a clue how to do it so organizations like Segmint will come and do it for them," says King.
One question is whether consumers will consider the technology an invasion of privacy, but Heiser says safeguards are built into the technology so all data handled by Segment is anonymous. Fearful bank customers will also be able to opt out.
What's more, privacy is between the bank and its customers, according to Heiser. "We're doing this on behalf of the bank. It's no different than you walking into a branch and saying you need a loan because you're getting married."
King takes the same view and says customers who opt out could miss out.
"There's a generational issue with privacy. Generation Yers don't have the same [fears] about privacy with organizations they trust. The group that has a more open relationship will get better service. The group that does not want to share information will [be at a disadvantage]."