Wachovia Corp. has licensed software from Prime Response Inc., a London software developer, with the aim of becoming a more sophisticated marketer.
The Winston-Salem, N.C., banking company will use the software to market traditional branch products like deposits and loans. By tailoring marketing messages to customers in different segments, Wachovia hopes to become "smarter" in the eyes of its customers, said Fred Koehl, senior vice president and manager of marketing information.
Mr. Koehl did not disclose whether the software is expected to reduce marketing overhead or increase business. The company, which plans to complete the installation this summer, said it will also use the software to gauge the effectiveness of marketing campaigns.
Terms of the deal were not disclosed. Mr. Koehl said the investment "stems from our fundamental business strategy in consumer and commercial banking, which revolves around relationship banking."
Wachovia, a $65 billion-asset institution, has $39.9 billion of deposits from 2.5 million households in its three-state domain. "I see the application growing across the company, including the commercial sector, particularly small businesses," Mr. Koehl said. "There are a lot of them."
The software, Prime Vantage, can be used to develop marketing messages by gleaning relevant information from Wachovia's multiple data bases.
The investment reflects an industrywide effort to use technology to mine bank-held customer information and use it to make customer relationships more profitable.
The Gartner Group, a Stamford, Conn., consulting firm, said sales of data base marketing technology amount to about $1.5 billion annually. The market will grow at about 35% annually for the next five years, according to Gartner.
Prime Response, with annual revenues of about $20 million, is following the industry's growth path.
Formed in 1987, Prime Response recently opened offices in Denver, San Francisco, and New York, adding to those it has in Dublin, Paris, and London. It also plans offices in Germany, Belgium, and Australia.
Martin Muoto, a Prime Response vice president, said the company is profitable, with revenues growing about 100% a year.
Recently, the company got $20 million in venture capital from General Atlantic Partners LLC, a firm that also has invested in Baan Co. and Scopus Technology.
Prime Response hopes to use part of the fresh capital to expand globally and to develop products, such as software that delivers customer information to branch and call center employees.
"We realize we still have a lot of growth ahead of us, and a lot of growing pains," said Mr. Muoto, "but after only six months in the U.S., we are really happy to be where we are."
Prime Response, which competes with Axciom Corp. and Harte Hanks Inc., is targeting the top 200 banking companies in the United States. Its clients include First Union Corp., Royal Bank of Scotland, Advance Bank of Germany, and Open Bank of Spain.
The company, which derives about half its revenues from financial institutions, also sells software to telecommunications and retail companies.