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ByFrank Peterson Jr., Vice President MGIJorge Restrepo, President EurekaFacts
Direct Marketing Optimization:
The story behind the first Billion dollars
Presented at the 2006 Direct Marketing Association Conference
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The StoryVirginia Commerce Bank is a Virginia state-chartered bank that commenced operations in May 1988. The Bank pursues a traditional community banking strategy, offering a full range of business and consumer banking services through sixteen branch offices, two residential mortgage offices and one investment services office.
VCB has grown significantly since we started our campaign in 2003. Assets grew from $780 million in 2003 to $1.8 Billion in 2006. The winning strategy, owed to strong management and a reputable brand, includes direct marketing in its mix.
A targeted direct marketing effort using data analysis and creative genius contributed to this outcome.
This success story shows how optimized direct marketing can be part of a winning strategy. The information presented will discuss key elements of the marketing optimization process.
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The Landscape
Aggressive promotion by many competitors, some very large.
New players entering the field and consolidation of others through mergers and acquisitions.
Competition for new customers in the market can be extreme.
Increased distrust in corporations and their offerings.
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The Campaign
Integrated marketing campaign where direct mail is the catalyst for response.
Built on strengths of the brand. Utilize available data and personalization
technologies to market one-on-one. Support offers with materials including web site,
POP materials, staff involvement. Prioritize and implement a constant effort. Test, measure and improve.
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Components
Customer profiles. Segmentation, targeting and positioning strategy. Developed a set of offers that increased loyalty and
increased deposits among current customers. Developed an acquisition strategy that brought new
customers. Direct marketing to strengthen service penetration. Supporting communications include POP, web and
other materials. Campaign evaluation.
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Customer Profiling
Develop customer profiles with demographic, attitudinal and usage data Data overlays to better understand the
demographics of the customers Understanding of the lifestyles Product/Service usage Understand other key factors such as
geographic location Identify threats and opportunities
Identify hot buttons & barriers Understand context
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Segmentation Identify the market segments and niches Segment the customer database using
demographic, attitudinal, behavioral data. True segments are: Homogeneous within, heterogeneous across Respond similarly to marketing stimuli Can be reached
Evaluate possible segmentation schemas and pick target segments.
Characterize segments. Identify predictors of response.
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Customer data
Usage
Demographic, household data
Geography, geo-demographics, etc
Targeted offers
Targeted offers
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Offer Targeting Identify optimum offers per segment Develop offer sequence Support personalized one-to-one offers within
a segmented marketing approach Provide optimum mix information
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Continuous Improvement
Success achieved through test and measure Monitor key business measures Direct mail optimization / campaign metrics Testing includes offer, package, list, timing
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Lessons Learned
Define clear objectives Build and deliver on your brand promises Segmentation, targeting and positioning is
key Make maximum use of data, creative and
personalization technologies Integrated campaigns across channels
have higher impact Loyalty building is an ongoing effort Test, monitor and improve
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DiscussionQuestions & Discussion
