Define clearly the purpose of the DMTM team

Definition: Direct Marketing

• The practice of delivering promotional messages directly to potential

customers on an individual basis as opposed to through a mass medium.

• Direct Marketing is a promotion mechanism that allows focused messages

to be received by a targeted audience. The main difference between
direct marketing and other promotion is that you can closely qualify your
audience to deliver a message those appeals to their specific needs.

• By definition, direct response marketing is when a business practices

promotions that allow or ask consumers to immediately respond to an
advertisement that has been sent by mail, email, telephone, fax or other
form of communication.

• For some FI, direct marketing means going direct to the customers vs.
intermediaries like agents or brokers.

Various Direct Channels

Frequecy / Response
Customer Reach Message Channel
Timing Rate

Newsletter /
Brief and key
Statement / When they read Limited 0.02% - 0.05% Pull
highlights only
Magazine

Website When they click in Informative When they click in ? Pull

Rely on customer
Take-ones Informative When they visit ? Pull
visits

Updated address & Informative /

As and when
Direct Mail depends on passive 0.2% - 0.5% Push
required
customer interest acquisition
DMTM: A Trend

• Trend towards reducing reliance on branches with increasing popularity of

ATMs and Internet banking

• Bank “walk-in” traffic reduced

• “Walk-ins” may not be targeted segment for e.g. retirees, housewives,

CEOs, VIPs

• “Targeted segment walk-ins” may not have the time for a financial review.
E.g. Office workers walk-in during lunch breaks

• TM is an important tool to get in touch with targeted customers who do not

visit branches

Current Marketing Tactic

Penetrate banking products into the customer base
utilising outbound personalised customer contact
as the principal media & then increase value per
customer via upgrades and cross-sells
Mail -
Phone
Personalised
Customer Contact

Loyalty Response rate

Campaign
Nurture Get
of 5%-35%

Personalised
Personalised
Customer Contact
Build Customer Contact

Upgrade / Add on response rate - 20%-30%

Cross-sell response rate - 20-40%
Marketing Tactic – Evolution

Simple
Products
Mail -
Personalised Phone
Customer Contact

Loyalty Response rate

Campaign
Nurture Get of 5%-35%

Personalised
Personalised
Customer Contact
Customer Contact Build

Upgrade / Add on response rate - 20%-30%

Cross-sell response rate - 20-40%

Savings/Investment Linked Products

TM Lead
Generation

“Face to Face” sales

Increasing Long Term Value with your customer

Retain customers via

lifecycle marketing &
loyalty bonus benefits Reaping long term profits

Increase average
premium per customer Recover investment at
via cross-sells & upgrades acquisition stage

Utilize outbound TM & low

cost products to maximize
“Existing customers are
database acquisition your best prospects”
Define Specific Business Objectives that the DMTM will work toward

Vision:

Offering the “right product

to the right customer
at the right time
via the right channel”

Telemarketing Products Key Attributes

Product Attributes

a. Simple

b. Low cost

c. Easy to understand

d. Guaranteed acceptance (or very limited t&c)

e. Easy to enroll

Proven Product

a. Accident & Health insurance

b. CaSa

c. Credit Card & Loans

d. FD Investment

e. Credit Revolving
 Credit
Accident &
Health insurance

Direct
Lifecycle
FD
Investmen
Marketing
CaSa
t

CC & Loans

Current DMTM Structure

Mass – RTC

Prime existing – RTC

Potential Preferred / existing – RTC & mRM

New to bank – RTC

Future DMTM

Break into 2 teams:

Team A: Potential Preferred Existing + Prime Existing

Team B: NTB + Mass Existing
Establishing the key goals / measures of success for DMTM

a. Quality of database

b. Product

c. Price Threshold

d. Others

e. How Do We Get Right Product to Right Customer (at right time via the
right channel)

Quality of Database

Strong Affinity

• No. 1 priority

• Sponsors lend credibility (e.g. banks base, credit card)

• Calls made “from Financial Institutions” always generate higher response

rates with less complaints

– Affinity with the trusted organization

– Customer secure with data usage
– Manages Privacy Ordinance concerns

Information provided for calls

• Availability of mobile, office and home nos

• Updated

• Credit Card Number to be provided

• Need to avoid asking customer for credit card information

– Time consuming
– Affect impulse buying
– “Trust” Issue…doubts on caller

• Bank to provide unique Identification No.

 – Sensitive information

How to improve quality of database

• Store invalid records / records with limited information for future

deduplication with later batches (especially if database owner cannot
accept and revise invalid records in their system)

• Short survey (3 questions) at end of call to update information

Product

• Product Attributes
– Simple, low cost, easy to understand, guaranteed acceptance, easy
to enroll

• Proven Products
a. Accident & Health insurance
b. CaSa
c. Credit Card & Loans
d. FD Investment
e. Credit Revolving

• Innovative packaging to complement target base

• Easy to understand
a. Limited space (in DM)
b. Limited time
c. Lack of face to face personal touch
d. Minimize Insurance Phobia
• “Confuse them, lose them” - Paul Goldbert

• Convenient payment mode

a. Credit card
b. Direct debit
c. Automatic monthly deduction
d. Minimize information request from customers, especially those
that are difficult or time consuming to provide, E.g. Credit card
no and HKID no.
e. Facilitate impulse buying
 • Premiums Paid Monthly
a. Reduces price
b. Ensure price does not exceed premium tolerance level

• Easy enrolment
a. Guaranteed acceptance
b. No questions asked / no CCRIS / CTOS check
c. Simple enrolment form
d. Ability to enroll over phone

Price Threshold

• FI TM is based on impulse buying & customers are unlikely to compare

benefits but there is an average acceptable premium

• Challenge is to constantly test and increase average premium without

compromising response rate too much
– Also depends on what the objective is :
• Higher response rates to build database for future “build”
activities
• Higher average premium per account

Others

• Call list to arrive on schedule

• Delays may cause TMO turnover & hence affect results

• Add buffer for de-duplication

• Further details provided in Campaign Management module

How Do We Get Right Product to Right Customer

• Current
a. Based on “past experience”
b. Feedback from TMO
c. Analysis of account holders based on basic criteria
Datamining

Apply Sponsor
Models Data

Outbound
Build Campaign List
Models

Campaign
Analysis Execution
(Eg Call Ctr)

Benefits Analysis Campaign

Outcomes
• Reduced cost per sale Data

• Increased ROI
• Potentially reduced losses on certain segment of products over time
(selection issues)
• Increased value of customers through more targeted ‘build’
programmes
• Lower level of customer contact required to deliver commission
stream
• Lower level of ‘customer exhaustion’ and annoyance
• More targeted offers thereby increasing the relevance and brand
proposition to customers and prospects
• Increased penetration of banking products into base, therefore
greater number of ‘hooks’ into customer
• Lower brand attrition and longer customer tenure/retention
• Increased customer value