Bank sees 168% ROI in a year of CRM
In Taiwan, the Chinatrust Commercial Bank has reported the results of its recent implementation of Teradata's CRM system and data warehouse, with its initial event-based marketing programme delivering 168% return on investment after the first wave of ten targeted campaigns.
The retail bank implemented the CRM system at the beginning of 2005, and immediately launched a series of event-based marketing campaigns. The bank has reported that its first ten campaigns were completed in the first half of 2005, generating more than 24,000 new business leads, with a success rate of 25%.
This compares favourably to an industry-average success rate of 1% to 2% for traditional, product-based direct marketing campaigns (figures quoted by Teradata). The bank now plans another thirty such campaigns for the second half of the year.
Up to 220% ROI The bank estimates that the first ten campaigns alone generated some NT$479 million (approx. US$14.3 million) in new business, representing an average return on investment for the project of 168%. The most successful campaign was a win-back campaign that targeted former customers, yielding a 52% renewal rate. Another campaign focusing on customers' loan needs achieved a 32% success rate, while a customer retention campaign produced a success rate of 24% and an ROI of 220%. After the success of this initial project phase, the bank now plans to expand its event-based marketing programme to hundreds of campaigns by 2007.
Event-based marketing Michael Sung, senior vice president of Chinatrust's strategic marketing department, explained: "The Taiwanese financial market is mature and extremely competitive. We originally had a very competent marketing team executing more than 300 direct marketing campaigns a year and achieving industry-average returns, but we were sure we could improve on that by moving to event-based marketing with a tighter customer focus."
After evaluating three different data warehouse solutions, the bank settled on Teradata's CRM and data warehouse platform which handles daily updates of transaction data and allows the bank to design, implement and monitor hundreds of multi-step campaigns at once. Teradata also provided the bank with a CRM business consulting service to build a strategic plan for the bank, and to impart knowledge, experience, methodologies and skills to the bank's local marketing and sales teams.