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CHALLENGE Distributing marketing while centralizing brand and message |
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Washington Mutual, like many large diversified financial institutions, has brick-and-mortar
locations or stores which house their banking operations, Washington Mutual Financial
Services (WMFS) advisors and representatives, and loan consultants. Each has its own
unique marketing requirements, whether it’s for retail services such as checking and savings
accounts, or WMFS offerings such as investments. The corporate marketing department for
WaMu supports over 2200 locations, 2500 loan consultants, and 500 WMFS representatives.
Given the high volume of requests for localized marketing campaigns, effectively supporting
them on a one off basis is an expensive and time consuming proposition. Each request would
require management, creative resources, and logistics support.
Given the pressure to reduce the sales cycle, representatives will sometimes try to coordinate marketing activities themselves. This situation can be common in large diversified financial companies such as WaMu, or in P&C insurance firms with distributed agents. By not providing these agents or representatives with marketing resources on a timely basis, the integrity of the corporate brand is placed at risk. Agents may send out campaigns with images out of compliance with the corporate style guide and messaging that is inconsistent and in some cases contradictory to the corporate brand and message. Yet, trying to provide local sales people with custom marketing support is not simple. The cost for a centralized marketing team to develop relevant custom materials, on-demand, for thousands of different locations on potentially dozens of products make it virtually impossible. Washington Mutual wanted to create a solution that would allow them to overcome this problem. |
Given the high volume of requests for localized marketing campaigns, effectively supporting them on a one off basis is an expensive and time consuming proposition. |
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Financial marketing trends |
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In addition, it was important that WaMu and Raine consider other major trends facing the
financial industry when designing the Campaigns-on-Demand solution, including:
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 Falling direct marketing response rates
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One major challenge for the entire financial services industry has been falling response rates
in direct marketing, which appears to be strongly correlated to the increasing volume of
mail. The 2003 USPS Household Diary Study showed that those consumers who had at least 6
financial accounts and insurance policies received, on average, between 11 and 14 pieces
of direct mail per week. According to Tom Collinger, associate professor of integrated
marketing communications at Northwestern University, this wide “shotgun” approach to
direct marketing was typically successful for financial services providers, allowing them to
generate solid return on investment even with relatively low response rates (DMA 2005).
Today however, this is not the case. Response rates have fallen, and the number of pieces
mailed has jumped in response. In 2005, the response rate for lead generation direct mail
campaigns was 1.43%, which was down from 2.09% in 2004, and 2.48% in 2003 (DMA 2005).
According to an article on financial direct mail marketing published by the DMA, the
reason response rates are falling is because of “too many envelopes going through too
many mail slots.” In 2004, financial institutions spent a record $13.2 billion on direct marketing
campaigns, 36% more than they spent on measured media (Advertising Age, 2005), yet
despite direct marketing budget increases, response rates have continued to decrease.
In fact, it is safe to conclude that the increased volumes have exacerbated the problem
by greatly increasing the amount of mail “clutter” a consumer receives. With consumers
growing more and more tired of irrelevant messages and a growing amount of junk mail, it is
clear that a new strategy is needed.
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“too many envelopes going through too many mail slots.” |
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Complex and evolving regulatory and legal guidelines
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Another issue confronting financial services companies is compliance with continually
evolving regulations. Examples include “do-not-contact” lists and fair lending practices. It is
important for any company to adhere to regulations, but particularly financial services given
the level of scrutiny they are under. It is likely many of these regulations have not reached
a final form. We will continue to see lawmakers debate and legislate on these issues for
some time. For this reason, marketing must be able to stay on top of a changing regulatory
environment and ensure that all of their activities are compliant and tracked in the event
that an accusation of wrong-doing is made.
One regulation that is unique to marketing financial services deals with fair housing and lending rules. According to the FDIC, a company can commit illegal lending discrimination simply by failing to market enough in predominantly minority areas or by using media channels which do not sufficiently reach minorities. Advertised rates must not be arbitrarily different from one area to another. Breaking rules, or for that matter being unable to prove otherwise, on how mailings are sent can land a financial services company in potentially costly legal troubles. For this reason, it is important that any direct marketing program be able to meet the guidelines set by these regulations and offer reporting to show compliance. |
...marketing must be able to stay on top of a changing regulatory environment... |
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Difficulties enforcing data security and integrity
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For a large financial services company, customer information is both an incredible asset
and a potentially massive liability. With so much data, including addresses and phone
numbers, social security numbers, age and demographics, financial and credit status,
as well as purchasing habits, a financial services company is armed with a great deal of
data to segment and use to identify potential new leads. With this information comes a
great deal of risk, in that the improper usage of the data, or worse - data theft, is very
damaging to both the customers affected and the offending organization. It is a serious
and growing problem.
Aside from the negative impact of bad PR from a data theft, the costs of informing and
handling hundreds of thousands of affected customers and absorbing fraudulent charges
and related costs can be staggering. In January of 2006, Ameriprise Financial joined a long
list of similarly affected companies, informing over 225,000 customers of data theft. In May
of 2006, Wells Fargo Bank reported that confidential information about mortgage customers
may have been compromised. In June of 2006, ING Bank had the financial data and social
security numbers of 13,000 clients stolen. These types of cautionary tales shouldn’t prevent
companies from taking full advantage of their customer information, but it is critical that any
marketing activity involving customer data be undertaken with caution.
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...marketing must be able to stay on top of a changing regulatory environment... |
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SOLUTION An on-demand custom direct marketing platform |
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Washington Mutual needed a partner who could help them build an online, on-demand
marketing platform that would allow local managers and sales representatives to order
customized marketing materials with branding controlled from corporate. The solution would
also need to effectively address several key issues:
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Marketing flexibility
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Like all large financial institutions, Washington Mutual has a wide array of products and
services. Consumer banking, investments, and loans are only a few examples. Many of
these services are general, and others apply to more narrow groups of people. A successful
marketing platform would need to be able to host programs that promote specific products
to specific people in a specific way.
To do so, Washington Mutual opted to divide their platform into categories, including financial services seminars, grand openings, retail marketing, and home loans. Each of the categories have campaigns specific to the needs of each group. For example, the seminar campaigns allow Washington Mutual Financial Services sales representatives to launch a targeted mailing to invite current financial services customers and other bank customers to attend a seminar on a specific financial topic, such as investing for retirement or estate planning. The program could be customized by the sales representative and also included everything they needed to promote and run the seminar, such as presentations, custom posters, brochures, and even pens and pads of paper as giveaways. 
In another example, a grand openings program was set up for stores to receive a customized
event kit to help promote the new, more convenient, banking location. Retail marketing
programs allowed local stores to promote a specific Washington Mutual product or service to
a targeted audience. The newest program, currently in development, will allow Washington
Mutual loan consultants to send targeted communications to their local markets.
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Retail marketing programs allowed local stores to promote a specific Washington Mutual product or service to a targeted audience. | |
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Ease-of-use
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Although a custom “campaign-in-a-box” tool for Washington Mutual sales representatives
and branches was something that was very much in demand, adoption and usage of
the product could definitely be jeopardized by a complex or difficult to understand
user interface. In order to simplify the system, a user’s sign-on would need to determine which campaigns they could order. For example, a financial services representative would only see seminar campaigns, and local branch managers the retail marketing programs. This eliminates users from experiencing confusion in determining what programs are relevant to them. Once logged in, the process of setting up a campaign and launching it would need to be straight-forward and easy, with the appropriate confirmations and approvals built in. In addition, creating an automated system for list management would streamline and improve the user experience. |
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Targeted recipients
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Like any financial institution, Washington Mutual’s customer database includes a great deal
of information. By leveraging this data set, it was possible to create an automated system for
creating a targeted list for each campaign.
On a regular basis Washington Mutual would provide a large population of leads to a custom Raine list segmentation tool. Based on pre-determined criteria the best possible leads for each individual campaign could be dynamically chosen. Lists would require segmentation based on geo-radius data derived from latitude and longitude, as well as demographic and behavioral data points. It’s important, for example, that a newly married couple looking for their first house doesn’t receive an invitation to a seminar on estate planning. 
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...the best possible leads for each individual campaign could be dynamically chosen. | |
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Corporate level budgetary controls
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In terms of gaining pricing controls for putting together and launching a campaign, a
centralized marketing platform is ideal. When campaigns are conducted ad hoc outside
of an effective marketing platform by the local stores, with or without marketing support, it
makes it difficult to budget and plan.
However, the number of campaigns launched, and therefore the dollars committed is up to the local users. To manage this, administrative allocation dollars would be needed to limit campaign orders to ensure budget over-runs do not happen. Budget reporting would also be needed to help Washington Mutual administrators track the usage by region or store on an ongoing basis. |
....administrators track the usage by region or branch on an ongoing basis. | |
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Raine Media Developing a custom marketing platform |
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Raine Media was brought in to create Washington Mutual’s custom marketing platform.
Ninety days after beginning development, the first customizable campaigns were loaded
into the system, giving their Financial Services team access to a number of potential seminar
offerings, and delivering corporate marketing the control and oversight it required.
Raine followed its “Roadmap” process to design and build the Campaigns-on-Demand solution. The process is broken into three parts: Discover, develop, and deploy. |
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Discover
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| Taking the time to truly understand a client’s needs is always a critical factor in achieving success. Raine was extremely thorough in mapping out Washington Mutual’s needs for the Campaigns-on-Demand marketing platform. Raine researched and planned how to best take advantage of the marketing structure at Washington Mutual while addressing the key areas of improvement the company was looking for: improving marketing’s ability to track response rates and results, achieving compliance with complex and evolving regulatory and legal guidelines, and enforcing data security and integrity. In addition, the platform itself would need to demonstrate strong marketing flexibility, ease-of-use for the end-user, effective customer segmentation and targeting, and the enforceable budgetary controls discussed above. | Washington Mutual was involved at each step, from the discussion and creation of business rules to the user interface to the testing of the program, dramatically increasing satisfaction with the program. | |
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Develop
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| Once all of Washington Mutual’s needs were mapped out and the blueprint of the solution had been created, Campaigns-on-Demand could be constructed. One of the most important elements of the Raine Roadmap process is the integration of the customer into the solution team. Washington Mutual was involved at each step, from the discussion and creation of business rules to the user interface to the testing of the program, dramatically increasing satisfaction with the program. Raine also follows PMI standard procedures and an aggressive timeline to get most solutions launched 90 days following the beginning of development. | ||
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Deploy
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| The Campaigns-on-Demand marketing platform was launched on time – initially providing support for 500 financial services representatives. Once the program is up and running Raine works with its clients to gather information on the effectiveness of the program to create plans for continual improvement. Washington Mutual saw immediate results, and has also worked with Raine to continually enhance the program. Since the initial launch, the audience for this system has grown significantly. | ||
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RESULTS |
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Steve Sonnen, the Vice President of Marketing Delivery for Washington Mutual was pleased
with the Campaigns-on-Demand platform: “Our marketing team has been very satisfied
with the response to the campaigns from this platform. The improved customization and
targeting has led to definite improvements across all of our WMFS offerings, particularly in
our new investors and Grand Openings program.” By providing its sales staff and stores with
custom marketing campaign support, the new campaigns achieved excellent results. A
three month study on the effectiveness of the campaigns showed an overall improvement
of 129% in the total number of WMFS accounts, and a 206% increase in the total amount of
its customers’ investment assets.
Centralizing the local marketing efforts and managing them through the Campaignson- Demand system also allowed Washington Mutual to achieve its other goals, including adherence to regulatory and legal guidelines. By automating the way data is handled and setting global business rules within the system, Washington Mutual is able to ensure that no preferential rates or offers are sent out to any one area, and that there is no geographic bias in any of the campaigns. Another advantage to streamlining and automating the way that data flows into the system is the fact that data is kept completely secure. The segmentation model and business rules for selecting campaign recipients can be adjusted without compromising any of Washington Mutual’s customer information. Data is managed in a secure environment, and at no time is there a need for it to be placed in any type of insecure location. The centralized system also allowed for increased budgetary control and reporting, allowing corporate marketing to set limits for regions, stores, or sales representatives and report on the usage of the system. Reports also allow corporate marketing to monitor and track adoption and usage of the platform so that they can determine any necessary adjustments that need to be made to campaigns. Taking the information gathered from the program, Raine has continued to make improvements, enhancing automation and business rules. The next challenge for Raine and Washington Mutual will be to create a module for the 2,500 loan consultants the company employs. For example, expanded campaign templates and functionality will allow loan consultants to upload their own photos to customize their templates and also pay for additional mailings with their own credit card. The system has also been successful on a cost basis. By reducing the amount of materials being produced and wasted, centralizing marketing support for its constituents, improving data processing, and creating the system to maximize production efficiencies, Washington Mutual has seen a substantial reduction in costs. |
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CONCLUSION |
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| In every respect, Washington Mutual has seen powerful results implementing a custom marketing platform designed and built by Raine Media. For Washington Mutual, flexibility was crucial. Raine Media was able to create it, providing a solution that allowed simple direct mail campaigns, or much more complex multi-drop seminar mailers – complete with list integration and segmentation. By connecting the system to a manufacturer, Raine was also able to help Washington Mutual realize substantial cost savings. | ||
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Raine Media is a management consultancy specializing in helping its clients achieve market differentiation by building effective customer information strategies. Raine leverages its research and analytical capabilities, data technology resources, and its detailed knowledge of a wide number of industries to build and deploy innovative solutions to solve business performance challenges. For more information, please visit rainemedia.com |
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