News
Changing the channel
Forget direct mail and telemarketing -- the ATM may be the best delivery channel yet for leveraging customer data. by Ann All, editor
August 12, 1999
For years banks have been trying to get to know their customers better by investing big bucks in data mining and data profiling programs. Yet after arming themselves with all of this personal information, banks seem a little unsure of how to best utilize it. Direct mail and telemarketing are the old standbys of marketing campaigns, but Diebold and Naviant Technology Solutions have come up with a more high-tech alternative that uses the ATM to deliver targeted marketing messages to consumers. The new product, called iqCRM, will identify a customer as soon as a PIN is entered and then download personalized ads that will appear during the "please wait" portion of a transaction. Win Billingsley, vice president of Newtown Square, Pa.-based Naviant, said banks need to add ATMs to their marketing mix since an increasing number of bank customers "view the ATM channel as their only channel." He believes the number may be as high as 30 percent. Alan Falconer, Diebold's director of global systems sales, noted that while banks have successfully steered their customers away from the branch to less expensive options like the ATM, marketing programs haven't changed along with customers' habits. "We've been successful in creating cost-effective distribution channels. Now we must re-establish how we market to that customer base," Falconer said. Will a customer who just wants $40 be receptive to ads seen at the ATM? Both Billingsley and Falconer are convinced that the ads will be seen as a service, not a nuisance, if they are relevant to a customer. For instance, if a customer's three-year CD was about to mature, a list of options might pop up on the ATM screen allowing him to decide whether he wants to renew the CD, make an appointment to speak with a financial counselor, or receive a phone call or mailing with more information. Using a touch screen, the customer also can deny an offer. "Marketing is a given in our society," Falconer said. "If you had to choose, would you rather be interrupted at 7 in the evening by a phone call or take another couple of seconds to either accept or deny an offer of a product that is specifically tailored to you?" Falconer contends ads become annoying when they're not geared to a customer's needs. An apartment dweller doesn't want to see a pitch for a home equity loan, for example. Perhaps the ATM's biggest advantage from a marketer's perspective is its ability to collect response data. Such data is "nirvana" to a marketer, Billingsley said. "The profiles of people who say 'no' to an offer are just as valuable as the profiles of people who say 'yes.' Marketers use this information to refine their model and better target a campaign." This ideal, in which a marketer deploys an ad campaign, collects customer feedback and uses it to hone his pitch, is called a "closed loop." Falconer said it's the latest refinement in banks' approach to marketing. "They've gone from mass advertising to list management to focused customer relationships." Billingsley and Falconer think data management will help make standard ATM transactions more customer friendly and actually speed up the financial part of a transaction. For instance, a customer won't need to enter a language preference if his profile reveals he always conducts transactions in English. If he usually withdraws $40 from checking, an option might appear asking if he'd like to do so instead of instructions asking him to select an amount. "Even though we're going to have to get consumers used to a different experience, it will in the end be quicker, more convenient and more tailored to what they're looking for," Falconer said. Acknowledging that this use of data could be seen by some as an invasion of privacy, Falconer noted, "Financial institutions have always known how much money you make and how much you deposit. They've always used the utmost discretion with that information." Billingsley said banks have been using personal data to create marketing campaigns for several years now. "We're not creating a privacy issue. We're just adding a delivery channel." No banks have deployed iqCRM yet, but the product won raves at last December's retail delivery show. "We hope to have beta sites available by the end of the year," Falconer said. Billingsley predicted that an "aggressive" financial institution with an established marketing program and a number of newer ATMs will be the first to deploy the technology. That doesn't necessarily mean one of the biggest banks, he added. "Mid tier banks are always looking for a competitive advantage." Falconer said that the last two generations of Diebold machines are most appropriate for the technology, with a cost of about $500 to $1,000 to outfit each machine. Yet the partnership deal Naviant made with Diebold is not an exclusive one. The iqCRM software is not proprietary and may be used on other vendors' machines. Noting that many U.S. banks are mixed vendor shops, Billingsley explained, "It wasn't going to be marketable to deploy this with two different architectures. The only way it's marketable is to adopt one architecture and do it in a way that the software is open and will run on all vendors' ATMs."
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Diebold Nixdorf
As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.
