'Just in time' customer communication.

• Author: Caplan, Jeffrey
• Position: Customer Analysis - Proactive marketing for the financial services industry - Brief Article

Banks and other financial services institutions typically think of two types of customer communication: planned (that is, marketer initiated), and reactive (that is, in response to a customer-initiated contact). Now, in an effort to further solidify and expand customer relationships, they're beginning to add a third: proactive (that is, in response to changes in customer behavior).

Planned and reactive communication

The first two hardly require an explanation. Banks regularly plan campaigns to promote a product or service, or to reach a segment of customers because of their value or propensity to purchase products/services--or their propensity to defect. Banks choose customers for these promotions using database queries or modeling algorithms that segregate and/or rank customers in terms of likelihood of response. A significant aspect of this approach, and one that distinguishes it from reactive and proactive communication, is that the process is calendar-driven. Marketing decides when to launch the campaign, ranks or segments the customer base at that point in time, and then fires off a communication on the planned date.

Reactive communications occur when the customer initiates a contact. At that moment, the bank seeks to understand what promotion, if any, is appropriate for the customer, and then immediately delivers that promotion. Technologies that support this approach include collaborative filtering and/or offer-segment mapping, both of which essentially seek to identify offers that other similar customers have responded to, and to make the same offer to the customer at the time he or she has initiated contact.

When customer behavior changes

The emerging third approach is proactive marketing. In this case, it is neither the calendar nor the customer's contact that triggers communication, but rather a change in the ongoing behavior pattern of the customer.

Proactive marketing requires a slight shift in thinking--and an infrastructure that allows for an ongoing flow of data (so it can be interpreted over time) as well as an ability to act in a timely manner. The mental shift centers on thinking...