Sunrise at SunTrust

By combining state-of-the-art technology with a deft human touch, Southeastern financial services giant SunTrust Banks is growing its business one customer at a time

With $93.2 billion in assets and approximately 3.3 million accounts, SunTrust Banks is now the country’s ninth-largest banker. Yet executives at the Atlanta-based financial conglomerate say that they are now getting to know their best customers one transaction at a time.

That’s because earlier this year, SunTrust undertook a relationship management initiative whereby significant customer activities now generate personal contact from a bank representative within 24 hours.

The idea, according to bank executives, is to deepen the bank’s personal relationship with each customer, while capitalizing on the opportunities represented by significant account activity. “This is what we like to call a high-quality touch of our most important clients,” says SunTrust regional sales manager Patricia Lewis. “We define success as either a direct product sale, a referral, or just a good call. We’re positioning SunTrust as many positive things with the clients. We’re their partner, we’re not just interested in selling to them.”

The program works this way. Using communications management software developed by Harte-Hanks Inc., Billerica, MA, bank officials are able to detect significant account activity almost at the moment it happens. For instance, if a customer deposits a sum of money that the bank has predetermined to be noteworthy, say $10,000, the software – dubbed Allink Agent – automatically generates an e-mail from the computer on which it resides to a sales representative. The message will contain information about the transaction, instruct the sales rep to contact the customer, and suggest a course of action based on a set of rules.

Because significant account activity often indicates major changes in customers’ lives – changes that may call for financial instruments, such as a second mortgage or a college loan – personally engaging them during these times can lead to opportunities, says SunTrust director of marketing analysis Lisa Whitaker. “If a customer sells a business, as part of that they may accept a contractual agreement to get periodic payments totaling, say, $1 million. Now suppose something changes and they get a lump sum. Something has changed markedly in that customer’s life today, and unless I am in constant contact with that customer I may not know that,” she says. “So Allink allows me to create a set of rules that would say this is a trigger e vent, this is a good customer, here is additional information about that customer, and here is a recommended product that you may want to discuss with them.”

Beyond driving sales, the program is aimed at reducing customer attrition. “If you were to make a large withdrawal and you hadn’t been doing that previously, you may be about to defect,” Whitaker says. “Maybe you’ve started to close accounts and this is the last account. Now we’re able to catch that person in the process of final defection and, hopefully, intervene successfully. We would call that customer and do what we call a check up – asking them if everything is all right, how are we doing, and is there anything we could be doing to serve them better.”

Because the system is designed to capture virtually all aspects of a customer’s banking activity, Whitaker says it can generate countless other marketing opportunities: “Maybe it’s a customer who did not have a home equity loan, but we notice they had five transactions last month at Home Depot. We might contact that person and ask them if they need financing for the improvement they appear to be doing.”

MEASURING ROI

All this begs questions about the program’s impact on SunTrust’s bottom line. Whitaker concedes that SunTrust has not yet been able to quantitatively measure Allink’s impact because it has been in place for less than a year. However, she says the company’s metrics for traditional retention, upselling and cross-selling efforts can be applied to this latest initiative, multiplied by the increased volume of customer contacts the system affords. “We measure the impact by the number of sales and the number of referrals it generates,” Whitaker says. “But also by the number of goodwill and positioning calls. We don’t want our sales people to feel that just because they didn’t get a direct product sale out of a telephone call they are not succeeding with the program.”

Fred Chapman, Harte-Hanks’ vice president for packaged software, puts it this way: “The proven ROI has not been accomplished yet, but from a qualitative point of view they are seeing the results. And now we have test and control groups in place so we will be able to come back with the quantitative data. However, it’s intuitively clear that detecting certain changes results in opportunities that would not be there three or four weeks down the road.”

Meanwhile, anecdotal evidence suggests that since instituting the program, the bank has been able to strengthen its relationship with its top customers. “The system has prompted us to make a number of retention calls, and one of these was quite significant,” says SunTrust regional marketing manager Sheila Blom. “We’d had some staff turnover at a particular branch, which caused one elderly woman to begin closing her account – basically because she no longer knew anybody. So one of the branch managers got the Allink message indicating the woman was leaving. She called, introduced herself, and said she would like to meet. Ultimately, it turned out they had some golf and bridge partners in common and the relationship was saved.”

A SIMPLER APPROACH

While maintaining that type of relationship with each of SunTrust’s 3.3 million customers throughout the Southeast might seem daunting, if not impossible, that’s exactly what Allink Agent is designed to do. The system is essentially a set of software programs that are designed to run behind the scenes on top of an enterprise’s existing database. However, the software is not dependent on the database being updated. Instead, it monitors transactions in real-time before they enter a company’s master customer file.

“If there was a significant deposit, it would detect that transaction and map it against the strategic database below,” says Harte Hanks’ Chapman. “Transactions are fed into Allink by the bank’s operating system and dropped down via LAN before it reaches the operational audit file. It actually makes a copy of that transaction before it hits the audit file,” he notes.

In terms of system architecture, Chapman says this approach is optimal because it does not require the software to perform an audit of SunTrust’s entire customer file each time it looks for significant transactions. “In the past, a lot of people have tried to deal with this problem by building a series of database triggers or rules that would be run against the entire database,” Chapman says. “But if you have 100 triggers and 100 million records, you’re running 100 times 100 million every time to look for an opportunity. What our system does is take one transaction at a time, apply the appropriate rule, and look at that one customer’s record only. It’s much more efficient because only what’s needed to be run is run, not 100 percent against 100 percent every time.”

Yet despite the efficiency of the system, Chapman notes that SunTrust is not yet extracting maximum value from it. For instance, he says that at present the company is using Allink primarily to drive just one channel of communication – e-mail to the branch representatives, who then telephone the customer. However, Chapman feels that SunTrust could gain even greater advantage if it tied Allink to all its customer touch points. “I would love to see all sources coming in and all channels using the back end,” says Chapman. “But SunTrust has three or four sources in and is using only one or two channels [e-mail and direct mail] on the back end. Other channels they might implement could offer messages that come up on the ATM or statements.”

SunTrust is limiting its implementation of Allink for a number of reasons, including the fact that year 2000 issues are consuming much of the company’s IT resources at present. “Basically, they have put a moratorium on any new IT work until they are finished with their Y2K issues,” says Chapman.

THE HUMAN TOUCH

While technology is a big part of SunTrust’s efforts to get closer to its customers, bank officials say the right human touch, deftly applied, is equally important. For starters, direct contacts must be handled in just the right way, lest customers begin fearing that Big Brother is watching their finances a little too closely. With that in mind, SunTrust sales reps are trained that upon receiving an e-mail prompt from Allink, they should address customers in terms of their relationship with the bank as a whole, rather than point out any single transaction. As Blom notes, “We don’t start the conversation by saying, `Hey, I see you withdrew $10,000 today. What’s up?'” She also reports that the scripts contained in the e-mails are developed at the regional level and thus reflect local considerations.

Additionally, Blom says sales staff are trained to gather as much customer information as possible before making the contact, including polling their colleagues. “One of the things that we ask them to do when they get the e-mail message is to pull together all of the customer’s data to get a full picture of what is going on. And I mean to the point of talking with their co-workers to find out, for example, whether Mrs. Smith was in yesterday and did she say something I need to know before I pick up the phone.” Blom adds, “We have set a 24-hour response time as the standard. If they walk in and there is a message on their PC, we expect them to contact that customer within 24 hours.”

Of course, all this has placed additional training demands on SunTrust’s sales staff, since many had not previously worked with the detailed customer information that is typically contained in the messages generated by Allink. “There’s been a great need for MCIF [master customer information file] training,” says Lewis. “The e-mail messages have a lot of data in them and we had to teach our sales people what it all means. It typically has the transaction amount, cycle codes, product penetration, the new balance. This is getting into client demographics. We have not spent a lot of time with them on that before, but now we have to.”

Despite the fact that sales staffers must now invest some time to learn the system – about six hours of formal training, according to SunTrust – Blom says most have accepted the program enthusiastically because it ultimately means more business for them. “It has made our sales staff much more comfortable with teleselling because these are warmer leads. And it’s driven our other teleselling opportunities as well. It makes them more successful and they’ve come to expect these leads. Now when they come in the morning and there are no leads, they’re disappointed.”

Indeed, SunTrust officials say this latest CRM initiative is ultimately designed to increase loyalty by creating a relationship that, from the customer’s point of view, is irreplaceable. That is, with banks and other financial institutions – including the new breed of Web-only operations – competing for an ever-larger share of customer with ever-narrowing interest rates, SunTrust is looking to differentiate itself by offering lucrative services it feels will be difficult for others to replicate in the absence of a close relationship with that customer. “There’s only three ways to grow and become profitable,” says Whitaker. “You have to deepen your relationship with existing customers, acquire new customers if you want to increase your market share, and you have to retain the customers you have. Deepening our existing customer relationships is our priority right now.”

December 1998 to March 1999

Rules Discovery

The basic premise behind rules discovery is to construct the appropriate logic (in the form of a program template) to identify and evaluate specific transactions (tactical) in the context of a specific customer’s profile (strategic view) and recommend a customized and personalized one-to-one communication, supporting either a sales or service action. Rules are defined in three areas:

Data Rules

Transaction types and transaction amounts

Customer Strategy Rules

– Suppressions/exclusions including: do not mail, do not call, recent contact (for example, within last 30 days)

– Profitability data: actual dollar amount, profit decile, potential profit

– Segment: based on derived or appended segmentation scheme

– Next product to buy (or propensity to buy)

Channel Rules

– Channel preference (to which channel should the lead be sent based on client preferences or profit value to the organization)

– Rules to assign leads for direct contact to sales/agents/officers: how leads are distributed – fax, e-mail, telesales, etc.

– Rules governing management of leads per channel, e.g., schedule for distribution of leads (date/time), volume of leads (batch X for direct mail or telemarketing distribution), volume per sales/agent/officer per day

December 1998 to March 1999

Source Data Definition

Source data available to the Allink Agent system was reviewed for content and format. SunTrust is currently using financial transactions, however, any type of customer interaction can be fed to Allink Agent. Integration assessment was performed during this time in which Harte-Hanks sought to understand how, when and where data would be made available to the Allink Agent system.

March 1999 to May 1999

Program Development

The rules gathered during the discovery period were translated into Allink Agent programs. Several iterations were made to achieve desired quality and quantity of leads.

May 1999 to June 1999

System Deployment

This included the actual installation and integration of the source data and channel systems.

June 1999 to September 1999

System Production – Pilot Bank

The system was put into live production mode running daily transaction files and automatically producing leads to branch officers.

October 1999 to December 1999

Systemwide Rollout Scheduled

Addition of banks

Addition of channels

– Teleservices

– ATMs