Potential: Revealed

Strategic Thinking, Innovative Ideas, Growth Marketing, and Revealing of Potential

Big Data, Big Results

Recently a client of mine enthusiastically unveiled some fresh results from cross-sell marketing programs they were powering for a network of several dozen financial institutions (FIs).

Their enthusiasm was warranted: the results showed significantly superior improvements in impression-to-purchase ratios over traditional methods. The improvement in fact was over 3 times better!

Big Data Marketing Results Are Better

This is an excellent example of the implementation of Big Data in a direct marketing application.

Traditional methods that an FI uses for targeting (when they use targeting at all;  but that’s another story for another time) usually involve tabulating customer account data (e.g., who has a mortgage but doesn’t have a home equity line of credit?) and purchasing third party data for appending (e.g., demographic data based on zip code of the customer).

I like to call this “Who You Are” data. It is valuable but not rich and often out of date. It is often full of invalid indicators because all you can tell by looking at your account data for a customer is whether they have a home equity account with you … it doesn’t tell you anything about whether they have an account with another FI.

What’s needed is Big Data which is data that comes from many sources, is rich and voluminous (e.g., heavily sourced from transaction systems such as debit and credit card processing, bill payments, money transfers, ACH debits and credits, loan processing, etc.), and is handled by an analytic platform that can make sense of it and deliver it to a point of customer interaction or business decisioning -and if needed, in real time.

With Big Data you can add two key dimensions which I call “How We Behave” (which is a predictor of future behavior) and “What We Can Do” (which parses from the data what we can do based on our financial position and the trends in it). With these three dimensions a marketer trying to effeciently target customers with the right cross-sell offer has the insights needed to deliver superior results.

It is pretty cool! I’ll look forward to sharing more specific and detailed results when they are released soon.



Not Fearless … “I Just Proceed Nonetheless”

One subject I’ve often discussed with friends and colleagues is about making difficult decisions, the reasoning behind those decisions, and the personal characteristics involved. What are the hallmarks of making good decisions in a challenging environment or situation?

There are many factors but for this post I want to refute – with the help of a wonderful example I found today – one factor that I think is either over emphasized or perhaps not really a factor at all. That factor is: fearlessness.

The definition is “to be free from fear”. If you are faced with a difficult decision whether in a personal sphere, in business, or other arena is a lack of fear a good thing? It certainly might help you get over the hump, so to speak, and to act upon a decision you might have based on your judgment, your morality or ethics, particularly if the consequences for failure are dire enough (e.g., failed business, failed relationship, even life-or-death).
This has always troubled me though. I just seems that as humans we all have fears and given they are seemingly universal then those fears are there for some useful purpose (and we should be paying attention to them!).

SpaceX, the company founded by Elon Musk sent the Dragon spacecraft to the International Space Station

Yet I like this interview of Elon Musk, founder of Paypal, SpaceX and Tesla Motors (and he’s only 41!). Especially the last line of this part of the interview:

“I wouldn’t say I have a lack of fear. In fact, I’d like my fear emotion to be less because it’s very distracting and fries my nervous system. I have this sort of feeling that something terrible could happen, like all of our flights could fail and Tesla could fail and SpaceX could fail, and that feeling of anxiety has not left me, even though this has been a great year. So I feel fear quite strongly; I just proceed nonetheless.

I would say that fear is part of what stokes Elon’s drive and his attention to what is important in his business decisions. Fear is a means but the end – the decision to and actually act – is all about bravery. To move ahead despite the risk, despite the fears is a concious act, not an unconcious act (as fearlessness seems to be, at least to me).

So, may you recognize your fears. Confront them and use them to inform your decisions. Then summon your bravery to act with confidence on the decisions you have made, or as Elon says “just proceed nonetheless“.

(P.S. read the rest of the interview with Elon Musk. It is quite interesting.)

From Insight To Action In Under A Minute

One of the toughest challenges most businesses, including and perhaps especially the many small financial institutions in the U.S., face is having all three key ingredients for being a successful marketer:

1. strategy and plans to use data to target their customers with relevant offers (to get from talking about it to doing it)

2. technology to create the targeting analytics and deliver the offers (to be able to make sense of the data and take action)

3. investment in skills and resources to sustain marketing efforts (direct marketing is largely a numbers game – you have to get beyond the one-time and piecemeal marketing that is highly ineffective)

I’ve certainly seen this with clients of mine and in listening to the experts in the area of direct and digital marketing, and data analytics.

At FinovateFall 2012 this week there continues to be an emerging set of companies that are providing ways for financial institutions to breakout – particularly with the first two ingredients. But I believe there is just one company, Segmint, that is also tackling #3 – by taking the required skills and resources and putting them into a box – or more accurately behind OneButton. Making it ultra easy to take action on what the data is telling you and reach the right customer at the right time with the right offer, in real-time wherever a customer might be: online, mobile or social.

So easy that targeted FI marketing campaign can be selected and launched in less than a minute.

All the work is done for the marketer, as long as they have #1, #2 and especially #3 are taken care of automatically by Segmint’s platform and solution.

See the post on Finovate’s blog from the Fall 2012 conference this week. I’ll also update you with a post in a week or so with the video Finovate will make available of the presentation by Rob and Nate.

Let me know what you think too!



Mobile Banking Future Has Not Arrived …. Yet

 Interesting study out of the  U.K. on Mobile banking adoption and usage. A few snippets:

– Smartphone users registered at just 17.5 percent in terms of those who paid bills with their devices

– yet half of all desktop users said they paid bills

– 45 percent of those surveyed had heard of a mobile wallet

– less than half of those (about 20%) expressed interest in having one

If as conventionally believed Europe and Asia lead the U.S. in adoption and use of mobile for financial services and payments, then should we expect even weaker numbers if this survey was done in the U.S.? The future has not arrived … yet, at least in terms of higher levels of adoption and higher value usage for mobile in the area of financial services and payments. Until there is significant growth in usage beyond merely checking account balances and finding a nearby ATM, the potential of mobile will continue to be hampered by lack of consumer interest or weak consumer experience and functionality, or both. . .  How and when will this change?

Electronic Bill Pay, After All These Years

Recently I did some work for a client who asked “tell me about the market for bill payment services in the United States?” I was in this business for a number of years as an executive for the market’s largest provider of such services but had not looked at the market at a broad level since 2008. I thought it was interesting to see how things have unfolded and thought I would share with everyone.

First of all, even though electronic bill payment is relatively mature I talk to a lot of people who are quite knowledgeable about financial services, payments and technology who don’t really understand the bill payment ecosystem nor the differences between the two main models. Below is the fastest growing model and soon to be the largest in terms of adoption and usage, referred to as Consolidated Bill Payment. Named such because it is a service that consolidates a customers’ bills and payments at a single point – most often through their bank.

(click to enlarge)

The second model which is popular and growing quickly but not as fast is known as Biller Direct – it is projected to be surpassed by Consolidated in terms of usage volume in the next few years. Biller Direct as the name implies is where a consumer pays their bill directly to their biller (for example, logging into your cable provider’s website and paying your monthly bill).

Biller Direct Ecosystem (click to enlarge)

I’ve also included here a snapshot of the size of this market overall. It has grown well since 2009 and projected to continue at overall a double digit pace for key electronic methods – ACH debit at 12% (for example, when you have your mortgage automatically deducted each month from you checking account), Online Biller Direct at 13% and Consolidated at 18.5%.

Bill Pay Market Size Projected (click to enlarge)

Behind these number though is a natural slowing of this growth rate. The rates quoted just before are the compounded average rate over 5 years from 2009 to 2014 but the rate of growth from any year to the next year is decelerating. It is one of the key challenges to providers in this market – how to deal with a rapidly decelerating growth rate without resorting to price and volume as your only competitive weapons for revenue growth. As evidence, the anticipated revenue growth rate for providers selling the Consolidated model is just 8% per year from 2009 to 2014 (and as with volume growth rates, is decelerating toward zero as 2014 approaches and we get beyond it).

Big Data Drives ‘Loyalty Trifecta’ for Banks

A good panel at this week’s Payments Connect 2012, including a client of mine, Rob Heiser, CEO of Segmint.

Check out the transcript of the panel discussion which is very informative, here.

Let me know what you think too!


Mobile Payments: Informative Hype

News and hype about all the things we can – and are supposed to one day be able to – do with our mobile phones is itself an industry. As with most emerging technologies with great potential this is a natural phemonema. Recently I saw this infographic published and found it to be both well done and informative (if not in and of itself also adding to the hype it hopes to cut through). I thought I’d share it here also and invite commments.

Personally I think the approach by Starbucks has the most promise in terms of generating real evidence about what level of interest and usage might exist with a mobile payments solution. Since it is Starbucks-only it is simple and not as subject to complex technology and adoption issues (e.g., point of sale technology updated or replaced to enable mobile payment acceptance, training and customer service issues of high-turnover retail sales personnel) that plague the other types below.

And it is not an insignificant fact that the ONLY mobile payment type that has any traction  today is the one used to buy relatively low importance, low priced things like ringtones and games. And outside the U.S., where supposedly adoption and usage has dwarfed the U.S., the by-far leading uses are parking and other incidental transportation purchases. This after a decade of hype that mobile payments were going to take over all manner of payments across the globe.  Seems like great potential is still yet to be fully and clearly revealed. Stay tuned (and wary).

The most important mobile payment infographic. Ever.

The most important mobile payment infographic. Ever.
Compliments of MobilePaymentsToday.com