IBM Software
Business Analytics
Banking
Banco Itaú Argentina
Optimizing customer cross-selling and acquisition
strategies with predictive analytics.
Situation
Overview
Business Challenge
In a highly competitive environment,
Banco Itau Argentina wanted to find a
more effective way to increase customer
satisfaction and lifetime value while
maximizing the bank’s profitability.
Banco Itaú Argentina is the Argentinean branch of Itaú Unibanco
Group, one of the 15 largest financial institutions in the world. Itaú –
Unibanco has combined assets more than $356.5 billion, 39 million
customers, 4,900 branches and 32,000 ATMs. The Group has a strong
regional presence in South America as well as offices in the main
financial centers: Frankfurt, Luxemburg, London, New York, Miami,
Tokyo and Shanghai.
Solution
The bank chose IBM SPSS software
and used it to create predictive models
that identified clients with a high
probability of accepting marketing offers.
Then it used IBM SPSS sales optimization
technologies to maximize the
effectiveness of its marketing campaigns.
The Argentinean retail financial market is highly competitive, with
several banks competing for the “minds and wallets” of target customers.
In this competitive landscape, Banco Itaú Argentina needed to increase
response rate to sales campaigns in order to increase revenue flow to fund
market share growth efforts.
Challenge
In mid 2007, the bank launched an effort aiming at accelerating its
organic commercial growth through the implementation of a superior
business intelligence solution that would allow it to define and execute
optimal customer cross-selling and acquisition strategies. The
underlying purpose was to increase customer satisfaction and life-time
value while maximizing the bank’s profitability.
In order to optimize marketing campaigns, the bank needed to answer
critical questions: who to contact, what to offer, when to make the offer
and how to make the offer.
IBM Software
Business Analytics
Banking
Solution
Business Benefits:
By implementing predictive modeling
and marketing optimization technologies,
Banco Itau Argentina was able to increase
revenue from existing clients by 40
percent in 2008 and its total retail
customer contribution margin by close
to 60 percent.
The bank chose IBM SPSS technology to meet the challenge, and
decided to implement it in four consecutive phases:
1) Predictive models, in order to select clients with a high probability
of accepting an offer
2) A “Cross-Selling Machine”, in order to anticipate the next best offer
for each customer in the stream
3) “Sales System Optimization”, in order to maximize the profitability
of the sales system
4) Customer-guided offers, in order to deliver personalized offers
Using IBM® SPSS® Modeler*, Banco Itaú Argentina implemented
predictive models to identify target clients with the highest purchase
probabilities.
Banco Itaú Argentina implemented a “Commercial Campaign Factory”
in order to quickly test and roll-out successful campaigns through the
“Cross-Selling Machine.” Based on this concept, the bank now has
20-30 rolling sales campaigns.
*IBM SPSS Modeler was formerly called PASW® Modeler.
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IBM Software
Business Analytics
“We wanted to increase
customer satisfaction
and life-time value
while maximizing bank
profitability through the
analysis and execution of
optimal cross-selling and
acquisition strategies.
That´s why we chose
solutions from SPSS, an
IBM Company”
— Mauricio González Botto, COO,
Banco Itaú Argentina.
Banking
IBM SPSS Event Builder was introduced to run the monthly
optimization of the bank sales system, to allocate finite marketing
resources, multiple channels with different costs, customer contact
restriction, campaign objectives and other business constraints, in order
to target the right customer with the right product, through the right
channel, at the right time, all while maximizing the customer’s financial
return to the business. Now before launching marketing campaigns, the
bank reviews the projected size number of targeted customers, expected
costs as well as the expected response rate and revenue for each
campaign.
Through the use of IBM® SPSS® Data Collection*, the bank developed a
direct “dialog” with the customers in order to get a better understanding
of customer needs and to be able to deliver personalized offers.
Results
Predictive analytics improved customer understanding and, in turn,
campaign targeting. The implementation of between 20 and 30 rolling
sales campaigns allowed the bank to increase revenue from existing
clients by 40 percent in 2008.
Predictive optimization capabilities leverage predictive analytics to
provide an unprecedented level of targeting and coordination across all
campaigns and outbound channels. This unique campaign optimization
approach allowed the bank to simultaneously decrease costs and increase
revenue. With this approach, Banco Itaú Argentina increased its total
retail customer contribution margin by close to 60 percent in 2008.
About IBM Business Analytics
IBM Business Analytics software delivers complete, consistent and
accurate information that decision-makers trust to improve business
performance. A comprehensive portfolio of business intelligence,
predictive analytics, financial performance and strategy management,
and analytic applications provides clear, immediate and actionable
insights into current performance and the ability to predict future
outcomes. Combined with rich industry solutions, proven practices and
professional services, organizations of every size can drive the highest
productivity, confidently automate decisions and deliver better results.
**IBM SPSS Data Collection was formerly called PASW® Data Collection.
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As part of this portfolio, IBM SPSS Predictive Analytics software helps
organizations predict future events and proactively act upon that
insight to drive better business outcomes. Commercial, government
and academic customers worldwide rely on IBM SPSS technology as a
competitive advantage in attracting, retaining and growing customers,
while reducing fraud and mitigating risk. By incorporating IBM SPSS
software into their daily operations, organizations become predictive
enterprises – able to direct and automate decisions to meet business
goals and achieve measurable competitive advantage. For further
information or to reach a representative visit www.ibm.com/spss.
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Produced in the United States of America
May 2010
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