KeyBank: Organizational Alignment
Client-Focused ApproachMarketSpaces
Large Corporations
Middle Market
High Net Worth
Small Business
Emerging Affluent
Mass Market
Value Proposition Special needs requiring
customized solutions and advice across a broad product array.
Standard solutions for most problems but with the option of a custom solution on occasion.
Delivery Service Product
Business Model
Communication
•Process•Technology•Human Capital
KeyBank decides to take a segment focusBased on new corporate priorities….
“I want KeyBank to be at the forefront…of a movement away
from an obsession with selling products to one that emphasizes
meeting client needs.”Henry L. Meyer IIICEOKeyBank
It becomes incumbent on MarketingTo demonstrate the value of this approach
Client-Focused ApproachResistance to Segment Approach - Silos
Ret
ail
Ban
king
Cons
umer
Fina
nce
S
mal
l
B
usin
ess
Inve
stm
ent
Man
agem
ent
A Mandate From Above
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Marketing Creates Believers“To bring our segmentation efforts to fruition, we had to find a way to prove the value of segment-focused customer initiatives across the organization.” Chief Marketing Officer, KeyBank
Valu
e
Segment Assessment MatrixHigh
Low
GrowingFamilies
YoungTransitionals
Demand
Client-Focused ApproachA Transparent Evaluation Process Creates Buy-in for Segment
InvestmentsSegment Initiative Competition*
Segment-based initiatives are consistentlyScreened by the senior leaders of KeyBank’s product and functional areas. Thus, each “winning” initiative is likely to be accepted by all product organizations.
Initiative Screening Criteria: • Yields X percent projected ROI• Provides a sizeable opportunity• Addresses a specific segment priority• Delivers an enhanced segment experience• Aligns with corporate priorities• Executed on appropriate time horizon
Executive Operating Committee
PreworkSegment Initiative
Brainstorming
Stage 1:High-Level
Benefit Hurdle
Stage 3:Pilot Results
HurdleFully Funded
InitiativesStage 2:
Business CaseHurdle
Segments
Grow
MaintainControl
CostControl
RiskValu
e Ap
proa
ch Initiatives that are obvious
“ no’s” are killed by the
EOC before any large-scale
analysis
Finance standardizes and Tests assumptions
in order to Establishfinancial objectivity
Monitoring pilot results lowersUncertainty around segment-investments and generatesOrganizational momentum
The Key to SuccessWinning initiatives build cross-business support for increased segment-based
investment….
…and encourage KeyBank to expand the breadth and
scope of the program
Marketing Budget AllocationIllustrative
Perc
enta
ge
2003 2004 2005
KeyBank isIncreasing thePortion of theMarketing budgetAllocated toSegment-basedinitiatives
Segment-Related Marketing SpendAll Other Marketing Spend
“Quantifying the financial impact of segment-focused initiativesIn our growth and differentiation strategy has led us toReallocate substantially more of the marketing budget toThese efforts.” Chief Marketing Officer,
KeyBank
Show Them the Money
Next Steps for KeyBank
Segment Champions – KeyBank isAppointing full-time segment managersto head each segment team
Project Manager Pool – KeyBank iscreating a pool of project managers toImplement segment initiatives
Incentives – KeyBank is planningto link segment teams’ incentives tosegment initiative success
Making it happen
Implementing a structure to enable human capitol development to go deep as well as wide enables evolution. Reporting to the CMO assists empowerment.
CMO
Strategy&
Developers by
Market Space
Analytics and
modeling
Reporting
Technology Support
Database Marketing
Field Marketing
LOB Marketing
Media
Appendix
Tools that Support a Client Focused Approach:Decision Engine Environment
EDW
Contact History
Channels
OBIITM
Desktop
MailOTM
CDM
Householding
Affinium SuiteCampaign & Optimize
Decision Engine - DE
Business Rule
Registration Tool
Lead Distributio
n(AOM)
Models
Demand Segmentatio
nCustomer Integration
Prospect Database
Reporting and Analytic Environment supported by MicroStrategy and Consumer Extracts
Triggers
Value Segmentati
on
Market Space
Channel Optimizati
on
Direct MarketingInitiatives
ServiceGuidelines
Raw Data
Analysis Input Files
Exploratory Data
Analysis (EDA)
Application of Modeling Techniques
Final Models
SAS ETS
Regression
SAS E-Miner
Tools that Support a Client Focused Approach:Marketing Performance Optimization
Data
Engine SPT
Scenario Planning Tool:An interactive, web-based software interface that allows marketers to propose different “what if” scenarios and projects the related results in terms of balances, EPA, and accounts.
A system of models using complexmathematical & statistical relationships.Primarily employs Neural Networks, TimeSeries modeling and Regression techniques.A set of self-training models which continuouslyimprove with time.
ClusterAnalysis
NeuralNets
CHAID
Time SeriesARIMA