Allfirst Bank Retains 100 Percent of its Most Profitable Customers

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Allfirst Bank, Baltimore, said that it has retained 100 percent of its most profitable customers during 1999 because of several database marketing programs it implemented last year.

One was a new customer program that uses a stream of communications throughout a new retail customer's relationship -- from the first customer interaction to every interaction throughout the first year of the relationship.

"This communication focuses on strengthening the relationship bond to minimize the churning of new customer relationships," said Allfirst vice president Jim Carter.

The banking subsidiary of Allfirst Financial, which has over $18 billion in assets, chose Harte-Hanks Data Technologies, Billerica, MA, to develop its retail customer database -- which served as the foundation for the new customer program.

The marketing database includes names, addresses and demographic data such as age, income and home ownership, as well as transaction information, product information, balances and information like the number of checks someone writes on an account each month, number of deposits and the number of ATM transactions.

Harte-Hanks Analytics, a division of Harte-Hanks worked on the database and scored customers creating a multidimensional "cube" segmentation scheme. From this segmentation, 27 unique cells were identified with different actions to take for each. This segmentation allowed Allfirst to simultaneously measure each customer's profitability, profit opportunity and retention; derive a three-code score for each household; and then manage each customer relationship based on its individual need. This scheme contributed to Allfirst's high-retention rate.

Allfirst also contracted with database marketing consulting firm The Marketing Mix to create a customer relationship valuation module that measures relative profitability of households. The module has allowed Allfirst to "understand its customers' better, understand their behaviors, and predict the next move a customer is going to make," said Jodi Voss, senior client development manager at Harte-Hanks Data Technologies.

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