ATMs + One-to-One = Profit Center

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ATMs have always been considered a cost center for banks. Although they provide significant service to the customer, they have not been a revenue generating channel for financial institutions. The tide is now turning.


Today, banks are faced with the challenge of reaching their customers who are less likely to enter a bank to make a transaction and typically do not pay attention to direct mail campaigns or telemarketing calls. Most customers use the ATM as their primary source of interaction with their bank. The Tower Group, Needham, MA, predicts $14 billion in U.S. transactions by the 2003. So, how can banks use this resource as a sales channel and turn their ATMs into profit centers. The answer: The marketing-enabled ATM.


Leveraging existing technology. From a technical perspective, ATM technology has progressed from a primitive firmware driven mechanical device to a technically sophisticated, open, self-service platform. Advancements such as multitasking operating systems, advanced communications, video graphics and powerful microprocessors with expansive memory and disc capacity offer innovative alternatives to the traditional ATM customer experience.


The ATM is, by its very design, a closed-loop delivery channel. It has the technical components to deliver a targeted message and capture a customer response. ATMs have become one of the largest dedicated capital investments that banks have made, but unfortunately, they remain underutilized.


Building customer relationships through ATMs. Marketing-enabled ATMs provide banks with the additional channel to reach their customers, turning their current ATM investment into an effective marketing retail delivery channel.


Through database marketing, ATMs provide the ability to execute targeted acquisition, retention and cross-sell marketing programs in an interactive dialogue with both existing and foreign bank customers. Marketing-enabled ATMs can improve the overall ATM experience by personalizing individual financial transactions to the customer's normal ATM behavior.


How does this work? By using information-based marketing data, tools and practices, the marketer is continuously learning and gaining knowledge about the product or service and the key business question is which customers have the greatest propensity to buy the new product. For example, if the bank is running an Overdraft protection program, it can target those who have a tendency to bounce checks.


So how does the ATM know when and what message to deliver to the customers?


The marketer creates the message and how it is to be displayed on the screen. The campaign is then assigned an identification number and downloaded, stored and available to be staged at the ATM. The customer is given a score (i.e. their propensity to buy), which is loaded into a front-end file and mapped to the corresponding campaign identification in the marketing database. The score and the campaign identification are linked to the customer's card number used within the ATM transaction.


When the customers insert their cards and enter their personal identification number, the customer relationship management database is triggered. The ATM immediately locates the campaign to be displayed for each individual customer while the other processes take place.


Now, rather than seeing "Please Wait," the customer receives a targeted marketing message and the bank is able to enter into an interactive dialogue that is quick, easy and personal. The customer uses the ATM touch plate to respond in the same manner as a traditional ATM transaction. Their response is then transmitted to the ATM transaction file and ultimately fed into the bank's marketing database.


In addition to using the ATM for one-to-one marketing opportunities, it also can greatly enhance customer service. If the ATM automatically knows the customer's language preference or usual transaction, a marketing-enabled ATM enables the bank to better understand, tailor transactions to and more efficiently serve its customers.


Another significant source of customer service data is the monitoring database that records the ATM state of health. This data, analyzed in conjunction with the ATM transaction file, can support event-driven customer service actions. For example, one could proactively contact customers who were negatively impacted by an ATM out of cash condition. Today, banks know that the ATM had a service problem, but do not know which customers were inconvenienced.


Furthermore, for best customer service and efficiency, a bank must coordinate all of its sales channels. If a customer responds to a campaign through a different channel than it was offered, the marketing database should coordinate the activities of all the bank's sales channels to eliminate confusion.


Marketing-enabled ATMs transform self-service transaction devices into a closed-loop, information-based sales, marketing and service delivery channel. They turn impersonal one-way transactions into two-way personalized interactive marketing dialogues. In addition, they transform elf-service transaction devices into a customer contact and response capture system.


Through the use of the ATM network, a customer-centric marketing database and information-based marketing data, tools and practices, banks can turn a major cost center into a revenue generating machine.


C. Win Billingsley is vice president of Naviant Technology Solutions, Newton Square, PA.
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