Customer segmentation boosts credit card activations 40 percent

China’s credit banking industry entered a period of rapid growth in 2002 as banks established credit card businesses one on top of the other. Since then, they’ve used large-scale marketing campaigns to grow the number of card holders in the world’s most-populated country.

The banks that surfaced as leaders during the past decade have since shifted their focus from expansion to growing their customer relationships. That’s especially true at China CITIC Bank, where the focus is now on engaging customers to become active cardholders.

China CITIC Bank looked to SAS and its banking industry expertise for help managing marketing campaigns. Using SAS® Customer Analytics for Banking, China CITIC Bank increased its credit card activation rate by 40 percent – double its goal of 20 percent – in a matter of months. And the bank reduced marketing expenses by 7 percent.

“Big data analytics lets us easily understand all of the data, including macrodata and microdata, social media data, and internal data,” says Yuping Liang, General Manager of the card center’s risk department. “It transforms large amounts of data into precious insights that maximize our gains.”

Big data analytics lets us easily understand all of the data, including macrodata and microdata, social media data, and internal data. It transforms large amounts of data into precious insights that maximize our gains.

Yuping Liang
General Manager, Risk Management Department

Business issues

To achieve its objectives, China CITIC Bank needed to find out how best to:

  • Collect and classify basic data about inactive users from past marketing campaigns and build data marts from that summarized data.
  • Design a simple and efficient inactive-business performance report in order to identify any breaches.
  • Plan an effective gift program based on research into how competitors offer gifts in their marketing campaigns.
  • Increase return on investment by managing gift offers, marketing channels and potential market value of activated users.
  • Implement campaign plans effectively in the management process following the China CITIC Bank Credit Card Center’s rules of financial accounting.

Activation rates quadruple

  • SAS delivered a modeling process in two months that would typically take other vendors one or two years.
  • Activation rates increased 40 percent within three months of launching the campaigns – far exceeding China CITIC Bank’s goal of 20 percent and nearly four times the previous activation rate.
  • Budget optimization reduced marketing expenses by 7 percent.
  • The China CITIC Bank team learned how to use SAS to analyze big data and plan effective marketing campaigns in the future.
  • The bank can apply similar approaches to initiatives in other departments.
  • IT gains a complete closed-loop, total-access marketing system – target customers are classified, gifts are matched with channels, campaigns can be monitored, and key steps like design, implementation and optimization have been put into practice.

Challenge

Manage customer relationships more effectively in order to grow the number of active card users.

Solution

SAS® Enterprise Miner™

Benefits

  • Activation rates increased 40% in just three months – far exceeding the goal of 20% and nearly four times the previous rate.
  • Marketing expenses fell 7%.
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

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