Scotiabank Takes CRM to the Next Level with SAS®

SAS® Marketing Optimization Boosts Expected Campaign ROI by Over 50 Percent

Scotiabank has set out to be the best and most successful Canadian based international financial services group. Since welcoming its first customers in 1832, Scotiabank has enjoyed continued success by building on its traditional core strengths, including risk management, cost control, diversification and customer satisfaction. Today, Scotiabank turns to SAS to fortify those strengths with advanced solutions for customer relationship management (CRM) and database marketing.

Scotiabank has worked with SAS to combine SAS predictive modeling with SAS Marketing Optimization to create the best multi-channel offer selection and targeting solution in the industry.

"The solution helps us make better decisions," says Andrew Storey, director of decision support, Retail Marketing, at Scotiabank. "And as our decisions improve there is a positive effect on our ROI, which increases the profitability of our campaigns."

Customer Assignment for Multiple Campaigns
Like most financial service companies, Scotiabank regularly mounts multi-channel campaigns that offer new products and services to existing and potential customers. In fact, Storey says his group has used SAS successfully for years to build response and profitability models that help the bank select the best recipients for each campaign.

But Storey hoped to move beyond the standard solutions for database marketing. While existing methods accurately determine which customers will respond to a specific offer, Storey wanted to look at multiple campaigns simultaneously and predict, for any given mix of campaigns, which products should be marketed to each individual customer.

Let's say, for example, that Scotiabank has five unique marketing campaigns planned for the month of July: two distinct offers for low-interest credit cards, one promotion for new online services, one flyer for stock-indexed GICs (Guaranteed Investment Certificates), and one general introduction to the bank's investment products and services.

The marketing department has determined that no single customer should receive more than one of the above offers and that at least 50,000 customers should receive the GIC flyer. Other business constraints include strict budgets for each campaign, channel throughput limitations, and executive expectations for results.

With their new SAS solution, Scotiabank's marketing analysts can evaluate all five campaigns at once and determine the optimal assignment of offers to customers for each campaign. SAS Marketing Optimization uses the bank's existing predictive and profitability models for inputs in addition to the many business rules mentioned above. The output shows which customers should receive which offers and also displays the expected incremental profits for each customer.

Guaranteed Return on Investment
Bringing together modeling and optimization capabilities, SAS Marketing Optimization enhances Scotiabank's existing processes and builds upon the response models already in use. And the documented results are remarkable.

Using SAS Marketing Optimization in a recent multi-offer campaign, Scotiabank improved its expected campaign ROI by more than 50 percent, compared to the expected results that would have been generated if more traditional offer selection techniques were employed.

Storey says the combined solution makes better use of the bank's response models and helps Scotiabank realize the most efficient use of channel resources and marketing dollars. "Accurate response models and SAS Marketing Optimization allow you to maximize your campaigns' effectiveness and improve your results," says Storey.

Scotiabank has used the SAS solution to analyze over 70 offers all at once for a variety of products - including GICs, credit cards and various bundles – for more than 3 million customers. In addition to the increased ROI on each campaign, the SAS solution also provides budgetary feedback and constraint analysis.

"We are able to do sensitivity analysis on our constraints," explains Storey. "Which means, I can return to the marketing department and tell them exactly how much payback we could receive due to incremental expenditures on the campaign."

Ultimately, Storey says SAS Marketing Optimization offers marketing executives more effective control over their campaigns. "This is the next step forward in the evolution of database marketing. If you have more than one product to offer and you already have a big investment in building response models, then this solution is a natural fit. Everyone who has a large customer base, many product lines and uses predictive modeling is going to move to this in the future."

^{* Scotiabank is a registered Canadian trademark of The Bank of Nova Scotia}

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