Reengineered Statements Help Sell Multiple Account Strategy
Reengineered Statements Help Sell Multiple Account Strategy
REENGINEERED CUSTOMER STATEMENTS HELP PROVIDENT BANK SELL MULTIPLE-ACCOUNT STRATEGY
Provident Bank understands the changes that have made wooing and keeping customers a challenge in the '90s. Based in Cincinnati, Ohio, one of the country's most competitive banking regions, it vies for customers along with five other major banks. With $6.5 billion in assets, Provident is the country's 65th largest bank -- but it ranks third among the nation's banks in efficiency ratio (percentage of income consumed by operating expenses). Among Provident's innovative new banking products is MeritValu, the nation's first online, real-time multiple-merchant frequent shopper rewards program.
Faced with increasing competitive pressures, Provident sought to attract customers through a multiple-account, "bundled pricing" strategy, by which customers benefit financially by having more than one account at the bank. However, the hodgepodge of monthly and quarterly account statements that were being mailed to customers were anything but supportive of this effort, as Provident Senior Vice President Roland Koch explains: "When I took all the documents we sent to customers and looked at them side by side, I got a really sick feeling. I don't think more than two of them looked alike."
This mixed bag of customer mailings was hurting the bank in several ways. Multiple mailings to a given customer each month represented a waste of postage. The preprinted forms typically used were expensive and subject to rapid obsolescence. And perhaps most importantly, these forms were frequently hard to read and confusing to the customer.
"Provident Bank makes 7 million customer contacts every year through the mail," Koch points out. "When we thought about this, we realized that documents touch everything we do at the bank and every customer we have."
What was needed, Koch decided, was first, a thorough reengineering and redesign of every document that went to the bank's customers, to make these documents both reader-friendly and consistent with one another. And secondly, a consolidated statement that would show, in a single document, the status of every account a given customer had with the bank.
To find an integrated solution that would meet these goals, Koch turned to Xerox and Birmingham, Alabama-based Strategic Solutions, a firm specializing in redesigning documents to improve productivity. The solution included document reengineering and redesign, Xerox 4890 Highlight Color Laser Printers, and Custom Statement Formatter (CSF) software from M&I Data Services.
With major input from both Xerox and Strategic Solutions, the document reengineering and redesign effort included many collaborative sessions with Provident managers and customers to determine how these mission-critical documents could be made most useful. "When document design is done at the front end of a process reengineering effort, as it was at Provident, it helps define the entire process and the technology needed to make that process work," says Strategic Solutions President George Williams. "There's tremendous value in getting deep into this form of document design as a business productivity strategy."
Provident Bank's production of its consolidated statement of accounts and other customer documents is now in full operation. Two Xerox 4890 Highlight Color Laser Printers, which produce two-color documents at 90 pages per minute, allow highlighting of vital areas in a document by printing them in either red, blue, or green. In addition, a Xerox 4635MX laser printer provides MICR capabilities for check printing.
Provident Bank went into full production with its new, combined statements in September 1993. "We get rave reviews from customers," Koch says, noting that 49 percent of the bank's customers now have two or more accounts that are consolidated on the combined statements.
"We did a cost comparison of the old, preprinted forms vs. the new laser-printed ones, and we've computed that we're saving about $100,000 a year on the cost of the forms alone," Koch adds. "This results from being able to use plain, cut-sheet paper with the 4890 rather than using continuous forms or specialty forms."
David Rebold, who acted as coordinator between all the bank's areas affected by the reengineering, points out that Provident's user departments are especially pleased with the flexibility the new documents allow. "With the help of the CSF software, our user departments have the benefit of dynamically changing their documents, allowing them to be tailored based on specific account criteria," Rebold says.
In April 1994, Provident Bank added its nontraditional banking products -- including proprietary mutual funds, commercial paper, and accounts in the bank's discount broker subsidiary -- to the consolidated statement. "Now we can give customers a comprehensive view of every relationship they have with the bank," Koch says. "Adding these new products is especially important from a marketing point of view, because our primary competition for the customer's dollar is the mutual funds and brokerage companies. And now, for the first time, our statement is competitive with the way they present their information."
Koch notes that the bank has 139 different kinds of documents that are sent to customers. "Today, we've successfully reengineered about 45 percent of the styles and 70 percent of the total volume of documents. We're looking forward to making that 100 percent."
Koch views the cost of the document reengineering project in terms of its overall effect on the bank. He calculates that the additional expense, as a percentage of the bank's annual $2.3 million postage budget, is 2.3 percent. "While we try to economize, we also have to consider the impact of what we're doing." he says. "The software and hardware were not that expensive -- and all these mailings end up being marketing pieces. Since we're making 7 million customer contacts a year, our opinion is that this is the cheapest marketing the bank can do."
Roland Koch: Selling Relationship Banking
When Roland Koch joined Provident Bank 10 years ago, the bank was searching for more effective ways to sell its services and meet increasing competition from such institutions as mutual fund companies and brokerage houses. The dilemma was how to get bankers to sell, says Koch, noting that if you want to find sales people, you don't typically go looking at banks.
"We found that the way we could get bankers to sell was to have a bundled-relationship pricing strategy which made it a good deal for customers to use more of our services," says Koch, who brings to his job a background in marketing and sales. "And it became apparent to us that if we were going to get people to sell products on a relationship basis, we had to report the relationships -- which led us to our Consolidated Statement strategy."
Koch points out that the bank mails 7 million pieces of mail a year to its customers. "For many customers, the mail is the only relationship they have with the bank. And if you're going to mail 7 million pieces, you should make them attractive and effective -- and you should make every document mailed a marketing piece for the bank."
Delving into Provident's documents has been a surprising and satisfying journey, according to Koch. "It started out with a single desire to sell our products and services better, and it has ended up in a collaborative process with vendors, reengineering not only the look and feel of documents but the entire process by which we produce and mail them," he says. "Overall, it has been very consistent with our corporate philosophy: Do it right the first time, every time."
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